Rewards credit cards: learn their pros and if they are worth it!
You may be aware that there are many different rewards cards on the market. Learn about the most popular kinds of rewards credit card accounts and why they might be suitable for your financial goals.
by Aline Barbosa
Credit cards with rewards: earn bonuses with your everyday spending.
Nowadays, many credit card companies use rewards to attract new customers. That’s because most people want the purchasing power of a credit card and want to get something back for all of their spendings. But what are the pros of credit card rewards? And are rewards credit cards worth it?
There are pros and cons to almost anything in life, and rewards credit cards are no exception! Before jumping on the bandwagon, it is important to learn what they are to make an informed decision.
This article will tell you everything you need to know about rewards credit cards. You’ll learn the types, the advantages, the drawbacks, and why these are the most popular products in the market today. So read on to see more!
What are some credit card rewards?
There are various rewards that you can earn with a rewards credit card. Some common examples include cash back, points, and miles.
Cash back credit cards
A cash back credit card is a type of rewards credit card that gives you a percentage of your purchase amount back in cash. For example, if you have a card that offers five percent cash back on groceries, you would earn five percent of the total amount you spend on groceries each month back in the form of cash.
You can redeem the bonus for statement credits, deposits into a checking or savings account, or gift cards.
Points credit cards
With a points rewards card, you will earn points for every dollar you spend. You can redeem these points for a variety of different categories, such as travel, gift cards, and merchandise.
Miles credit cards
A miles rewards credit card is a type of credit card that allows you to earn miles for every dollar you spend. You can redeem those miles for travel rewards, such as free flights and hotel stays.
Miles credit cards offer some of the best perks available, including sign-up bonuses and excellent point redemption rates. They can be a great way to earn free travel and get more out of your spending.
Pros of credit card rewards: are they worth it?
The pros of having a rewards credit card are pretty straightforward: you can earn points, miles, or cash back on every purchase. Plus, rewards cards can help you save money on groceries, gas, and other everyday expenses. Additionally, many of those cards come with generous sign-up bonuses, which can be worth hundreds of dollars.
Another pro of rewards cards is that they can help you build your credit score. A high credit score can help you get approved for a mortgage or car loan and result in lower interest rates.
There are a few potential drawbacks to using rewards credit cards like all financial products. Meaning that you may spend more money than you would otherwise to earn rewards.
Also, it can be challenging to figure out which card offers the best bonuses for your particular spending habits. And if you don’t pay off your balance each month, you’ll end up paying more in interest than you would if you had a regular credit card.
So, are rewards credit cards worth it? The pros definitely outweigh the cons. However, before you sign up for one, it is important to ensure it is right for you. Here are a few tips to help you maximize your earnings:
- Make sure the card has a good rewards rate;
- Look for a high-rated rewards credit card with no annual fee;
- Be sure to use the card for everyday purchases;
- Pay off your balance in full every month.
If you follow these tips, you can enjoy the benefits of a rewards credit card while avoiding any potential pitfalls.
Some recommendations on credit cards with great rewards options!
Now that you know the pros of credit card rewards and what they can add to your everyday life, check below for some of the top products in this category. Undoubtedly one of these cards will fit your financial habits. So keep reading if you’re ready to start earning!
Chase Freedom Unlimited® credit card
This credit card offers an attractive sign-up bonus of 1.5% cash back on all purchases. It has no annual fee, and new customers can also enjoy a 0% intro APR for 15 billing cycles. There is no minimum redemption value, and all earned points don’t expire as long as the account is open.
You can choose to redeem your cash back as statement credits or direct money deposit into a checking or savings account. To become eligible for this card, you must have a credit score between 690 and 850.
|Credit Score||Good – Excellent|
|Regular APR||14.99% – 23.74% (variable)|
|Welcome bonus||Additional 1.5% cash back on every purchase (on up to $20,000 spent in the first year)|
|Rewards||5% cash back on travel purchased through Chase Ultimate Rewards;|
3% cash back on dining and takeout;
3% back on drugstore;
1.5% cash back on all other purchases.
Capital One Venture Rewards credit card
One of the top choices for any frequent jet-setters, the Capital One Venture Rewards card provides one of the most attractive sign-up bonuses in its category. You can earn unlimited 2x miles on every purchase you make and 5x miles on bookings made through Capital One Travel.
All miles earned don’t expire as long as the account is open. There’s no limit to how much you can earn. You can use your miles to cover travel expenses or redeem them by using Capital One Travel to book your next trip. There are no foreign transaction fees on this card, making it a valuable companion overseas.
|Regular APR||15,99% – 20,99% – 23,99% (based on creditworthiness)|
|Welcome bonus||60,000 bonus miles after spending $3,000 within 90 days of account opening|
|Rewards||2x miles on every purchase;|
5x miles on hotels and rental cars booked through Capital One Travel.
U.S. Bank Cash+™ Visa Signature® Card
This credit card has a sign-up bonus of $200 for new cardholders and charges no annual fee. Customers can choose up to 2 categories to earn a 5% rate and one other category for a 2% return. If you don’t mind tracking rewards categories, you can maximize your earnings with little to no effort.
There’s a 0% intro APR for balance transfers and purchases for 15 months, and you need a FICO score between 690 and 850 to become eligible for this card.
|Credit Score||Good – Excellent|
|Regular APR||14.24 – 24.24% (variable)|
|Welcome bonus||$200 after spending a minimum $1000 in the first 120 days of account opening|
|Rewards||5% cash back on $2000 combined eligible purchases within 2 categories;|
2% unlimited cash back in a category of your choosing;
1% cash back in all other purchases
Earnest Private student loan review: is it worth it?
Do you need to finish your studies and have no money? Find out how the Earnest Private student loan can help you out!Keep Reading
TD Direct Investing full review
TD Direct Investing has the best platform for beginners and experienced investors. This review will show you its pros and cons.Keep Reading
You may also like
Applying for the Scotia Momentum Visa Infinite Credit Card: learn how!
Learn about the great features of the Scotia Momentum Visa Infinite card, such as cash back, and find out how you can apply for this product!Keep Reading
First Access Visa® Card full review
If you have a low score and need a credit card, read our First Access Visa® Card review and find out how this credit card option can help!Keep Reading