Find the Best Reward Cards

Suppose you’ve determined that you want to get a rewards credit card. How do you choose the best one? Well, the fact is, there is no generic best rewards card because what is best depends on the person who is using it. The best rewards card for you is what we’ll try to help you figure out in this article as you examine the factors about you and about the card that will guide you to a satisfactory choice.

Information About You That Can Inform Your Choice

Time after time, experts in financial matters advise: do not get involved with a rewards card unless you can honestly say you meet the following criteria.

  • You don’t carry a balance on your credit card.
  • You always pay your bills (including credit cards) on time.
  • You won’t let the reward program influence your spending habits untowardly.

The reason the experts say this is that not following these behaviors with a rewards card can create a worse situation than with a “regular” card, because they have higher interest rates, and because any fee or interest will quickly undercut your rewards. Assuming that you’re set on these three points, the next thing to look at is how you spend.

Take some time to take stock of your credit card spending. Look both at your spending over the course of a year and your monthly spending. Your credit card records and/or receipts from the past can help you. Also take a look at purchases that you made by check or cash that you could potentially put on your credit card if it was in your interest to do so. 

One purpose of this financial review is partly to discover whether a tiered card is a suitable for you, and if you determine that it is, to help you find a suitable level that fits your spending habits. For example, a tier that occurs too close to your total spending is not likely to do you much good,  and it may make you feel pressure to surpass the level.

The second useful thing you can do with your monthly breakdown is to divide it into the categories that are often used to differentiate reward amounts as opposed to rewarding you (equally) for all purchases: drug stores, gas, home improvement, post offices, restaurants, supermarkets, and travel. Having done this, when you examine different card offers, you’ll be able to establish about what your reward amount might be.

Another important thing to do before you even begin to examine cards is to go to myfico.com

to do the calculations that will reveal your approximate FICO score (how card issuers will judge your creditworthiness). This will help provide you with an understanding of the range of card offers that you may qualify for.

Finally, the fun part. Take a look at the article “Types of Reward Credit Cards,” and consider what you might enjoy for rewards. You might use this opportunity to eliminate categories that don’t interest you, as well as to identify your top choices.

Finding Card Offers

Now that you have the information about yourself, you need information about card offers currently available. Because spending habits are so important in this choice, recommendations from others whom you trust may not be as useful as they are in other cases. But you can go to these four sites and get up-to-date lists of credit card offers:

  • creditcards.com/reward.php
  • bankrate.com/brm/rate/cc_ratehome.asp?classificationuid=8&childcategoryid=117&childcategory=Rewards%20Cards&classtypeuid=1&classtypedesc=Card%20Type&ec_id=&af=&ac=
  • creditcardguide.com/rewards-credit-cards.html
  • forbes.com/2008/06/20/loyalty-rewards-travel-pf-ii-in_ks_0620money_inl_slide_2.html?thisspeed=25000

Besides finding an up-to-the-minute list of offers at each URL, you’ll see the main details of each card’s terms and conditions along with direct links to applications.

Factors From the Rewards Cards

As you examine the reward card offers, there are two ways to consider them: there are factors that you’ll want to hold up to the information you gathered about yourself and your spending on the one hand, and on the other hand, there are factors that you will want to compare between and among cards.

Start this part of the process by taking three steps:

  • Review the credit-needed section to eliminate from your consideration cards that aren’t applicable to your current situation.
  • Eliminate cards that have an annual fee attached.
  • Eliminate cards with a short expiration date.

Now you’ve got a shorter list of potential matches to work with.

 Card Factors and You

 Three factors are critical to look at in terms of your own interests and situation:

  • type of rewards: if you can find cards that fit your area(s) of interest, then you’re in good shape. If there are no such cards, either find some other listings of credit card offers, review the cards already eliminated, or consider an alternative.
  • tiers: a tier system that suits your characteristic spending will bring you more rewards in the long run.
  • the qualifying purchases: a reward system that suits your characteristic purchase patterns will also bring you more rewards in the long run.

Factors to Compare Between and Among Cards

 After identifying the most likely card matches for yourself, use these factors to compare the different offers and choose the top runners.

  • Interest rates, both introductory and standing—pay attention to whether the rates are fixed or variable.
  • The length of time that the introductory rate is in force.
  • Bonuses for sign-up, for hitting charge tiers, and for any other actions.
  • Points/miles earned for each dollar spent.
  • Exclusions to earnings.
  • Categories that earn at a higher rate.
  • Any types of caps on rewards.
  • Any other types of exclusions or limitations.
  • Minimum requirements for gaining rewards.
  • Ability to combine rewards with other offers (for example, miles earned through travel).
  • Tier amount.
  • How long you estimate it will take to earn the reward(s) that interest you.

Be sure to read the full terms and conditions before you sign up for the card. Note that some application processes do not offer you the terms and conditions until after you sign up. Be wary. Also, even after receiving the card, pay attention to notices that may signal a change in the terms and conditions, which the card issuer may alter at any time.