- How do you want to redeem rewards ?
- How much effort will you put in to maximize the rewards you earn ?
- How do you spend your money ?
- Are you partial to any commitment programs ?
- Are you will to pay an annual tip ?
We ‘ll break it all down for you here .
How do you want to redeem rewards?
Rewards credit cards fall broadly into two categories : cash back and travel rewards. If you don ’ thyroxine travel, the choice is pretty aboveboard. differently, you have a decision to make.
Cash-back: best for simple redemption
Cash-back credit cards offer rewards with a fixate dollar value that you can redeem for cash. ransom rewards is normally very simple, but you won ’ triiodothyronine be able to optimize the rewards you earn like you can with a change of location credit card.
Travel points and miles: best for rewards hackers
Unlike cash back, the value of travel rewards will vary depending on how you redeem them. Because of this, you can sometimes fly business course or international for much less in points than it might cost in cash. There ’ s a big caution though. truly optimizing your earnings might mean spending a set of time navigating long-winded commitment program rules or experimenting with lots of different redemption options. If you ’ ra looking for an uncomplicated card, you can still find a travel card that works for you. But it does narrow down the search a moment . Nerdy tip : A belittled count of rewards cards don ’ thyroxine fall into either cash back or travel rewards categories. For exercise : some shop credit cards offer rewards in the form of discounts you can merely use at the issuing store .
How much effort will you put in to maximize the rewards you earn?
Most cards earn different rates on different types of purchases. Get a poster that ’ s a inadequate equip and you ’ ll probable end up missing out on a big collocate of the circuit board ’ s value.
Fixed bonus categories
Most credit cards offer 2 % or more on specific outgo categories like grocery store shop, restaurants or gas stations. You ’ ll even be rewarded for other spend, but at a much lower rate, like 1 % to 1.5 %.
Unlike cards with fix bonus categories, cards with rotating categories will reward different spend categories sporadically, normally once a quarter. These cards take the most campaign to use, but they can besides be the most reward since you can typically earn 5 % back on these categories.
Flat rate rewards cards
If you ’ re not interested in keeping track of spend categories or prefer to keep just one menu in your wallet, a wag with flat-rate rewards might be a good option. For a while, 1.5 % back was the standard for flat-rate rewards cards. But nowadays, you can snag a card with 2 % back or more.
How do you spend your money?
Unless you decide to stick with a flat-rate rewards tease, you ‘ll want to find a card that matches how you spend your money. Besides travel purchases, grocery stores, restaurants and gasoline station south are some of the most common bonus categories. But you can besides find cards that rewards early purchases, like on-line shop or entertainment.
Are you partial to any loyalty programs?
If you decide to apply for a travel credit rating card, a co-branded credit calling card can give you extra perks with your prefer airline or hotel chain, plus greater earning power with that sword. But you will lose some tractability : You ’ ll alone be able to redeem these rewards with a few companies. Plus, you could run into express seat handiness or hotel rooms. In exchange for fewer perks with a specific airline or hotel, general travel credit cards come with much greater flexibility. Depending on the card, you might be able to redeem points by transferring points to collaborator airlines or hotels, booking change of location through your issuer ’ s travel portal, or receiving statement credits for travel purchases.
Are you willing to pay an annual fee?
Paying for a citation card might seem counterintuitive, but cards with an annual fee will come with higher rewards rates and a murder of perks. A few cash-back credit cards come with an annual fee ( normally $ 95 or less ). But the real investment comes from travel credit cards, where annual fees can run anywhere from $ 95 to $ 695. Most cards with high annual fees come with valuable perks like travel statement credits and airport lounge access, plus a high rewards rate. If you ’ re able to take advantage of what a card offers, it will normally make up for the annual tip.
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But if you ’ re a thrifty traveler who values saving money over traveling in luxury, you can still find a valuable travel menu with a first gear annual tip or none at all.
Choose with confidence
Choosing the best credit batting order for you will take some attempt, but it ’ second well worth it. You ’ ll be able to find a credit tease strategy that earns you firm rewards for years to come. So resist the urge to pick the first card you come across. Slow down, weigh the options and think about what you actually want .