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Are credit cards rewards worth it?

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    Credit card rewards are the points or cash back you earn from the purchases you make on your credit card. If you choose a rewards credit card with offers and bonuses that match your lifestyle, you'll tap into rewards when you make purchases using that card.

    What are credit card rewards?

    Credit card rewards may be earned by spending on your card. Through sign-up bonuses, also known as new cardmember bonuses, and ongoing benefits, you can save up your rewards over time and eventually redeem them for a plane ticket, a hotel stay, cash back, a statement credit or other perks. Choosing a card that offers bonus cash back, points or miles in the shopping categories where you spend the most money may be beneficial, as long as it's used responsibly.

    Reward points can typically be redeemed through your credit card reward portal or mobile app. It's important to check if there are any expiration dates associated with your earned points.

    Bonus point categories

    Credit card earning categories vary depending on the credit card. It makes sense to choose a credit card that rewards you for your typical purchases, such as dining, entertainment or travel.


    Credit cards may offer extra points from eligible purchases you made while traveling. Some examples may include spending money on hotel stays, plane tickets, rental cars, rideshares, cruises and more.

    Dining and entertainment

    Spending on dining and entertainment may earn you extra points on some rewards credit cards. The entertainment category can sometimes include spending on TV and streaming internet services or at movie theaters, concerts and sporting events.


    You may earn rewards such as points or cash back for spending money on public transportation and other forms of transit. This typically includes trains, buses, rideshares and parking, depending on the credit card.

    Everyday purchases

    Credit cards may offer rewards for the money you spend on grocery stores, gas stations and other everyday purchases in the form of cash back or points.

    Types of credit card rewards


    Rewards points allow you to earn more for certain bonus point categories. For instance, a credit card could offer you two times the points for worldwide travel and dining purchases. When it comes to co- branded travel credit cards, the redemption value is sometimes highest for that partner.

    Cash back

    Some credit cards offer you a percentage of cash back for your card purchases. Also, look for a card that offers a new cardmember bonus. For instance, a credit card could have an introductory cash back bonus of $200 for spending $600 on the card within the first three months. Cash back is perfect for cardmembers looking for more ways to redeem their rewards.


    You may receive airline miles from the purchases you make on your rewards credit card. Credit cards affiliated with an airline earn bonus miles for the money you spend on purchases with that airline. You can also find cards that give you miles for many types of purchases that may be applied towards discounted or free airfare. Some cards have sign-up bonuses that allow you to earn airline miles for meeting the spending requirements within the first few months.

    Four steps to take when choosing a rewards credit card

    Getting a rewards credit card that aligns with your budget and spending habits may earn you some great benefits. Here's how you can estimate the value of your potential rewards:

    1. Break down your expected credit card expenses on a rewards card for one month, dividing expenses into categories such as travel, grocery stores, restaurants and gas stations.
    2. Using the rewards credit card offer you're targeting, calculate how many rewards points or miles that monthly expense will earn in your account each month, being sure to account for any bonus spending categories.
    3. Multiply the number of monthly reward points by twelve to see how many points you may earn this year.
    4. Using the rewards credit card redemption pages, see what you can exchange that yearly value of points for.

    By determining the value of your potential redemptions, you can understand which credit card reward programs are right for you.

    Do you pay off your balance every month?

    If you pay off your balance in full every month, you may earn rewards with a rewards credit card and avoid paying interest.

    Cardmembers who can't pay off their balance in full will have to weigh the cost of any interest charges as well as other fees, such as an annual fee.

    Making the most of your rewards

    A rewards credit card is beneficial if you find a card with benefits and perks that you'll enjoy. Consider a credit card with:

    • Spending category bonuses that match your spending habits
    • Spending minimums that match your budget
    • Redemptions that match your lifestyle

    But if you aren't planning to go on a trip soon, it might make more sense to choose a credit card with different rewards like retail discounts.

    Do your spending habits match the spending requirements and bonuses?

    When looking for the right rewards credit card, make sure the spending requirements and category bonuses line up with your typical spending habits. Make sure that you don't have to change your spending habits to get the rewards offered by your credit card.

    Consider a credit card with bonus point categories that align with your purchases. If you frequently go out to eat, consider a credit card that offers bonus points for dining at restaurants. If you want to get rewarded for your everyday spending, find a card that gives you cash back for purchases like at grocery stores and gas stations.

    Are the rewards worth the annual fees?

    Many rewards credit cards include annual fees. Before applying for a rewards card, make sure the benefits and rewards make the annual fee worthwhile. If you can't or don't want to pay a fee, look for a rewards credit card without one.

    Make your rewards credit card worth it

    By understanding the annual fees and interest charges that come along with it, you may be able to determine if a rewards credit card is worth applying for.

    By looking at spending bonus categories and available redemption options, you can understand how your lifestyle can match a card's rewards program.

    When you look at the cost and value of a rewards credit card together, you can evaluate if a rewards credit card is right for you.

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