How to Pick the Best Rewards Card for You

How to work out which card best fits your needs.

Couple with credit card and laptop paying bills online in living room
(Image credit: (c)2013 Hero Images Inc. All rights reserved.)

Using one of the best rewards credit cards can be as simple or complex as you want it to be, so you'll have to decide how deep you want to dive into the game. At one end of the rewards spectrum are cash back cards that yield straightforward rewards with steady and predictable values. At the other end are travel rewards credit cards. These cards "can be a little more complex, but you can get more bang for your buck if you're willing to do the research to get a great redemption," says Thomas Donaldson, senior credit specialist for credit card research site CompareCards.

If you like to travel:

With a credit card that pays out airline miles, for example, you may squeeze out extra value by combing through flight schedules to find the best redemption rates. If your plans are flexible, you can compare the value of miles needed for flights to multiple destinations and search for flights on off-peak dates.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Where do you spend the most money?

If you buy a lot of groceries and gas, for instance, look for a rewards card that offers at least 2% or 3% back in both of those categories. Or, perhaps you could pick two rewards cards — one that offers at least 5% back on gas and another that will give you big rewards on groceries.

If you tend to carry a balance from month to month:

The interest you'll pay on your balance is likely to cancel out the rewards you earn. A Bankrate survey found that 46% of rewards credit card holders carry a balance (a sharp rise in the last four years), with an average total balance of more than $5,000. That's especially problematic given that rewards cards tend to charge higher interest rates than cards that don't offer rewards. Plus, most credit cards have variable rates. As the Federal Reserve continues to hike interest rates, the interest on any balance you're carrying will rise, too.

Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.