The Best Credit Card Rewards Programs
July 1st, 2009, Written By: Kerri Randall
Among people that have a credit card with a rewards program, the happiest customers are the ones that actually redeem the rewards. If that’s not you, your first task is finding the card with the right program for you, with rewards you can actually attain and ones you’ll be able to use.
So which type of rewards are you interested in? The most common programs revolve around travel, savings, and cash-back. American Express has cards at the top of the list in all categories, including their Membership Rewards card. You’ll find the most variety of rewards with this one, but there is an annual fee to consider–will your rewards outweigh it?
Citibank has their Thank You program that has been compared to American Express Membership Rewards. They offer similar rewards, but you have to earn more points to redeem them with Citibank. Thank You has the edge in my opinion, though, because there are no annual fees, you get bonus points if you have a checking and/or savings account with them, and you can redeem your points for a credit towards your Citibank credit cards and student loans.
Travel Rewards
If you travel quite a bit, Starwood Preferred Guest Card by American Express comes recommended from MSN Money. There’s an annual fee, but you can choose which airline you want to redeem your miles with. Capital One No Hassle Miles offers 1.25 miles for every dollar you spend, and there’s no annual fee, no blackout dates, and no expiration date. If you don’t mind an annual fee, the Capital One No Hassle Miles Ultra card gives you 2 miles per dollar for $39/year.
Savings Rewards
If saving money is a priority, American Express offers Fidelity Investment Rewards, Fidelity Retirement Rewards, and Fidelity Investments 529 College Rewards. With each one, you’ll have 2% of your purchases deposited into a corresponding savings account with Fidelity, with no fees and no rebate cap. You can save as much as you’re able to.
Cash-Back Rewards
If you’re not a traveler and your own savings arrangement is working just fine for you, a cash-back rewards program might be the best choice. Not to be outdone, American Express comes recommended at the top again with the Blue Cash card. You can get 5% back on purchases at the grocery store and gas station, and 1.5% on all other purchases with no rebate cap. Discover More will give you 5-20% back on certain online purchases with no annual fee, and Chase Freedom will give you 3% back on gas and food for your first 6 months with them (and 1% after) with no fee and no cap.
Rewards Restrictions
However, there’s always a catch. First, most of these rewards are only redeemable if you’re paying off your balance in full every month. And not only do you have to spend a certain amount to offset annual fees and earn the most points, but you may also have to spend a certain amount to qualify for the highest rebate percentage, or even to be able to redeem the rewards at all. For example, with American Express Blue Cash, you have to spend $6500/year to get 5% back, otherwise you only get 1%.
But if you know you spend enough, these cards can definitely be worthwhile. Be sure to read the fine print and watch out for any restrictions, expiration dates, or changes to the terms of the programs–they can occur quickly and with little or no notice. Don’t apply for too many cards at once just to get the rewards, as that can hurt your credit score, but do stay on top of your available rewards and milk them for all they’re worth!
Bonus: If you don’t spend enough to qualify for these credit cards, some banks offer rewards on debit purchases if you have a checking or savings with them, such as National City. Do some investigating and you’ll be sure to stumble upon rewards program that don’t require getting a credit card.
Categories: Money Resources
