Credit Cards » Compare Credit Cards » The Best Rewards Credit Cards of 2021
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The Best Rewards Credit Cards of 2021

Find the right rewards credit card for you, based on your spend and needs - whather it's cash back, points or miles. Compare our best picks.

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Rewards credit cards are cards that actually pay you a predetermined percentage of the amount of every transaction you have. These cards come in two main options, either cash back or travel cards.

Trave cards give you points, or miles, for every dollar you spend. These rewards can be used to pay for flights, hotel stays, car rentals, and other travel related purchases.

Cash back cards give you a percentage of every purchase in the form of cash, hence the name cash back credit card.

These types of credit cards make up over 60 percent of all the credit card offers on the market. The cashback cards make up over 30 percent of offers and 63 percent are points or miles cards.

When you go looking for the best rewards card, you will soon find that there are a lot of options out there to choose from. This is why we have gathered together information for the best reward credit cards available.

Here are The Smart Investor Select’s picks for the top rewards credit cards:

American Express Blue Cash

On AMEX Secure Website

American Express Blue Cash Preffered

Reward details

Earn 6% cash back at U.S. supermarkets and selected U.S. streaming subscriptions, 3% cash back on transit and gas stations, 1% cash back on other purchases
1-6% cashback

Current Offer

$250
$300 statement credit

Credit Rating

Good – Excellent

Annual Fee

$95

0% Intro

12 months

APR

13.99% – 23.99%
  • Overview
  • Card Features
  • Pros & Cons

This card offers an outstanding 6% cashback rewards for streaming services, and spending’s at the supermarkets, an amazing 3% rate on transit purchases and gas, making it a suitable choice for commuters and a 2.7 % fee on foreign transactions.

However, warehouse clubs and superstores are not included. The American Blue Cash Preferred Card charges an annual fee of $91, but you can justify this if you can spend $31 a week on groceries alone. This makes the card suitable for individuals that buy or purchase their groceries at traditional supermarkets. New cardmembers can earn up to $300 statement credit after making a purchase of $3000 or more within the first six months of being a member.

  • Rewards Plan: Earn 6% cash back at U.S. supermarkets and selected U.S. streaming subscriptions, 3% cash back on transit and gas stations, 1% cash back on other purchases
  • APR: 13.99% - 23.99%
  • Annual Fee: $95
  • Balance Transfer Fee: $5 or 3%
  • Foreign Transaction Fee: 2.70%
  • Sign Up bonus: $300 back in the form of a statement credit after you spend $1,000 in purchases on your new Card in your first 3 months of Card Membership.
  • 0% APR Introductory Rate Months: 12 months
  • Sign-up cash back bonus: $250
 
  • $250 Cash Back Sign-Up Bonus
  • 6% Cash Back at Supermarkets, 3% at Gas Stations
  • 3% at Selected Department Stores, 1% on All Other Purchases
  • 0% APR on Balance Transfers and Purchases in the First 12 Months
  • Redeeming Options
  • Extended Warranty on Purchases
  • $95 Annual Fee
  • High APR
  • Short Introductory Rates
  • Balance Transfer Fee
  • Foreign Transaction Fee
  • Minimum Redemption Amounts
  • Not as Widely Accepted as Other Cards

Bank of America Travel Rewards

On Bank Of America Secure Website

Bank of America Travel Rewards

Reward details

Earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time and no expiration on points.
Earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time and no expiration on points.

Current Offer

25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days of your account opening – which can be redeemed for a $250 statement credit toward travel purchases
25,000 online bonus points

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

12 months

APR

14.99% – 22.99%
  • Overview
  • Card Features
  • Pros & Cons

This card is a must-have if you are a customer of Bank of America is a zero fees card that customers can use when they travel to earn points and gain rewards. To gain access to this card, you will need a solid credit score of between 690 to 850.

Although most cardholders feel this is a bit much, the rewards are worth it. If you spend $1000 within the first three months of acquiring the card, you gain 25,000 bonus points you can use for purchases and other travel expenses. You're also not limited when you want to make travel arrangements as the card grants you flexibility. The issuer has a J.D. Power rating of 798 for the year 2019.

  • APR: 14.99% - 22.99%
  • Annual fee: $0
  • Balance Transfer Fee: 3%
  • Foreign Transaction Fee: None
  • Rewards Plan: Earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time and no expiration on points.
  • Sign Up bonus: 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days of your account opening – which can be redeemed for a $250 statement credit toward travel purchases
  • 0% APR Introductory Rate period: 12 months
  • 25,000 Point Sign-Up Bonus
  • Rewards
  • Bonus points
  • No Annual Fee
  • No Foreign Transaction Fee
  • Preferred Rewards, No Expiration
  • Minimum Redemption
  • There are Better Rewards Cards
  • High APR and Excellent Credit
  • Limited Travel Protections
  • 0% APR Introductory Rate on Purchases in the First 12 Months

Capital One Venture Rewards

On Capital one Secure Website

Capital One Venture Rewards

Reward details

Unlimited 2X miles per dollar on every purchase
Unlimited 2X miles per dollar on every purchase

Current Offer

60,000 bonus miles once you spend $3,000 on purchases within the first 3 months from account opening
60,000 miles

Credit Rating

Good – Excellent

Annual Fee

$95

0% Intro

None

APR

17.24% – 24.49%
  • Overview
  • Card Features
  • Pros & Cons

The Capital One Venture Rewards is a low-cost travel card that worth’s its value. It allows you to earn rewards and bonus points while traveling for business, leisure, or pleasure. It requires holders to have a credit score of between 690 and 850. It attracts no annual fees, and once you spend up to a thousand dollars, you get 20,000 bonus miles to use as you please.

For the first 12 months, you get zero percent on purchases. This card's issuer has a J.D. power rating of 808, which places it Fifth among all major issuers (fifth out of 11 major issuers).

  • APR: 17.24% - 24.49%
  • Annual fee: $95
  • Balance Transfer Fee: $10 or 3%
  • Foreign Transaction Fee: None
  • Rewards Plan: Unlimited 2X miles per dollar on every purchase
  • Sign Up bonus: 60,000 bonus miles once you spend $3,000 on purchases within the first 3 months from account opening
  • 0% APR Introductory Rate period: None
  • Flexible Rewards Redemption
  • Great Sign-Up Bonus
  • No Blackout/Expiration Dates
  • No Accumulation Limit on Miles
  • High Variable APR
  • Airline Partners Limitations
  • $95 Annual Fee
  • Redeem Points for a Statement Credit

Chase Sapphire Preferred

Chase Sapphire Preferred review
On Chase Secure Website

Chase Sapphire Preferred

Reward details

2X on travel and dining at restaurants and 2X points on grocery store purchases (till April 30, 2021 and up to $1,000 in grocery store purchases per month ), 1 point per dollar spent on all other purchases
Up to 2X points for every $1 you spend

Current Offer

60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
60,000 bonus points

Credit Rating

Good – Excellent

Annual Fee

$95

0% Intro

None

APR

15.99% – 22.99%
  • Overview
  • Card Features
  • Pros & Cons

The Chase Sapphire Preferred card is a travel rewards card issued by Chase Bank. This is a very popular travel rewards card because it offers a large sign-up bonus and the card is built around traveling. Many travel rewards cards have higher annual fees for the same kind of rewards.

This card is on our top spot in regards to the best traveling and dining cards as they offer you 2X more points compared to other cards. In addition, Chase Bank offers a 25% point’s bonus, whenever you redeem the points for travel.

The card offers a sign-up bonus of 60,000 points when you spend more than $4,000 on any purchases in the first 90 days. This is equivalent to $750 in travel costs when you redeem your travel rewards.You shall also earn 2x points while traveling and dining at a variety of restaurants around the world and one point on the dollar on any other purchases.

  • Rewards Plan: 2X on travel and dining at restaurants and 2X points on grocery store purchases (till April 30, 2021 and up to $1,000 in grocery store purchases per month ), 1 point per dollar spent on all other purchases
  • APR: 15.99% – 22.99%
  • Annual fee: $95
  • Balance Transfer Fee: 5%
  • Foreign Transaction Fee: None
  • Sign Up bonus: 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
  • 0% APR Introductory Rate: None
  • 60,000 Point Sign-Up Bonus
  • Bonus Points
  • No Blackout Dates
  • 25% More through Ultimate Chase Rewards
  • No Foreign Transaction Fee
  • $95 Annual Fee
  • Low Merchandise Rewards
  • High APR
  • No Introductory 0% on APR Balance Transfer
  • 5% Balance Transfer Fee

Discover It Cash Back

Discover It Cash Back review

On Citi one Secure Website

Discover It Cash Back

Reward details

5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum + 1% cash back on all other purchases
1-5% cash back

Current Offer

2x cash back with cashback match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically
Match Bonus for the first 12 months

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

0% Intro APR for 14 months on purchases and balance transfers.

APR

11.99% – 22.99%
  • Overview
  • Card Features
  • Pros & Cons

Discover It Cash Back was awarded the 2020 U.S. News Best Credit Card for the cashback rewards card. This card offers a very high rewards rate on some categories that rotate every few months. The card gives a 5% cashback on any purchase that is up to $1,500, which is spent each quarter on the rotating bonus category. Some of the categories include; restaurant, gas station, online shopping and many more each time you activate them. However, on all other purchases, excluding the ones in the category selected, you will only receive a 1% cashback.

This card is best for individuals who want to have a high reward rate on every purchase they made and also individuals who love a more straightforward rewards program.

  • Rewards Plan: 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum + 1% cash back on all other purchases
  • APR: 11.99% – 22.99%
  • Annual fee: $0
  • Balance Transfer Fee: 5%
  • Foreign Transaction Fee: 3%
  • Sign Up bonus: 2x cash back with cashback match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically
  • 0% APR Introductory Rate period: 0% Intro APR for 14 months on purchases and balance transfers.
 
  • 14 Month 0% Intro APR Period
  • Balance Transfer Fee
  • 5% Cash Back for Select Spending Categories
  • Matches Cash Back in the First 12 Months
  • No Annual Fee
  • Less Merchant Acceptance
  • No Sign-Up Bonus or 0% APR Introductory Rate
  • Limit on Cash Back Spending Per Quarter
  • Keeping Track of Bonus Categories

Marriott Bonvoy Boundless

Marriott Bonvoy Boundless Card review 2019

On Chase Secure Website

Marriott Bonvoy Boundless

Reward details

6 points per $1 spent at participating Marriott Bonvoy hotels, 2 points per $1 spent on all other eligible purchases
Up to 6 points per $1 spent

Current Offer

75,000 bonus points after you spend $3,000 on purchases in the first 3 months from account opening
75,000 Bonus Points

Credit Rating

Good – Excellent

Annual Fee

$95

0% Intro

None

APR

15.99% – 22.99%
  • Overview
  • Card Features
  • Pros & Cons

This credit card is as the name implies. It is a bold choice for users who want to have a new lease on spending without consequences. To qualify for this card, you need a credit score of between 690 and 850.

The card attracts zero fees, and you earn 30,000 bonus points for every thousand dollars spent within the first 90 days of opening the account. There are no annual fees, and you get three points for every $1 you spend on the card. You also do not pay any transaction fees when you use the card abroad, making it an excellent travel card. 

  • Rewards Plan: 6 points per $1 spent at participating Marriott Bonvoy hotels, 2 points per $1 spent on all other eligible purchases
  • APR: 15.99% - 22.99%
  • Annual fee: $95
  • Balance Transfer Fee: $5 or 5%
  • Foreign Transaction Fee: None
  • Sign Up bonus: 75,000 bonus points after you spend $3,000 on purchases in the first 3 months from account opening
  • 0% APR Introductory Rate period: None
  • Sign-up bonus of points: 100,000
  • Sign-Up Bonus
  • Annual Reward
  • Ongoing Points Rewards
  • Transfer to Airline Points
  • Automatic Silver Status
  • 5th Night Free
  • 95$ Annual Fee
  • Chase Restrictions
  • 5th Night Free Conditions
  • High APR
  • Confusing Rewards

Sam's Club Mastercard

Sam's Club Mastercard review

On Sam's Secure Website

Sam's Club Mastercard

Reward details

5% cash back on gas. (on the first $6,000 per year, then 1% after), 3% cash back on dining & travel, 1% on all other purchases
1-5% cash back

Current Offer

Get a $55 statement credit when you open a new account and make $55 in Sam's Club purchase within 30 days
$55 statement credit

Credit Rating

Good – Excellent

Annual Fee

None ($55 yearly memebership fee)

0% Intro

None

APR

14.90% – 22.90%
  • Overview
  • Card Features
  • Pros & Cons

The Sam’s Club Mastercard is a great card for Sam’s Club shoppers. It has very competitive cashback rewards and benefits in some spending categories.

Sam’s Club Mastercard has 5% cash back on gas purchases up to $6,000 in purchases a year, and then 1% after that. It also has 3% cash back for any spending on restaurants and travel and % cash back on all other spendings with no limit. The rewards categories do not change and are great for those who spend a lot on gas and traveling and who are Sam’s Club members.

The card does not have a foreign transaction fee or annual fee as long as you are a Sam’s Club member (Membership starts at $45 a year). This card can be used anywhere Mastercard is accepted, not just at Sam’s Club.

  • APR: 14.90% - 22.90%
  • Annual fee: None ($55 yearly memebership fee)
  • Balance Transfer Fee: Unknown
  • Foreign Transaction Fee: None
  • Rewards Plan: 5% cash back on gas. (on the first $6,000 per year, then 1% after), 3% cash back on dining & travel, 1% on all other purchases
  • Sign Up bonus: Get a $55 statement credit when you open a new account and make $55 in Sam's Club purchase within 30 days
  • 0% APR Introductory Rate period: None
  • Cash Back on Gas, Restaurants and Travel & Other Spending
  • No Annual Fee
  • Sign-Up Bonus
  • No Foreign Transaction Fee
  • Earn More Rewards
  • Redemption Restrictions
  • No Sign-Up Bonus or 0% APR Introductory Rate
  • Rewards Cap
  • There are Better Cashback Cards
  • High APR

Wells Fargo Propel American Express

Wells Fargo Propel American Express Card review

On Wells Fargo Secure Website

Wells Fargo Propel American Express

Reward details

Earn 3 points per $1 spent on selected gas stations, rideshares, transit, Flights, hotels, homestays, car rentals and popular streaming services. 1 point per $1 spent on other purchases
Up to 3 points for every $1 you spend

Current Offer

20,000 bonus points when you spend $1,000 in purchases in the first 3 months
20,000 bonus points

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

15 months

APR

14.49% – 24.99%
  • Overview
  • Card Features
  • Pros & Cons

The Wells Fargo Propel card does not charge any annual fee and stands out by it offers. For example, in the popular spending category, including restaurants, travel, gas and some very popular streaming services, the Well Fargo Propel American Express gives a 3 point dollar, making it outstanding. They also offer a decent bonus for a card with no annual fee and an introductory 0% APR with a cash bonus.

For individuals who do not have any insurance on their cell phone, this card may be the best for them because it extends a $600 coverage on your cell phone, only if you pay your cell phone bill with the Well Fargo. Wells Fargo ranked 9th out of 12 companies that issue cards with a score of 783 according to the J.D. Power Credit Card Customer Satisfaction Survey in 2019.

  • Rewards Plan: Earn 3 points per $1 spent on selected gas stations, rideshares, transit, Flights, hotels, homestays, car rentals and popular streaming services. 1 point per $1 spent on other purchases
  • APR: 14.49% - 24.99%
  • Annual fee: $0
  • Balance Transfer Fee: $5 or 5%
  • Foreign Transaction Fee: None
  • Sign Up bonus: 20,000 bonus points when you spend $1,000 in purchases in the first 3 months
  • 0% APR Introductory Rate period: 0% introductory APR on purchases and balance transfers for the first 15 months
  • 20,000 Points Sign-Up Bonus
  • Higher Points on Certain Categories Including Streaming Services
  • No Foreign Transaction Fee
  • Points on All Other Categories
  • No Annual Fee
  • 0% APR on Balance Transfers and Purchases
  • Minimum Redemption Amounts
  • Longer Introductory Rates
  • Not as Widely Accepted as Others
  • Balance Transfer Fee
  • High APR
  • 0% APR on Balance Transfers and Purchases

What are Points Rewards Credit Cards?

Credit card rewards take the shape of many forms but they have one purpose: to give incentives to cardholders to push them to use the card more. Rewards would often fall into one of three categories: cash, points, or miles.

With a points rewards card, you get a certain number of points for every purchase that you make, such as 2X points per dollar amount. Now, depending on which card you are using, you can redeem the points for merchandise in the reward program’s online shopping mall. You may also choose to exchange your points for gift cards, cash, or even travel. Sometimes, you can transfer them to a partner airline or hotel loyalty program.

Which Type of Customer is the Best Fit For?

A rewards credit card is beneficial for anyone who normally charges most of their expenses through their credit card. They are the ones who can take advantage of it and accumulate points to redeem for their choice of rewards whether they be flights, cashback, items, or gift cards.

Points rewards work better for people who have more credit card experience and who are willing to exert more effort to get a good value for their points.

Leading Card Companies by Number of Cards in Circulation (Millions, USA)

Which Factors Should you Consider When Choosing a Points Rewards Card?

There are some factors you should consider when thinking about points rewards card:

  • Rewards & earn rate

A nice points rewards credit card should give out bonuses. If you use it correctly, your rewards card can help you earn money. But it depends on the card that you will get. You should apply for one that best fits your spending habits. Earn rate means the number of points you will get for every $1 that you charge to your card. The rule of thumb is the higher points per dollar, the better. However, if you get a card that gives 1 point for every dollar, that’s more than acceptable.

Your first consideration should be a points rewards card that will give you something that would make sense for you. For example, if you travel a lot, a travel rewards card may be the right thing. It can offer you bonus points for airfare purchases and hotel bookings so you can get more points for your usual purchases.

But before you apply for a credit card, decide what you want to accomplish by having a card. Is it to earn free stuff or to pay for an existing card debt thru a balance transfer facility? Consider your lifestyle – then pick a card that would complement your priorities and interests.

If you want a variety of rewards, you will find that there are a lot of good cash-back credit cards that can help you meet your goals. If you’re after consistency in your rewards for your usual purchases and only look after one card, you can’t go wrong with a cashback credit card.

  • Fees

If you plan to settle your card bill in full every month, you need not worry about the interest rate so, it’s almost immaterial. If you can continue doing this, you can improve your credit and perhaps later ask your issuer to bring your interest rate down.

Not all cards charge the same set of fees. When you see the fine prints of the Terms and Conditions of the card, don’t be intimidated – you can find the list of main fees printed prominently in their marketing materials. Some of the fees you should look out for are:

  • Annual fee

This is the fee that you pay for the convenience of having a credit card at your disposal. You’ll find that not all points rewards credit cards charge an annual fee.

  • Balance transfer fee

This is the fee that you pay if you avail of a balance transfer facility. This is a transaction that lets you transfer your outstanding balance from one card to the new card.

Issuers charge a percentage of the balance transfer. It’s commonly placed at 3% of the transaction amount or $5, whichever is higher. So, the higher the balance you want to transfer, the higher your fee would be.

  • Cash advance fee

The issuer will collect a cash advance fee when you avail of a cash advance or a similar transaction. Take note that overdraft protection and credit card convenience checks will also qualify as a cash advance transaction.

  • Foreign transaction fee

When you use your card to make a purchase in any foreign currency, your issuer might charge you a foreign transaction fee. Your issuer might compel you to pay this fee regardless of your physical location when you made the transaction as long as the currency is other than U.S. dollars.

When choosing a credit card, one of the things you need to consider is the free structure. In this chart compiled with creditcards.com data, we can see that late payment fees are the most common type of fee. This is followed by cash advance fees. At the other end of the scale, we can now see that over limit fees and annual fees are far less common. This highlights the importance of making payments on time, which can not only save on fees but help you to establish a solid credit history.

The Most Common Credit Card Fees

  • APR

APR stands for the annual percentage rate of the interest rate that you’ll pay every year as represented by the formula monthly rate X 12. But there’s more to it than meets the eye. You’ll encounter things like introductory rates, variable rates that change depending on the balance that you retain on your card, and layers of rates that apply in different ways as you use your card. A good rule to follow when shopping for a credit card is to find one with the lowest APR because it could give you the lowest interest to pay.

But remember that comparing interest rates isn’t a simple matter. Many issuers offer different rates based on your credit score. So, unless you have stellar credit, it would be better to go for a card that offers a single, fixed rate.

Credit Limit

An ideal card should provide you with an adequate credit limit to purchase your normal requirements with convenience but not so much credit that you might bury yourself in debt. If you're a college student who is just learning to use a credit card, a low-limit card is a safe option for you.

But once you graduate, you may need to ask for a higher credit limit to keep up with your rising monthly expenses. And having a higher limit might be helpful to your credit over time as long as you don't max out your card. It will work well for your credit score if you have a higher limit but spend way below your total limit.

You're the best person who can judge yourself. If you know that you have not been very responsible in the use of your credit in the past, it's better not to take on more credit because it may just lead you to debt problems.

Credit card limits are influenced by credit scores and other factors. Whether you have an excellent credit score or poor score, there is a trend for higher and higher average credit card limits.

This chart created with Experian data from 2020, highlights the significant increase in the average credit card limits in the last decade. Credit card limits have consistently increased with an overall increase of approximately 15% since 2012.

Average Credit Card Limits in he US

Benefits

Rewards diversification. Perhaps this is the most noteworthy benefit of points rewards cards. It gives you the flexibility to use your rewards for a number of things. For example, you can use the cash rewards to bring down your outstanding balance.

Or get travel rewards to treat your family to a free vacation. You can use your points to buy gifts for your loved ones for their birthdays or during holidays. If you want, you can invest the rewards that you accumulate.

Bonus point offers. Points rewards cards sometimes attract new cardholders by offering sign-up deals that give thousands of bonus points. Although the catch is for you to spend a set amount within a defined period, it's a good way to build a cluster of points to start your rewards journey. But be mindful of your spending so that you don't go over your budget just to get the bonus points.

Additional perks. Point rewards credit cards often give you additional benefits that add value to the account. You can choo Not all rewards credit cards are the same. It's not a matter of looking for the right card for you but rather, looking for the best card for your situation. It should be one that would give you the highest reward value compared to other options.

Once you have all this information on hand, you can make an intelligent decision on which point rewards credit card to get.se from features like Price match guarantees, Purchase protection insurance, Complimentary travel insurance, or free access to airport lounges.

Drawbacks

Complexity and restrictions. Points rewards programs are often a little complicated. For example, at first glance, a card may offer to reward you 7%. But there might be a small print that tells you to first spend $5,000 on your card for the year in order to qualify.

You can also find there are restriction caps or minimum redemption amounts that make it difficult to redeem rewards. Issuers sometimes change their reward program terms without warning so make sure that you read every marketing material that comes with your monthly billing statement.

Interest rates. Reward cards usually have higher interest rates than other credit cards. This means that it's best that you don't carry a balance on the card to avoid interest charges.

Points expiration. Take note that you might lose your points by expiration if you don't use them within a certain amount of time. The best reward programs keep your points always fresh but most cards will forfeit your points if you fall behind on your credit card payments.

Annual fees. Almost all of the points rewards cards charge an annual fee. This doesn't really matter if you spend so much on the card each year that you can offset the fee. When evaluating the annual fee, take into consideration any benefit that translates into a dollar value that can pay for the annual fee such as an annual credit or a higher points rewards conversion.

For many consumers a lack of annual fee is an attractive feature of any credit card. Lenders have recognized this trend and today the majority of cards do not have an annual fee. However, savvy consumers want more from their credit card. In this chart created with US news data, you can see the percentage of no annual fee cards by card type.

The most obvious category is student cards, with 100% of cards not attracting an annual fee. This stands to reason as lenders typically want to attract students who will need to develop financial relationships that could last a lifetime. However, over 75% of balance transfer, cash back and low APR cards also don’t have an annual fee.

At the other end of the scale, you can see that travel cards that typically offer some excellent benefits are more likely to have an annual fee. Secured cards, which are usually offered for consumers with a low credit score or no credit history are also more likely to have an annual fee.

percentage of credit Cards with no Annual Fee by Card Type

How Do You Redeem Your Points?

If you are thinking of how you can get a discount on your next purchase or how to save some money during the holidays, the solution may be in your rewards card. Some credit cards add a perk for their cardholders allowing them to shop online at select retailers and use their points to pay for their purchases in full or in part. Or, you can go by way of Gift Cards.

It is a popular way to redeem your credit card rewards because they are convenient and it's easy to determine the point-to-dollar value. Another popular use is to use your points to redeem airline tickets. And whether your points are about to expire or you're switching credit cards, think about donating your points to a charitable cause rather than spending them on things you don't need.

Points Rewards Card Requirements

The bad news is, most point rewards credit cards require applicants to have good or excellent credit. And the best reward credit card programs are often exclusive to consumers with the best credit scores.

If you don't fall into these categories, you may not qualify for any reward credit cards. Some issuers reserve their best point rewards credit cards to those with “prime” credit score of at least 630 points. And of course, you shouldn't apply for any credit card if your credit score is very bad and you won't be able to pay your bills on time.

How to maximize your points rewards

There are a couple of ways to maximize your rewards:

1. Get the right points rewards credit card for you. It's easy to be caught up in the frenzy of earning rewards left and right. But the more cards you use, the less likely you'll be able to build up points in any of them. Concentrate your spending on the card that gives you the best value in categories where you spend the most. This is better than farming out your purchases to several cards which prevents you from accumulating enough rewards on one card to make it worth your while.

2. Look for sign-up bonuses. You can find cards that give bonus miles when you spend a certain amount within the first few months of opening a new account. These bonuses are great when it comes to jump-starting your point rewards earning.

3. Consolidate and trade points. If it happened that your reward points have been scattered across several cards, consolidating them will be a wise choice. There are services to help you manage your points and rewards and they often offer a place for you to trade, transfer, and purchase points between your programs.

4. Track how you earn points. Maximizing your points rewards credit card and earning as many miles as possible means taking advantage of each bonus opportunity that comes your way. For some cards, that may mean keeping track of your spending and using your card for every purchase that can earn you a rewards bonus.

5. Estimate your rewards cash value. If your card gives you points, you should calculate the dollar value of each point so you can compute for the best possible return. The formula to follow is to divide the cash reward you are trading in by the number of points it takes to trade in for it.

Points Rewards Card Mistakes You Should Avoid

Here are some of the main mistakes you should be aware of, especially if you want to avoid to spend more than you planned:

Spend more to get additional rewards. Card companies are experts when it comes to selling their points program and making you spend more using your card to get more points. And they put expiry dates on your points to move you into trying to build up more points by spending more.

Lesser options of rewards partners. Card issuers partner with retailers and other businesses to provide wider choices for your rewards. You can also earn bonus points when you buy from partner stores.

Spending your points solely for merchandise. Most rewards cards will let you redeem your reward points in exchange for merchandise. You can get housewares or home electronic appliances for your points. However, when you make some computations, you'll be able to see that the redemption values for these types of rewards purchases are disproportionate. In fact, they often pale when you compare them with travel rewards which have a higher value option.

Paying interest on credit card debt. A credit card debt is probably the most common debt that the average person has. And this is on top of other debts that he might have. Point rewards can push you to spend more, and this is exactly what card companies want. They will make a lot of money off the interest that you will pay when you accumulate card debt. But take note that points rewards credit cards have higher interest rates compared to your average card. The longer time it takes you to pay off your card debt, the more interest you will build up offer time.

For many people credit cards provide a convenient way to make purchases, but for others their card is necessary to make ends meet. This can mean carrying credit card debt. There is over $800 billion in credit card debt in the US.

In this chart using data from Urban Institute, you can see that the age group 43 to 47 carries the highest average credit card debt. This age group has almost double the credit card debt of their under 32 year old counterparts or seniors aged 68+.

Average Credit Card Debt by Age

Maxing out your credit card limits. If you max out your credit card limit, you're exposing yourself to many financial risks. The more you charge, the more it becomes difficult to pay off the entire balance. If you exhaust your card limit, you won't have enough stand-by means in case you have an emergency.

Another thing is, maxing out your card increases your credit utilization ratio. Your credit utilization ratio shows the speed by which you amass credit card debt. A high ratio is detrimental to your credit score. Lenders do not like a borrower's ratio to be above 30%. So, if you max out your card, chances are, you will go over the 30% threshold.

Bottom Line

Not all rewards credit cards are the same. It's not a matter of looking for the right card for you but rather, looking for the best card for your situation. It should be one that would give you the highest reward value compared to other options. Once you have all this information on hand, you can make an intelligent decision on which point rewards credit card to get.

Credit Card Reviews Methodology

In order to determine the best possible credit cards, we look at things like fees, interest rates and rewards. We do this with companies that are associated with us as partners as well as other offerings. From there, we make a decision about what the best card is related to different categories and needs. We focus on interest rate cost & fees, especially the cost of carrying a balance, rewards – cards accumulate rewards in different currencies—points, miles, cash back—and their values vary widely usability – cards that accept a wide range of credit profiles and offer simple solutions for things like checking your credit score or contacting. We also consider customer reviews.

We look at cards related to good or excellent credit ratings that will then provide a range of different benefits and improvements for someone who has these scores. We also look at low fees when it comes to those who have lower credit scores.