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All Contents © 2019The Kiplinger Washington Editors
By Lisa Gerstner, Contributing Editor
| From July 2017
Rewards credit cards keep getting more and more rewarding. For the past several years, card issuers have been hustling to attract customers with generous sign-up bonuses and ongoing perks that have the potential to line your pockets with hundreds of dollars a year. The six largest credit card issuers are spending more than twice as much on card rewards than they did in 2010, according to a study by personal finance site MagnifyMoney.com. Chase pumps the most money into its cards, and it shows: Five cards issued by Chase grace our latest list of the best rewards credit cards. Plus, the release of the Chase Sapphire Reserve card last year shook up the market for premium travel rewards cards—those with fees in the hundreds of dollars annually and perks to match—spurring competitors to beef up their offerings or introduce new cards.
As you choose the card that suits you best, take stock of your spending habits. Do you rack up big grocery bills to feed your family? Burn through a lot of gas on your commute? Travel frequently? We’ve selected top cards in those categories and more. Also keep in mind that if you don’t pay off your credit card bill in full each month, a rewards card probably isn’t for you. Interest charges will likely cancel out any earnings that you capture.
To help you evaluate the winners, we calculated a typical annual rebate for each card, drawing on data from the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to determine average spending in various categories and assuming a total of $22,000 spent on the card annually. Except where noted, the rebate doesn’t account for sign-up bonuses or annual fees if they are waived the first year; earnings do not have caps or expiration dates; and the travel-oriented cards do not charge foreign-transaction fees.
Winner: Citi Double Cash MasterCard
Interest Rate: 0% for 15 months, then 14.49% to 24.49%
Annual Fee: None
Typical Annual Rebate: $440
If you like to keep a simple but lucrative cash-back card in your wallet, Citi Double Cash is tops. You’ll earn 1% when you make a purchase and an additional 1% when you pay the bill, for a total of 2% on everything you buy. The redemption options are flexible: Once your cash-back balance is $25 or more, you can request a check, an account credit or a gift card. Or you can have the money deposited into a Citi checking or savings account, or into any checking account from which you’ve paid your credit card bill at least twice. Rewards expire if you don’t earn any cash back for 12 months.
Honorable mention: The Alliant Cashback Visa Signature card (10.99% to 23.99% annual percentage rate) pays a whopping 3% cash back on all purchases the first year of your card membership, with no annual fee. After that, the cash-back rate drops to a still-exceptional 2.5%, and a $59 annual fee kicks in. Redeem cash back as a statement credit or as a deposit into an Alliant checking or savings account. The typical annual rebate the second year is $491, which tops the Citi Double Cash card, but you must become an Alliant Credit Union member to get its card (you can join by making a one-time, $10 donation to charity Foster Care to Success and opening a savings account with a complimentary $5 deposit from Alliant). Plus, cash back expires from four to five years after you earn it.
Winner: Fidelity Rewards Visa Signature
Interest Rate: 14.99%
Earn cash back at a rate of 2% on all purchases if you deposit the rewards into an eligible Fidelity Investments account. You can divide your earnings among up to five qualifying accounts—including a brokerage, retirement, Cash Management or 529 college-savings account—and you can even direct rewards to a friend or family member’s account. Rewards are tracked as points, and after you’ve accumulated 5,000 points you can redeem them as a cash deposit. You can also exchange points for gift cards and merchandise, but generally you’ll get a return of about 0.5% if you choose one of those options.
Honorable mention: Some cards juice up the rewards if you also have a checking or savings account with the issuing bank. The BankAmericard Cash Rewards Visa card (0% for 12 months, then 13.99% to 23.99%) pays back a standard rate of 3% on gas and 2% on purchases at grocery stores and wholesale clubs (up to a combined $2,500 spent quarterly in those categories) and 1% on everything else (typical annual rebate: $308). If you're a Bank of America Preferred Rewards customer who maintains a $100,000 combined balance in checking, savings, and Merrill Lynch and Merrill Edge investment accounts, you’ll get a 75% bonus on card rewards if you redeem the points into a BofA checking or savings account. That makes the effective cash-back rates 5.25%, 3.5% and 1.75% per category, respectively. (Any customer who redeems rewards into an eligible Bank of America checking or savings account can earn a 10% bonus. Preferred Rewards customers earn a 25%, 50% or 75% bonus, depending on their combined account balance).
Winner: Chase Freedom Visa
Interest Rate: 0% for 15 months, then 15.74% to 24.49%
Sign-up Bonus: Spend $500 in the first three months and get $150 back; add an authorized user along with your first purchase and get an additional $25 back.
Typical Annual Return: $334
Freedom offers 5% back on up to $1,500 spent in categories that change each quarter. In the first quarter of 2017, the Chase card offered the maximum rebate at gas stations and on local commuter transportation; in the second quarter, it offered the max on groceries. In the third quarter, cardholders get 5% back at restaurants and movie theaters, and holiday-related spending earns the max rebate in the final quarter of the year.
Honorable mentions: The U.S. Bank Cash+ Visa Signature card (14.99% to 23.99%; typical annual rebate: $330) pays back 5% on up to $2,000 spent quarterly in combined purchases from two categories you choose. Among the options are cell-phone bills, car rentals, ground transportation and fast food. Choose one category among gas stations, restaurants and grocery stores to earn 2% year-round, and get 1% on everything else. Cash back is redeemable as a deposit into a U.S. Bank checking or savings account, as a statement credit or as a Visa prepaid debit card. Rewards expire three years after you earn them.
Also worth a look: Discover It (0% for 14 months, then 11.99% to 23.99%; typical annual rebate: $314) offers 5% back on up to $1,500 spent in categories that change each quarter. The maximum-rebate categories were gas stations, ground transportation and wholesale clubs in the first quarter (note that you can pay only with Visa credit cards at Costco registers), and home-improvement stores and wholesale clubs in the second quarter. Restaurants qualify for the max rate in the third quarter, and Amazon.com in the fourth quarter. All other purchases get 1% back. The first year, Discover matches the rewards you’ve earned, doubling your cash back.
Winner: BankAmericard Travel Rewards Visa
Interest Rate: 0% for 12 months, then 15.99% to 23.99%
Sign-up Bonus: 20,000 points if you spend $1,000 in the first 90 days.
Typical Annual Rebate: 34,500 points, worth $345 in statement credits for travel purchases
If you’d like to bank your points for travel purchases without worrying about an annual fee or spending categories, this card will serve you well. You’ll earn 1.5 points on every dollar spent (three points per dollar on purchases you make through Bank of America’s Travel Center shopping portal). After you accumulate at least 2,500 points, you can redeem them at a rate of 1 cent apiece for a statement credit toward travel purchases you make on the card—anything from flights and hotel stays to taxi rides and amusement-park visits. Points are worth 0.6 cent each if you redeem them for cash; point values for gift cards vary. This card is eligible for a rewards bonus if you bank with BofA.
Honorable mention: Discover It Miles (0% for 14 months, then 11.99% to 23.99%; typical annual rebate: 33,000 miles, or $330 in statement credits) doles out 1.5 miles per dollar on all purchases, and you can redeem miles in any amount at a rate of a penny per mile for either a statement credit on travel purchases or cash. At the end of your first year of card membership, Discover matches the miles you’ve earned, doubling your miles for the year.
Winner: Barclaycard Arrival Plus World Elite MasterCard
Interest Rate: 16.99% to 23.99%
Annual Fee: $89, waived the first year
Sign-up Bonus: 50,000 miles if you spend $3,000 in the first 90 days
Typical Annual Rebate: 46,200 miles, or $462 in statement credits for travel purchases
You’ll earn two miles for every dollar you spend with this card, and once you build up at least 10,000 miles, you can redeem them at a rate of a penny per mile for a statement credit on a travel purchase of $100 or more that you’ve made in the past 120 days. Qualifying purchases range from flights, hotel stays and car rentals to fares for train, bus, taxi and ferry rides. Each time you redeem miles, you’ll get a 5% bonus on the number of miles you trade in. Miles are worth a half-cent each if you redeem them for gift cards or statement credits on non-travel purchases.
Honorable mention: The Capital One Venture Visa card (13.99% to 23.99%; $59 annual fee, waived the first year; typical annual rebate: 44,000 miles, or $440 in statement credits for travel purchases) also pays out two miles per dollar on every purchase, redeemable at the full penny-per-mile value for statement credit on travel purchases made within the previous 90 days (miles are worth a half-cent each if you get a check or a non-travel statement credit). Or book travel with miles through Capital One’s Rewards Center.
Winner: Chase Sapphire Preferred Visa
Interest Rate: 16.74% to 23.74%
Annual Fee: $95, waived the first year
Sign-up Bonus: 50,000 points if you spend $4,000 in the first three months; add an authorized user along with your first purchase for an extra 5,000 points
Typical Annual Rebate: 29,095 points, or $364 in travel purchases through Chase Ultimate Rewards
Frequent travelers should fare well with this card, earning two points per dollar spent on travel and dining and one point spent on everything else. Points are worth 1.25 cents each if you use them to book travel through the Chase Ultimate Rewards shopping portal, or you can transfer them at a 1:1 ratio to several partner airline and hotel programs, including Southwest Airlines Rapid Rewards, United MileagePlus and Marriott Rewards. If you go for gift cards or cash back instead, points are worth a solid penny apiece. (But they’re worth just 0.8 cent each if you use them at checkout at Amazon.com.)
Honorable mention: The Amex EveryDay card (0% for 12 months, then 13.99% to 23.99%; typical annual rebate: 32,521 points, or a $325 value for certain travel redemptions) is a no-fee avenue to earning American Express Membership Rewards points, which you can exchange at a penny-per-point value for flights, gift cards for Airbnb and some hotels, and Uber rides (some other redemption choices offer lower point values). You can also transfer points to participating frequent-travel programs, including Delta SkyMiles, at a 1:1 ratio for most programs minus a fee of 0.06 cent per point converted to a U.S. airline program. You’ll earn two points per dollar spent on up to $6,000 in supermarket purchases and at the American Express Travel shopping portal, and one point on everything else. Plus, if you make at least 20 purchases per billing period, you’ll get a 20% point bonus. The card charges a 2.7% foreign-transaction fee.
Winner: Chase Sapphire Reserve Visa
Annual Fee: $450
Sign-up Bonus: 50,000 points if you spend $4,000 in the first three months of card membership.
A credit card that charges an annual fee north of $400 may seem extravagant. But if you travel frequently, the supersize rewards that premium cards offer could outweigh the hefty fee. One of the card’s best benefits is a reimbursement of up to $300 each year for travel purchases you make on the card.
Travel and dining purchases earn three points per dollar spent, and other spending gets one point per dollar. Points are redeemed at 1.5 cents per point for travel purchases through the Chase Ultimate Rewards shopping portal, or you can transfer them at a 1:1 ratio to partner loyalty programs. Other features include a credit of up to $100 for a Global Entry or TSA PreCheck application fee, a free Priority Pass Select airport lounge membership, discounts with National Car Rental and Avis, and daily breakfast and late checkout at Luxury Hotel & Resort Collection properties.
Honorable mention: The Platinum Card from American Express is also worth a look. It recently upped its annual fee from $450 to $550, but it also goosed benefits for jet setters. Cardholders now earn five Amex Membership Rewards points per dollar on eligible flights and hotel purchases and one point on everything else. The initial bonus is 60,000 points if you spend $5,000 in the first three months. You’ll also get free access to a host of airport lounges, including Centurion, Priority Pass Select, Airspace and Delta Sky Club lounges (when flying on Delta). Among other perks: a $200 annual credit on incidental fees (such as checked bags or in-flight meals) with one airline of your choice, a $15 monthly reimbursement for Uber rides (plus an extra $20 in December), a fee credit of up to $100 for a Global Entry or TSA PreCheck application, and Gold status with the Starwood and Hilton hotel loyalty programs.
Winner: Southwest Rapid Rewards Premier Visa
Annual Fee: $99
Sign-up Bonus: 60,000 points if you spend $3,000 in the first three months
Typical Annual Rebate: 31,000 points
Pile up extra points toward free flights with this card, earning two points per dollar spent on Southwest flights, gift cards and Southwest Airlines Vacation packages, as well as at hotel and rental car partners. All other purchases earn one point per dollar. Each year, on your cardmember anniversary, you’ll get a 6,000-point bonus, which “just about covers the value of the annual fee,” says Brian Karimzad, director and loyalty analyst of MileCards.com. (Point values may vary but a $400 Wanna Get Away fare class ticket equals about 27,000 points.) Along with booking flights on Southwest Airlines, credit card customers can use their points for hotel stays, car rentals and gift cards.
Honorable mention: Especially for an airline card with no annual fee, the JetBlue World MasterCard (12.99% to 25.99%; typical annual rebate: 35,196 points) offers an outstanding payback: three points per dollar spent on JetBlue purchases, two points at restaurants and grocery stores, and one point on everything else. Cardholders also get in-flight food and cocktails for half price.
Winner: Starwood Preferred Guest Credit Card from American Express
Interest Rate: 16.24% to 20.24%
Sign-up Bonus: 25,000 points if you spend $3,000 in the first three months
Typical Annual Rebate: 30,000 points
This card packs even more punch now that Marriott International has acquired Starwood Hotels & Resorts. Cardholders earn up to five Starpoints per dollar at participating Starwood hotels (including the Sheraton, Westin and St. Regis brands), two points at eligible Marriott properties, and one point on all other purchases. Use points to book free nights at Starwood hotels, or transfer them to a linked Marriott Rewards account at a ratio of one Starpoint to three Marriott points. Another appealing option: Convert points to frequent-flier miles with more than 30 partner programs (most conversions are at a 1:1 ratio of Starpoints to air miles, but the United MileagePlus ratio is 2:1). For each 20,000 Starwood points that you transfer to an airline program, you’ll get a 5,000-point bonus. Cardholders also get free, in-room premium internet access at participating Starwood hotels. Points expire if your Starwood card account is inactive for a year.
Honorable mention: With no annual fee, the Hilton Honors Card from American Express (16.24% to 20.24%; typical annual rebate: 95,256 points) offers seven Hilton Honors points per dollar spent at participating Hilton properties, five points per dollar at restaurants, supermarkets and gas stations, and three points on everything else. You’ll get 500 bonus points each time you use the card to both book your hotel stay online and pay for it. Cardholders get automatic Silver member status and are upgraded to Gold status if they spend $20,000 or more on the card in a calendar year. The card charges a 2.7% foreign-transaction fee.
Winner: American Express Blue Cash Preferred
Interest Rate: 0% for 12 months, then 13.99% to 24.99%
Annual Fee: $95
Sign-up Bonus: Spend $1,000 in the first three months and get $150 back
Typical Annual Rebate: $381
Although Amex raised the annual fee from $75 to $95 last year, this card has big potential if groceries eat up a sizable portion of your budget, with a 6% rebate on up to $6,000 spent annually in supermarket purchases (superstores such as Target and Walmart don’t qualify) and 1% thereafter. You’ll also get 3% back on gas purchases (excluding gas stations at supermarkets, superstores and wholesale clubs) and purchases at select department stores, and 1% on all other spending. Redeem cash back in $25 increments as statement credits.
Honorable mention: The no-fee Consumers Credit Union Visa Signature Cash Rebate card (12.74% to 23.74%; typical annual rebate: $321) offers 3% back on up to $6,000 a year in grocery and convenience-store spending—which may include superstore purchases, depending on how Visa classifies the transaction. You’ll also get 2% back on gas you buy at any automated fuel dispenser and 1% on everything else. Total cash-back earnings are limited to $6,000 a year. You can join the Consumers Credit Union by paying a one-time, $5 fee to the Consumers Cooperative Association and depositing $5 into a savings account.
Winner: PenFed Platinum Rewards Visa Signature
Interest Rate: 9.49% to 17.99%
Sign-up Bonus: Spend $1,500 in the first 90 days and get $100
Typical Annual Rebate: 37,930 points, or $448 in travel bookings
Earn five points per dollar spent on gas purchases made at the pump, three points at the supermarket and one point on everything else. To get the best return, trade points at an average value of 1.18 cents per point for travel bookings through PenFed (gift cards and merchandise come at a rate of only 0.85 cent per point). Points expire five years after the month in which you earn them. You can join Pentagon Federal Credit Union by making a one-time, $17 donation to Voices for America’s Troops or the National Military Family Association and depositing $5 into a savings account.
Honorable mention: Looking for a generous yet simple rebate on gas purchases? The Fort Knox Federal Credit Union Visa Platinum card (10% to 18%; typical annual rebate: $197) delivers 5% cash back on gas when you pay at the pump, with no restrictions on what type of stations qualify. The only other category that earns cash back is retail merchants, at 1%. Cash back is automatically refunded to your account each month. You can join Fort Knox Federal Credit Union by paying a one-time, $10 fee to the credit union, depositing $5 into a savings account and becoming a member of the American Consumer Council (free for Fort Knox customers).
Winner: Amazon Rewards Visa Signature
Interest Rate: 14.99% to 22.99%
Sign-up Bonus: $50 Amazon.com gift card upon approval
Typical Annual Rebate: 29,012 points, or $290 in Amazon purchases
This card has become especially enticing for Amazon Prime members ($99 annual membership fee), who get five points per dollar spent on Amazon.com purchases, two points at restaurants, gas stations and drugstores, and one point on everything else. Not a Prime member? You’ll still get a healthy three points on Amazon purchases. Use points to pay for all or a portion of purchases at Amazon.com (one point equals 1 cent), or trade them for cash, gift cards or travel bookings.
Honorable mention: Members of Costco Wholesale (annual membership fee starts at $60) can apply for the Costco Anywhere Visa by Citi card (0% for seven months, then 16.24%; typical annual rebate: $428), which pays back 4% on up to $7,000 spent on gas per year, 3% on dining and travel purchases, 2% on Costco purchases, and 1% on everything else. Each February, you’ll receive a check for the previous year’s earnings, which you can exchange at Costco for merchandise or cash back until December 31 of the year the check is issued.
Winner: Discover It Chrome for Students
Interest Rate: 0% for six months, then 13.99% to 22.99%
Sign-up Bonus: A match of all cash back earned after one year, doubling your rewards
Typical Annual Rebate: $40 (assuming $200 spent monthly; $60 rebate includes a bonus for good grades)
Besides offering 2% back on gas and restaurant spending (up to $1,000 in combined purchases quarterly) and 1% on everything else, Discover It Chrome for Students tucks in some nice features for students. The cardholder gets a $20 cash bonus each school year that he or she achieves a GPA of 3.0 or higher. And Discover takes it easy on a student who slips up and misses a payment: There’s no late fee for the first offense and no penalty APR. You can redeem rewards in any amount at any time, as a statement credit or bank account deposit—or use them to pay for purchases directly on Amazon.com. The card charges no foreign-transaction fee—handy for students studying abroad.
Honorable mention: The Capital One Journey Student Visa card (20.99%; typical annual rebate: $30) comes with extra incentive for a student to manage the card wisely: The cardholder gets a standard 1% back on all purchases, but Capital One increases the total payback to 1.25% each month that the student pays the bill on time. After five on-time payments, you can access a higher credit line. Request cash back as a statement credit or check, or set up automatic redemptions when the balance reaches a certain threshold, starting at $25. The card charges no foreign-transaction fee.
Winner: Chase Ink Business Cash Visa
Interest Rate: 0% for 12 months, then 13.99% to 19.99%
Sign-up Bonus: $300 after you spend $3,000 in the first three months
Typical Annual Rebate: $375
Earn 5% back on up to $25,000 spent annually at office supply stores and on cell-phone, landline, internet and cable bills. Plus, get 2% on up to $25,000 spent yearly at gas stations and restaurants and 1% on everything else. If you travel a lot—and can justify a $95 annual fee—consider Chase Ink Business Preferred Visa (16.74% to 21.74%; typical annual rebate: 35,850 points, a $264 standard value or $353 value for travel purchases through Chase Ultimate Rewards after subtracting the annual fee). It charges no foreign-transaction fee and earns three points per dollar on the first $150,000 spent per year on travel, shipping, internet, phone, cable and certain advertising expenses, and one point on everything else. You can exchange points (at a rate of 1.25 cent per point) for travel purchases through the Chase Ultimate Rewards shopping portal, transfer them to partner frequent traveler programs at a 1:1 ratio, or trade them at a rate of a penny per point for cash or gift cards. If you pay cell-phone bills with the card, you’ll also get up to $600 per claim in insurance coverage for damage or theft to phones on plan. When you apply for a Chase Ink card, you must provide your business name and type, tax identification number, and years in operation.
Honorable mention: With the Amex SimplyCash Plus Business card (0% for nine months, then 13.24% to 20.24%; typical annual rebate: $352), you’ll earn 5% back on up to $50,000 spent yearly on cell-phone bills and at office-supply stores, 3% on up to $50,000 spent annually in one category of your choice (including gas, dining, airfare or hotel stays), and 1% on everything else.