Best Rewards Credit Cards of 2018
- July 2, 2018
- Posted by: Melissa Horton
- Category: Credit Cards
Companies that provide credit cards constantly seek out new ways to distinguish their products in order to create maximum appeal to their customer base, often advertising low annual fees and interest rates in order to attract consumers. The end result is a competitively driven market for the best credit cards.
In addition to advertising low rates and fees, another popular way to gain an edge against competitors is offering credit card rewards. A rewards package is a great way to entice customers into obtaining a certain credit card. The best rewards credit card can include travel discounts, hotel perks, and more.
There is usually an introductory bonus that can be obtained after spending a predetermined amount within a certain time period, such as getting 30,000 points for spending $1,000 within three months of getting the credit card.
It can be hard to distinguish between different rewards credit card packages, which makes it even harder to choose a credit card. Luckily, below is a list that shows the best rewards credit cards, plus a look at the fees and interest rates associated with each card.
*All APRs listed below are current as of the date of this posting and are subject to change at any time depending on the card issuer and market fluctuation.
The 8 Best Rewards Credit Cards
Bank of America Travel Rewards Credit Card
APR: 16.49% - 24.49%
Rewards: 1.5 points/$1 for general purchases, 3 points/$1 on travel-related purchases, 10% rewards bonus for having savings or checking account with Bank of America
Rewards Bonus: $200/20,000 points if $1,000 spent in the first 3 months
Fees: No annual fee, up to $38 late fee, $10 or 3% on balance transfers and cash advance
This credit card focuses on rewards for travel. Its rewards package offers special benefits that are redeemable for discounts, such as free airfare or hotel stays. This card requires excellent credit history in order to be approved.
Starting with the introductory bonus, this Bank of America Travel Rewards Card offers 20,000 rewards points if a new cardholder spends at least $1,000 within three months of opening the account. This bonus deal amounts to $200 towards travel, which is a 20% return on initial purchases.
There are several rewards rates to consider when using the Bank of America Travel Rewards Card. First, the standard rate is 1.5 points awarded for every dollar spent on general purchases. Second, the standard rate is doubled to 3 points per dollar when cardholders make travel-related purchases. There is a third rate available to cardholders who have a checking or savings account with Bank of America. These cardholders can get a 10% rewards points bonus on purchases, so a purchase that gets 10 rewards points also gets 1 extra bonus point.
The rates and fees of a card are equally important as the benefits and rewards. The Bank of America Travel Rewards Card does not have an annual fee. This is one of the best perks to look for when comparing rewards credit cards.
In addition to a nonexistent annual fee, there are several other transaction fees to consider. When wiring money through a non-financial institution, a fee of either $10 or 5% is applicable. Balance transfer and cash advance transactions warrant a $10 or 3% fee. There is no foreign transaction fee with this card.
Like most rewards credit cards, this one comes with a couple of penalty fees. If there is a late payment, a fee of up to $38 is applicable. When a payment is returned, up to $27 can be charged to the account.
When talking about rewards credit cards, the interest rate is an unavoidable topic. After opening an account, cardholders can enjoy a 0% introductory purchase annual percentage rate (APR) for twelve months. Afterwards, this rate bumps up to a range of 16.49% to 24.49% APR. This range is also applicable to balance transfer transactions. Cash advance transactions are subject to APRs ranging from 19.49% to 26.49%. Finally, a penalty APR of 29.99% is applicable after late payments. All of these rates are variable and depend on the market.
Chase Freedom Card
APR: 16.49% - 25.24%
Rewards: 5% on first $1,500 in niche categories, 1% elsewhere
Rewards Bonus: $150 back if $500 spent in first 3 months, $25 for first purchase
Fees: No annual fee, $15 to $37 late fee, $5 or 5% balance transfer, $10 or 5% cash advance
The Freedom Credit Card offered by Chase Bank allows you to earn cash back on your spending. Basically, it has multiple rewards packages for niche purchases that can be redeemed towards gifts and cash back. This is a card that requires excellent or good credit history in order to be approved.
There are two introductory bonuses that total 17,500 rewards points for spending with the Chase Freedom® Credit Card. The first involves a 15,000-point offer for spending only $500 within the first three months of opening an account. This reward is worth $150.
In addition, there is another immediate introductory bonus deal for making just one purchase (so long as it occurs during the first three months). The bonus amounts to 2,500, points, which is worth $25. These rewards total $175 in introductory bonus deals.
Rewards credit cards usually have multiple rates of return on different niche purchases. The standard cash back rate is 1%, so general purchases put one cent back into a Chase Freedom account for every dollar spent.
There is another rate of 5% awarded for purchases that fall into a niche category. These niche categories are updated quarterly. For example, cardholders can get 5% back on groceries during one quarter and then on gas the next quarter. This bonus needs to be activated at the start of the quarter.
The Chase Freedom® Credit Card has no annual fee; however, there are still other transaction fees to be aware of. A balance transfer transaction is subject to a $5 or 5% fee, and cash advances receive a $10 or 5% fee. When in a foreign country, a 3% transaction fee is applied to every purchase.
There are penalty fees for this card as well. Several late payment fees are possible. For balances of $100 or less, a fee of $15 may be assessed. The late payment fee increases to $27 for balances that fall between $100 and $250, and the max fee is $37 for balances that exceed $250. Returned payment fees can run up to $37.
For the first 15 months after opening an account, there is a 0% introductory APR, but this rate is increased to somewhere between 16.49% and 25.24% APR after the introductory period. The balance transfer APR falls between 16.49% and 25.24% as well. For cash advances, the APR is 26.49%. All of these rates are variable, so they depend on market fluctuations.
Barclays Arrival Premier World Elite Mastercard
APR: 17.49% - 24.49%
Rewards: Unlimited 2 miles/dollar spent
Rewards Bonus: Up to 25,000 loyalty bonus miles each year
Fees: $150 annual fee, $37 late, $5 or 3% on balance transfers, $10 or 5% cash advances
This is one of the premier credit cards offered by Barclays. It requires excellent credit in order to be approved. The Arrival Premier World Elite Mastercard rewards package centers on travel benefits.
The reward system involves earning "bonus miles" that are redeemable towards discounts. You can earn up to 25,000 loyalty bonus miles each year: 15,000 miles for spending $15,000 and 10,000 miles for an additional $10,000 spent.
Cardholders can earn bonus miles on everyday and niche buys. On all purchases, 2 miles are awarded for every dollar spent. These miles do not expire and can be redeemed so long as the account is open.
Moving away from the benefits, there are several fees and interest rates to note. The Arrival Premier World Elite Mastercard has a $150 annual fee for membership. Balance transfers see a fee of $5 or 3%, cash advances see a fee of $10 or 5%, and there is no foreign transaction fee. Up to $37 will be charged as a late payment fee and for a returned payment.
The annual percentage rate on general purchases ranges between 17.49%, to 24.49%. Cash advances come with a 26.74% APR. All of these APRs are variable and dependent on the market.
VentureOne® From Capital One
APR: 13.49% - 23.49%
Rewards: 1.25% or 1.25 miles/$1 spent redeemable for travel expenses
Rewards Bonus: $200/20,000 miles back for travel expenses if $1,000 spent during first 3 months
Fees: No annual fee, $10 or 3% cash advance fee, up to $38 late fee
Capital One's rewards credit card, VentureOne, is offered to applicants who have very good credit, so it might be harder to get. Like other rewards credit cards, it offers benefits that are specifically tailored to reducing expenses when traveling.
The introductory bonus deal is typical for rewards cards. When cardholders spend $1,000 during the first three months with a VentureOne® card, they receive 20,000 bonus miles. This bonus is redeemable for $200 towards rewards. This amounts to a 20% rate of return on purchases during this introductory period, which is considerably greater than the standard rate.
On top of the bonus deal, everyday purchases receive a 1.25% return on the transaction amount. That is 1.25 miles per dollar spent, which is redeemable toward travel expenses. These points do not expire provided that the account does not close.
As part of its competitive nature, the VentureOne® Credit Card is not accompanied by a bothersome annual fee. There is a transaction fee for cash advances of $10 or 3%. If there is a late payment, a maximum late fee of $38 is possible.
An introductory annual percentage rate is in effect for regular purchases: either 13.49%, 19.49% or 23.49%. The same APRs are applicable for balance transfer transactions. For cash advance transactions, there is an APR of 24.49%. All of these rates are variable depending on market fluctuation.
U.S. Bank FlexPerks® Travel Rewards Visa Signature® Card
APR: 15.74% - 25.74%
Rewards: 1 point or $0.01 per $1 spent on general; 2 points or $0.02 per $1 spent on groceries and charitable donations
Rewards Bonus: 25,000 points/$375 if $2,000 spent in first 4 months
Fees: $49 annual ($0 first year), 3% or $5 balance transfer, 4% or $10 or cash advances, $37 late
This rewards credit card is provided by U.S. Bank and offers rewards for traveling. It provides competitive benefits compared to some of the other rewards credit cards on this list, and only applicants with good credit scores are considered for membership. Those who do not qualify for this card can qualify for the FlexPerks® Select Rewards Visa® Card, which has fewer rewards, but this section focuses on the FlexPerks® Travel Rewards Visa Signature® Card.
25,000 bonus FlexPoints (worth $375) are awarded for making $2,000 in purchases within the first four months of getting the card. These points are redeemable for travel or other types of financial gifts as part of the FlexPerks® program.
The FlexPerks® program includes a few FlexPoint rates on purchases. The standard rate is one FlexPoint for every dollar spent on general purchases. Two FlexPoints are earned when making purchases at a grocery store or when donating to charity.
After an introductory annual fee of $0, the annual fee jumps to $49 for every year of holding the FlexPerks card.
Balance transfers are either 3% or $5, and cash advance fees are either 4% or $10. There is no foreign transaction fee associated with this card. There are several penalty fees for making a late or returned payment. Late payments receive a fee of $38, and returned payments garner a $35 fee.
The annual percentage rate range for balance transfers and regular purchases is set between 15.74% – 25.74%. The cash advance APR is set at 25.74%. These are variable and dependent on the fluctuation of the market
Chase Freedom Unlimited
APR: 16.49% - 25.24%
Rewards: 1.5% cash back per $1 spent
Rewards Bonus: $150 if $500 spent in first 3 months, $25 for making first purchase
Fees: No annual fee, $5 or 5% on balance transfers, $10 or 5% on cash advances, $37 max late
This is the counterpart to the Chase Freedom Credit Card mentioned earlier. The Chase Freedom Unlimited Credit Card offers similar but downscaled benefits as the Freedom Credit Card. Applicants with decent credit may be eligible to get this rewards credit card.
The introductory bonus deal is similar to the Chase Freedom deal. New cardholders can get $150 after spending $500 within the first three months of opening an account; additionally, they get an extra $25 for making their first purchase within that time period. Overall, this amounts to $175 in credit from introductory deals.
One of the key differences between the Freedom Unlimited Card and Freedom Card is the rewards rate. Instead of two different rates, there is one set rate on all purchases: 1.5% cash back on every dollar spent. These rewards are unlimited, and they do not expire.
Cardholders of the Chase Freedom Unlimited Credit Card do not have to worry about a troublesome annual fee. There are several standard fees for certain transactions, as usual. Balance transfers are charged either $5 or 5%; cash advances are charged either $10 or 5%. When a cardholder is abroad, their transactions are subject to a 3% foreign transaction fee.
There are multiple penalty fee stipulations. For late payments on balances of $100 or less, a fee of $15 may be assessed. The late payment fee increases to $27 for balances that fall between $100 and $250, and the max fee is $37 for balances that exceed $250. Returned payment fees can run up to $37.
When opening an account, an introductory APR of 0% is active for the first 15 months. Afterwards, the regular APR ranges between 16.49% and 25.24% . The same range is used for the balance transfer APR. Cash advance and overdraft APRs are 26.49%. Each of these rates is variable and dependent on the market.
NFL Extra Points Credit Card
APR: 16.49% - 26.49%
Rewards: 2 points per $1 spent on NFL-related things, 1 point per $1 for everything else
Rewards Bonus: 10,000 points or $100 for $500 spent in first 3 months
Fees: No annual fee, $5 or 3% on balance transfers, $10 or 5% on cash advance, $37 late fee
The NFL Extra Points Credit Card is presented by Barclays, and it offers some great benefits for those heavily invested in the National Football League. Applicants with decent credit can qualify for this rewards credit card.
Their introductory bonus deal involves a 10,000-point bonus for spending $500 in purchases during the first three months of opening an account. This block of points is valued at $100 and is redeemable for cash back or NFL rewards.
There are two standard reward rates with the NFL Credit Card. The first rate is applicable for NFL-related purchases, which earn the cardholder two bonus points for every dollar spent. The next rate is applicable towards general purchases that are made every day; this rate is one point per dollar spent. Overall, these rewards amount to 1% and 2% returns on eligible purchases.
The Extra Points Credit Card does not require an annual fee of any sort. Either $5 or 3% is charged for balance transfers, and $10 or 5% is charged for a cash advance. The foreign transaction fee is 3%. Late or returned payments warrant a fee that runs up to $37.
For six months following the opening of an account, there is a 0% APR on regular transactions. After the intro period is over, this rate ranges from 16.49% to 26.49%, which is also applicable to balance transfers. Cash advances warrant an APR of 26.74%. These rates are variable and dependent on market value.
Discover it® Secured Credit Card
Rewards: 2% cash back at gas stations and restaurants, 1% elsewhere
Rewards Bonus: Double cash back for first year
Fees: No annual fee, 3% balance transfer, $10 or 5% cash advances, $37 late
A secured credit card is specifically meant for applicants who have a bad credit history. Since it is targeted at such a crowd, there are no enticing benefits. The main purpose of this card is to build good credit in the hopes that this leads to better rewards credit card opportunities in the future.
Instead of the chance to earn big introductory reward benefits, the Discover it® Secured Credit Card requires a security deposit in order to be eligible. This security deposit defines the cardholder's credit limit. For example, a $300 deposit provides a $300 credit limit.
Despite the limited credit card rewards aspect, there is a cash back system on this card. Cardholders can get 1% on all purchases; additionally, they can get 2% back on purchases at restaurants and gas stations. For the first year, Discover will double whatever amount of cash back is accrued.
Luckily, there is no annual fee for the Discover it® Secured Credit Card; however, there are some harsher penalty fees with standard transaction fees. The balance transfer fee is 3% for every transaction, and the cash advance fee is either $10 or 5% per transaction. Late payments and returned payments garner a $37 charge.
The annual percentage rate for regular purchases is 24.49%. Balance transfers have a six-month introductory period where the APR is 10.99%, but this converts to an APR of 24.49% afterwards. An APR of 26.49% is applicable to cash advances. There is no penalty APR, surprisingly. Each of these rates is dependent on the market.
The Different Types of Credit Card Rewards
There are three broad categories of credit card rewards, including cash back, points, and miles. Cash back rewards credit cards are often the easiest to understand, as they are relatively straightforward. For each dollar you spend, you earn a percentage of the total amount spent as cash back rewards.
These rewards can be redeemed as a direct deposit into your bank account or to purchase a gift card or other item in the card issuer’s online store. Points reward credit cards work in a similar fashion, but instead of accruing a dollar amount, they add up to a points balance.
You may earn one point per dollar spent on this type of rewards credit card. Most points are redeemable for items or gift cards available through the card issuer’s online store.
Rewards credit cards for miles are for the travel-focused spender. Miles are earned like points, and accrued miles balances may be used to offset the cost of travel-related purchases, including hotel stays and airfare. Miles typically do not have a cash value. The number of miles earned per dollar spent varies for each card issuer.
Determining the Value of Rewards
Each credit card issuer designs its rewards program differently, particularly as it relates to the value of rewards earned. It can be a challenge to compare credit card rewards when these differences are so broad, but you can use a simple rule of thumb to calculate the worth of your rewards.
Consider how many points are required to make a $10 purchase. For most rewards credit cards, that number is 1,000 points, or to put it simply, each $1 you spend generates 100 rewards points.
The higher the number of points or miles it takes to get this calculation, the less your rewards are worth. For instance, if it requires 1250 points to receive rewards worth $10, you are earning less per dollar spent on your rewards credit card. The opposite is also true; if it only takes 750 rewards points to achieve the same $10 benefit, your rewards are worth more.
Can You Get One of the Best Rewards Credit Cards with Bad Credit?
Most consumers seek out the best rewards credit cards in an effort to get some benefit from utilizing a credit card issuer’s money for purchases. However, not everyone qualifies for the best rewards credit cards easily. Credit card issuers want to feel confident that borrowers have the means to repay any amount they spend on the card, so individuals with less-than-perfect credit may find it difficult to get approved for the card that they believe is the best rewards credit card for them.
Fortunately, there are several options for rewards credit cards if credit has been an issue in the past. Most credit cards issuers offer secured credit cards that may include rewards. These cards require a deposit, typically ranging from $100 up to $500, with a credit line of the same amount. Other credit card issuers do not require a deposit but may only offer a credit line of a few hundred dollars with reward-earning potential.
Understanding Rotating Rewards Categories
Some rewards credit cards may have rotating rewards categories. Rotating rewards mean that only certain purchases qualify for a higher rate of rewards potential, and the categories for these extra rewards change each quarter.
For example, a credit card issuer may offer 5% rewards on gas station purchases or transportation spending for the first quarter of the year, then 5% rewards on grocery store or department store purchases the next quarter.
With all rotating rewards categories offered by credit card issuers, there is a cap on how much a cardholder may earn in any given quarter or category. As an example, there may be a $1,500 limit, meaning only purchases up to that amount qualify for the extra rewards. Any amount spent over that threshold will earn the standard rewards rate.
Each credit card issuer that offers rotating rewards categories will provide details about the maximum spending amounts, purchases that qualify for the extra rewards for a specific quarter, and percentage of extra points or miles that can be earned during that period. In most cases, cardholders must sign up for the rotating categories prior to each quarter to ensure they receive the bonus rewards offered.
Can You Have Too Many Rewards Credit Cards?
Several hundred rewards credit cards are available on the market today, with more options added consistently. Because very few credit cards offer flexibility in the type of rewards earned, it is common for people to have more than one rewards credit card.
For most people, having multiple credit cards is beneficial in maximizing the rewards potential for various purchases, but it is possible to have too many credit cards on hand. If you are using multiple rewards credit cards each month, you may find it challenging to keep up with on-time payments or manage spending responsibly.
Taking out too many new rewards credit cards in a short timeframe can also negatively impact your credit, so it is necessary to consider these potential issues before taking on several rewards credit cards.
Rewards on Cash Advances
Most card issuers offer cash advances to cardholders, either up to the full extent of their available credit line or as a percentage of available credit. Cash advances can be helpful in accessing cash quickly for major expenses that cannot be paid for with a swipe.
Cash can be transferred to a checking or savings account and then withdrawn as needed through a cash advance transaction. However, cash advances come with higher interest rates than purchase transactions on credit cards, and they may include one-time fees for accessing a credit line for cash.
In addition to these downsides, credit card cash advances do not typically earn rewards. Regardless of whether the credit card is meant for cash back, points, or miles, cash advances do not count toward reward earnings because credit card issuers do not want to incentivize this feature among cardholders. Only purchases—and in very rare cases, balance transfers—earn rewards.
Rewards on Balance Transfers
Balance transfers can be a beneficial tool in credit card use for many consumers. Through a balance transfer, a cardholder may move an outstanding balance from one credit card to another for a fee, typically ranging from 1% to 5% of the amount transferred.
A balance transfer makes sense when the interest rate offered by the receiving credit card issuer is far lower than the interest charged on the current credit card balance. Most balance transfer offers come with an extended low- or no-interest period, from six to 18 months in most cases, which can be helpful to cardholders wanting to repay a balance without hefty interest charges.
While balance transfers are beneficial in reducing the total cost of borrowing for the period of low or no interest, cardholders do not receive rewards on most balance transfers. Credit card issuers make far less on balance transfers than they do on purchase transactions, and therefore, offering rewards for these transactions is not a profitable move.
Using Rewards to Pay a Bill
Credit card rewards can be redeemed for a variety of needs and wants. For cash back rewards redemption options, many cardholders opt for a statement credit in an effort to reduce the total outstanding amount due each month.
While this is a viable strategy for paying off credit card balances, there is one caveat. If the minimum payment due is less than the cash back statement credit amount, a payment is still required.
For some credit card issuers, even when the statement credit would offset the balance owed, a minimum payment is still required. Part of the reason behind this is because returning any items purchased may reduce the total amount of cash back rewards available, ultimately reducing the statement credit amount.
Be sure to check with your credit card issuer to see if statement credits can be used in lieu of a minimum monthly payment.
Authorized Users and Earning Rewards
Adding an authorized user to your rewards credit card can be a powerful method to earn even more rewards over time. Most rewards credit cards allow the primary cardholder to add an authorized user without that individual having to go through a full credit evaluation.
Most credit card issuers offering authorized user cards provide the same level of rewards potential on purchases made with the additional user’s credit card. While the authorized user may not have the same perks as the primary credit card holder, rewards potential is typically still available with any purchases made on the authorized user’s account.
Minimum Spending to Earn Rewards
Credit card issuers typically do not impose a spending minimum requirement for cardholders to earn rewards, regardless of the type of rewards offered. However, there are instances when minimum purchase amounts must be met in order to receive a bonus reward.
For example, credit card issuers often provide opportunities for new credit card holders to earn significant sign-up rewards bonuses. To earn these extra rewards, minimum spending of a certain amount must be met within a specified timeframe.
As an example, a new credit card holder may have to spend $3,000 within the first three months of opening an account to earn 10,000 rewards points. These sign-up bonuses are usually the only time spending requirements are imposed on credit card users.
It is important to note that rewards may only be redeemed when a certain amount has accrued.
Rewards and Missing a Payment
Missing a credit card payment can be a serious negative for several reasons, not the least of which is a lasting ding to your credit report. In addition to that consequence, some credit card issuers require that cardholders remain in good standing in order to continue to earn and redeem accumulated rewards. Credit card companies have varied policies on how a late payment impacts rewards, but most will quickly take away rewards points when an account is delinquent.
However, there are instances when rewards may be reinstated. Most credit card issuers require a cardholder to first pay the amount due plus any late fees. After the payment is received, you may request to reinstate any rewards that were taken away for the missed payment. There may be a fee involved in reinstating rewards, if the credit card issuer allows it at all.
Rewards and Closing an Account
Credit card rewards may be forfeited if you close an account, but only in certain circumstances. For rewards credit cards that offer miles or loyalty program points, any rewards earned on the account are generally transferred to your loyalty or frequent flyer account at the end of each statement period.
Once rewards are in that account directly with the hotel or airline program, the points you earned are safe even if you close the account in the next billing cycle. However, for cash back and some points rewards, closing an account may mean you lose any accumulated rewards at that time.
To ensure you don’t lose access to your rewards if you plan to close a credit card account, be sure to redeem the points beforehand.
What if Rewards Expire?
Most credit card issuers put an expiration date on rewards, but these policies vary significantly from one company to the next. Credit card rewards are a “use it or lose it” perk with most card issuers, although there are a few that offer rewards potential without an expiration date.
In most cases, though, rewards expire one or more years after they were earned. Should rewards expire, there is often no means to get them back into your account. You simply have to start fresh by earning rewards with new purchases from that point forward.
Gifting Credit Card Rewards
The majority of credit card users who earn rewards want to utilize those rewards through their card issuer’s online catalog. However, there are some cardholders who prefer to gift their rewards points to friends or family members for holidays, birthdays, or other life events.
Gifting credit card rewards points can be done in two ways: either by purchasing a gift card for another person through the card issuer’s site, or by actually donating the points or miles to another person.
Each credit card issuer has specific rules and limitations on gifting rewards earned, so it is necessary to review these policies before attempting to gift rewards to someone else. This strategy, however, is a great way to use rewards that are about to expire if you are not planning to cash them in.
Limits on Earning Rewards
Credit card rewards come in all shapes and sizes, and limitations on earnings are no different. In addition to the bonus rotating categories previously mentioned, some credit card issuers may impose limits on rewards earnings each billing cycle or year.
After the threshold is met, no more rewards are available. Each credit card issuer provides maximum rewards potential information in the rewards program agreement.