How to Choose the Best Rewards Card

How to Choose the Best Rewards Card
  • Opening Intro -

    If you are in the market to choose a rewards card, how do you know which is the right one for you?

    Reward cards come in three main categories.

    • cash back cards
    • cobranded cards
    • transferable points cards


If there is one thing Americans love, it is earning rewards for using their credit cards. According to a survey performed by Fidelity, over 55% of people who have a credit card also own a rewards card. Apart from these, frequent flier miles and point-systems are also insanely popular.

If you are in the market to choose a rewards card, how do you know which is the right one for you? Reward cards come in three main categories.

1. Cash Back Cards

The first category and the most frequently chosen by Americans are cash-back cards. These cards work very simple: they give you a certain number of points for each dollar that you spend using the credit card. For example, if you spend $1,000 , you will get 1,000 points if the conversion rate is 1 to 1, which equals to roughly 10$.

While it is nice to receive cash back for your purchases, the negative side is that points take a lot of time to build up.

2. Cobranded Cards

Cobranded cards are another type of reward credit card. They are cards which are issued by a bank together with a hotel, airline or other company. The points you earn using these cards do not translate into cash, but give you benefits in the loyalty programs of the respective companies.

Some of them are very lucrative and offer great perks, such as the possibility of checking in extra luggage freely, priority boarding, elite status or other such bonuses.

The downside of these cards is that you have to carefully choose where to spend your points, since top-pick flights or hotels during vacation seasons are both very expensive.

Earning credit card awards is great. Budgeting credit card spend is greater. So learn how to do both.

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3. Transferable Points

The third type of reward card is one with transferable points, which provides you with the best of both worlds. You can redeem points for flights, transfer them towards loyalty programs and even redeem them for cash.

The drawback of these cards is that they charge an annual fee. Thus, you must make sure that you use them and that the points you get outweigh the fee, so you don’t actually end up losing money.

Choosing a Rewards Card

With all these options, making a choice is understandably not very easy. Here are the basic things you must know:

  • Pick a rewards card that you actually use. There is no point in getting the best card for frequent fliers if you don’t travel by plane.
  • Remember that you don’t have to choose just one. It’s ok to have 2-3 reward cards as long as you use them properly.
  • Search the market carefully for the best offers. There are a lot of options out there. Make sure you check a handful of options before making your choice, as some of them charge a cancellation fee.

All in all, a rewards card can really have a positive outcome in your life. As long as you use it correctly, just as you would use any other credit card, the benefits you will receive from it will put a smile on your face.

We know that the options out there are practically limitless, so we’d like for you to answer this question: What is your top reward card, and why do you use it?


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