Here’s a bit of a subjective question: “What credit card has the best rewards?”
My Personal Favorite Rewards Credit Card
Without thinking for more than a second, I can tell you that the American Express Blue Cash Everyday Card has the best ongoing rewards (in my opinion). And that’s the kicker. It has the best rewards for me. And perhaps you, but it all depends on what you’re looking for.
Most importantly, this cash back credit card has no annual fee, so you don’t have to pay to get those so-called rewards that you may never use.
Secondly, you get cash back, so your rewards are guaranteed not to go to waste; if you had an airline miles rewards card, such as the Capital One Venture Card, or a basic rewards credit card, the related rewards could expire or you could be forced to use them for something you’re really not interested in.
Additionally, the cash back card from American Express can be used to offset your credit card balance, meaning redemption is hassle-free. Every year I convert my points to statement credits and enjoy a really cheap monthly credit card payment.
Other rewards programs require you to redeem your points for merchandise or travel, and may have blackout or expiration dates; you’re usually also paying for those rewards annually, so whether they make sense financially is questionable as well.
Aside from the benefits of the automated system, the Blue Cash Everyday Card comes with the best cash back rates to boot; 3% cash back on groceries, 2% cash back on gas, 2% at department stores, and 1% cash back everywhere else.
There’s also no limit on the amount of money you can earn, so the savings can be pretty substantial if you’re a big spender.
One final thing I’ll note on this subject is that while I feel the Blue Cash Everyday Card has the best rewards, a combination of credit cards could prove more beneficial.
Do You Need More Than One Rewards Credit Card?
For example, certain credit cards offer higher cash back rewards in certain categories, such as travel, gas, groceries, entertainment, and so forth.
The Costco American Express card gives you 3% back on gas and 2% cash back at restaurants, so it may be wise to have that as well if you’re a Costco member (there’s no annual fee.)
By carefully choosing which credit card to use in specific situations, you may actually be able to maximize your rewards; this of course, takes a bit more legwork.
Remember, the credit card with the best rewards may be unique based on your own situation, so consider what you want/need personally before making a choice. What works for one person may be not work for another based on personal spending habits.
After all, a gas rewards credit card is useless for someone without a car. And travel rewards won’t do anything for someone who hates to travel. So find a credit card that matches up with you!
Upfront Bonuses May Trump Standard Rewards
Lastly, an upfront bonus may outweigh the longer term benefits of a certain rewards credit card. Case in point, the Chase Sapphire Preferred credit card, which comes with $400 cash back after you spend $3,000 in the first three months of card membership. Or $625 towards travel if you use it for such. Some tailored offers even come with 75,000 bonus points upfront, which is worth as much as $900!
Most rewards credit cards would require you to spend somewhere in the ballpark of $25,000 to $90,000 to earn that much cash back. For most people, that’s probably much more than their budget allows, and not a wise spending plan to earn a little cash back.
There’s also the Chase Freedom $300 cash back offer, which you can earn after spending just $500.
So be sure to look all available offers to see which is the best fit. You may find that the combination of an upfront bonus, along with two other credit cards for specific rewards may be better than just one all purpose rewards credit card.
All that said, there isn’t just one single credit card that offers the best rewards. It’s kind of like when you order a hamburger or a pizza and all your favorite toppings are spread among three different options, forcing you to add the items you want for an additional charge or miss out entirely.
Fortunately, you can hold several credit cards at once and take advantage of all the rewards.