A guide to rewards credit cards
Quick insights
- Many credit cards allow cardmembers to earn rewards when they spend on eligible purchases.
- Some credit cards earn points, which may be converted to different types of rewards, like cash back and airline miles.
- Depending on your credit card, you may be able to earn points at an accelerated rate on certain spending categories.
Whether you're looking to earn travel rewards or cash back for your purchases, you may benefit from applying for one of many rewards credit cards out there. Their selling point? Credit card rewards programs that let you leverage your everyday expenses and make the most of your lifestyle.
What are rewards credit cards and how do they work?
A rewards credit card provides a way for cardmembers to earn points on purchases. Using a rewards credit card can be a great way to earn a little extra on everyday purchases that you would've made anyway. Cash back, points and miles are the main types of credit card rewards.
Rewards programs do have rules on how you can redeem your rewards. Depending on the card you have, the points can be used in a variety of ways. There may also be a specific selection of what you can redeem your rewards for. Some credit card issuers require you to redeem your rewards through their portal.
How to earn rewards points
Earning points is the most common way to earn rewards. Generally, credit cards offer a certain amount of points per dollar spent on eligible purchases. Depending on the card, you may earn points at an accelerated rate for your spending in certain purchase categories. Common categories include dining, travel and gas stations.
Another popular way to earn points is through a new cardmember bonus. When you get approved for the card and reach a designated spending threshold within a set period of time, you may be able to earn additional credit card rewards. Depending on the credit card, these rewards may come in the form of points, cash back or airline miles.
Types of credit card rewards
Different credit cards different rewards programs. But in general, most rewards credit cards earn cash back, points or miles.
Cash back
With cash back rewards, you can earn back a small percentage of eligible purchases. Some credit cards earn a flat cash back rate on every purchases, while others may focus on more specific reward categories (like travel or business). Additionally, some cash back credit cards have rotating categories that change each quarter. Spending in these categories may allow you to earn cash back at an accelerated rate.
As you earn cash back, you can choose to redeem it for options like a statement credit, checking account deposit or gift card (options will depend on your specific credit card).
Points
Credit card points may offer more flexible ways to redeem rewards. Instead of directly earning cash back, some credit cards earn a certain amount of points per dollar in purchases. Like cash back credit cards, cards that earn points may also have opportunities to earn accelerated points on certain categories.
Depending on your credit card, you may be able to redeem points for cash back, gift cards, shopping portal purchases, travel purchases and more.
Airline miles
Some credit cards partner with airlines and offer rewards points in the form of airline miles, which can be used on future travel purchases. If you travel often for work or leisure, you may benefit from a credit card that earns miles.
Note that credit cards tend to partner with a specific airline. So if you fly with various airlines, this option may not be ideal for you. However, some credit cards allow point transfers to certain airline and hotel partners.
Picking the right rewards credit card
Picking your ideal rewards card is like finding the perfect pair of gloves: you want a perfect fit. You'll want to try to find a card that gives you the best value based on your everyday spending habits.
If you're a frequent traveler and want to put earned rewards towards flights, hotel room upgrades and other travel-related expenses, a card that earns miles may be a good fit for your lifestyle. If you're looking to earn general rewards and not focus on a specific category, a credit card that earns cash back or points on purchases may be the better choice. Think about the categories where you spend the most to help pick the right card for you.
In conclusion
Ready to apply for a credit card? There are plenty of rewards credit cards to choose from. In general, it may be best to consider a credit card that complements your spending and allows you to maximize reward earnings. Use the Chase Card Finder to help you begin your search for your ideal rewards credit card.
