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A great rewards credit card is one of the best ways to maximize every dollar you spend.
Between different rewards categories, fees, redemptions, and more, rewards credit cards vary greatly. The best rewards card for you can depend on your regular purchases and how you want to use the rewards you earn. With today’s top rewards cards, you can gain hundreds of dollars (or more) in value this year and beyond.
Best rewards credit cards for 2025
Chase Sapphire Preferred® Card
Best overall
Blue Cash Preferred® Card from American Express
Best for supermarket spending
Capital One Savor Cash Rewards Credit Card
Best for everyday and travel cash back
Capital One Venture Rewards Credit Card
Best for simple travel rewards
Chase Freedom Unlimited®
Best for combining rewards
U.S. Bank Altitude® Connect Visa Signature® Card
Best travel rewards for no annual fee
Citi Strata Premier℠ Card
Best for unlimited rewards categories
Chase Sapphire Preferred® Card
Best overall
- Annual fee$95
- Welcome offerEarn 60,000 bonus points after spending $4,000 in the first 3 months — that's worth $750 when redeemed through Chase Travel℠
- Rewards rate
- 5x points on travel purchased through Chase Travel℠
- 3x points on dining, select streaming services, and online groceries
- 2x points on all other travel purchases
- 1x points on all other purchases
Why we like it: Though it does charge $95 annually (unlike some other cards on our list), the Chase Sapphire Preferred is a great example of a rewards credit card that can have value far beyond its annual fee. You can easily make up the cost whether you travel often or only a few times per year.
Rewards categories cover both travel and everyday spending, you’ll get up to $50 in annual credits for Chase Travel℠ hotel bookings, and each year you'll enjoy a 10% points bonus. But what really sets the Chase Sapphire Preferred apart is redemption value. After earning your points in bonus categories, you can redeem them in the Chase Travel portal at a boosted rate of 1.25 cents per point.
Chase also has a huge list of airline and hotel transfer partners you can transfer points to at a 1 to 1 ratio. These include domestic airlines like JetBlue and Southwest, international programs like Emirates and Flying Blue Air France KLM, and hotel brands like Marriott and Hilton.
This card can also make a great pair with a Chase cash-back card like the Chase Freedom Unlimited® or Chase Freedom Flex®. You can combine the points you earn across each card’s rewards categories and make the most of your boosted redemptions or transfer to your preferred partners to save even more on your next trip.
Read our full Chase Sapphire Preferred Card review
Blue Cash Preferred® Card from American Express
Best for supermarket spending
- Annual fee$0 intro annual fee for the first year, then $95.
- Welcome offerEarn a $250 statement credit after spending $3,000 in eligible purchases in the first 6 months
- Rewards rate
- 6% cash back at U.S. supermarkets (on up to $6,000 in purchases annually, then earn 1%)
- 6% cash back on select U.S. streaming subscriptions
- 3% cash back on transit and U.S. gas stations
- 1% cash back on all other purchases
- *Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout
Why we like it: When it comes to maximum cash back potential, the Blue Cash Preferred Card from Amex is at the top of our list. Based on average American spending, you can get nearly $600 cash back from this card each year. Even if you just max out the 6% earnings at U.S. supermarkets by spending $6,000 in a calendar year, you’ll get $360 back on your grocery bills.
While earning rewards throughout the first year, you can also take advantage of a great 0% intro APR offer on new purchases and balance transfers. Plus, it has one of the top welcome offers among cash-back cards right now. Combined with the Blue Cash Preferred’s everyday rewards, you’ll find no shortage of first-year and long-term value from this card.
Read our full review of the Blue Cash Preferred Card from American Express
Capital One Savor Cash Rewards Credit Card
Best for everyday and travel cash back
- Annual fee$0
- Welcome offerEarn $200 cash back after spending $500 on purchases in the first 3 months
- Rewards rate
- 8% cash back on Capital One Entertainment purchases
- 5% cash back on hotels and rental cars booked through Capital One Travel
- 3% cash back on dining, entertainment, popular streaming services, and at grocery stores (excluding superstores like Walmart and Target)
- 1% cash back on all other purchases
Why we like it: The Capital One Savor Cash Rewards card has some of the most versatile rewards categories from a cash-back card today. It earns 3% cash back across a few main categories: grocery stores, dining, entertainment, and popular streaming services. But those categories cover a broad range of purchases.
These broad categories even help make the Capital One Savor a solid choice for travel — something we don’t typically say about cash-back credit cards. The 3% entertainment category can go a long way toward bringing down the price of travel activities; eligible purchases include museums, professional sporting events, theatre events, amusement parks, zoos, and other tourist attractions. Plus, you’ll pay no foreign transaction fees on purchases you make abroad, including purchases in other 3% rewards categories like dining at restaurants.
Read our full Capital One Savor Cash Rewards Credit Card review
Capital One Venture Rewards Credit Card
Best for simple travel rewards
- Annual fee$95
- Welcome offerEarn 75,000 miles after spending $4,000 on purchases in the first 3 months, plus a one-time $250 Capital One Travel credit in your first cardholder year – that’s equal to $1,000 in travel
- Rewards rate
- 5x miles on hotels, vacation rentals, and rental cars booked through Capital One Travel
- 2x miles on all other purchases
Why we like it: It doesn’t get easier to earn travel rewards than with the Capital One Venture card. With 2x miles on every purchase, you can easily rack up rewards toward future travel with everyday purchases and travel bookings alike. We also like the flexibility of the miles you earn. You can choose to book an upcoming trip through Capital One Travel using miles, transfer miles to Capital One’s 15+ airline and hotel partners, or use miles to get statement credits toward any travel purchase you make with your card.
A relatively low annual fee, a few solid annual credits, and a highly valuable welcome bonus (which can help you save a significant amount on your next trip) make the Capital One Venture one of the best travel credit cards available now.
Read our full Capital One Venture Rewards Credit Card review
Chase Freedom Unlimited®
Best for combining rewards
- Annual fee$0
- Welcome offerEarn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back
- Rewards rate
- Enjoy 5% cash back on travel purchased through Chase Travel℠
- 3% cash back on drugstore purchases and dining at restaurants (includes takeout and eligible delivery service)
- 1.5% on all other purchases
Why we like it: Chase Freedom Unlimited is another one of the best cash-back cards available today with great crossover value for travel rewards. Its minimum 1.5% back on every purchase (plus higher earnings in rewards categories) can be great for making sure you get the most out of every dollar you spend. When you’re ready to redeem, you can opt for cash rewards or use your rewards as Chase Ultimate Rewards points to book travel through Chase Travel.
If you have a Chase Sapphire Preferred Card or Chase Sapphire Reserve® in your wallet, you can also pool your points together and get the boosted redemption rates those cards offer. For example, say you earn $300 cash back in a year with your Chase Freedom Unlimited, or 30,000 points. You could transfer them to your Chase Sapphire Reserve account, which earns a redemption value of 1.5 cents per point through Chase Travel. Now, your original 30,000 points are worth up to $450 of travel.
The Chase Freedom Unlimited also has some of the best perks from a cash-back card today, including a solid introductory 0% APR on new purchases and balance transfers, no annual fee, and a strong cash welcome bonus based on your spending.
Read our full review of the Chase Freedom Unlimited
U.S. Bank Altitude® Connect Visa Signature® Card
Best travel rewards for no annual fee
- Annual fee$0
- Welcome offerEarn 20,000 points if you spend $1,000 in the first 90 days
- Rewards rate
- 5x points on prepaid hotels and car rentals booked directly in the Altitude Rewards Center
- 4x points on travel 4x points at gas stations/EV charging stations (on your first $1,000 each quarter)
- 2x points on dining, streaming services, and at grocery stores
- 1x points on all other eligible purchases+
Why we like it: The U.S. Bank Altitude Connect may not be the best-known rewards credit card out there, but it has the potential to offer far beyond what you might expect from a no-annual-fee travel card. Its rewards categories span travel booked through the issuer’s Altitude Rewards Center as well as a strong 4x rewards on other travel purchases. And though the 4x rewards on gas or EV charging is capped after $1,000 spent each quarter, you could still earn up to $160 by maxing out the rewards quarterly. Dining, streaming services, and grocery stores round out the rewards categories at 2x per dollar.
But its benefits really help the U.S. Bank Altitude Connect stand apart from other no-fee travel cards. You’ll get a statement credit toward TSA PreCheck or Global Entry fees every four years and annual airport lounge access (four complimentary visits per year) with Priority Pass Select membership — a perk typically reserved for more premium travel credit cards. Plus, earn a solid welcome bonus with a relatively low spending requirement as a new cardholder and enjoy an introductory 0% APR on new purchases and balance transfers.
Citi Strata Premier℠ Card
Best for unlimited rewards categories
- Annual fee$95
- Welcome offerEarn 75,000 bonus points after spending $4,000 in the first 3 months (redeemable for $750 in gift cards or travel rewards on thankyou.com)
- Rewards rate
- 10x points on hotels, car rentals, and attractions (booked through CitiTravel.com)
- 3x points on air travel and other hotel purchases, restaurants, supermarkets, gas stations, and EV charging stations
- 1x points on all other purchases
Why we like it: The Citi Strata Premier has a whopping five spending categories that earn an unlimited 3x points on each dollar you spend. Even among the best rewards credit cards, many only offer that much in two or three categories — while others with higher earning rates typically cap the amount of rewards you can earn annually. But if your regular budget is often focused across these rewards categories, the sky is the limit on how many points you can earn annually with this card.
Citi Strata Premier is also great for hotel rewards, especially if you’re not committed to a single hotel loyalty program and can use the issuer’s booking portal. Not only will you get 10x points on hotels (plus rental cars and attractions) booked through CitiTravel.com, but you’ll get up to $100 back once per calendar year on hotel bookings over $500 (not including taxes and fees) that you make through the site. Plus, other hotel spending is included among the 3x categories to help you also earn rewards on rooms you book directly with hotels.
How do rewards credit cards work?
A good credit card with rewards that suit your spending can help you save money on daily expenses, earn free or discounted travel, and get annual benefits that put money back into your pocket year after year.
The best credit card with the best rewards for you should always offer valuable incentives — points, miles, or cash-back rewards and other benefits — for the money you're already spending.
You could, for example, earn rewards on everyday spending and keep redemptions simple by using cash-back rewards. But if you're a jet-setter and don’t mind strategizing redemption options, you may prefer to earn points or miles you can use for future flights and hotel stays. Or, like many spenders, you might instead do a little bit of both and use different credit cards for maximizing purchases.
Just remember that your rewards card is still a high-interest credit card. Earning great rewards only works if you’re not carrying a balance — which can quickly lead to expensive credit card debt.
Find a card that rewards your regular purchases and track your budget so you don’t overspend each month. You can save a lot of money with rewards, but only if it’s not costing you in interest at the same time.
3 types of credit card rewards
To find the best rewards credit card for you, you can start with the types of rewards, how to earn them, and the most valuable ways to use them.
Credit card rewards programs differ depending on the issuer and specific card you choose. Some may offer the same value for any redemption (gift cards, cash, travel, etc.), while others may give a much higher value for one redemption over another. Always read the terms of your card’s rewards program to know what you can get for each redemption.
The three most common types of credit card rewards include points, miles, and cash back:
Points
Credit cards that earn points are often part of a larger rewards program, such as American Express Membership Rewards or Chase Ultimate Rewards. You can earn at least one point per dollar on every purchase with your card, then get extra points in specific bonus categories. These categories may range from various travel spending to dining out, streaming services, and more.
Points are a flexible rewards currency. You can often redeem them for statement credits, booking travel, gift cards, and more. Some rewards programs even allow you to transfer your points to travel partner loyalty programs. Many points-earning cards are travel rewards credit cards, so you’ll often find travel redemptions are most valuable.
Read more: Best travel credit cards
Best for: Credit card points are great if you want the most flexibility in how you redeem your rewards — they’re particularly beneficial if you prefer a range of redemption options rather than being restricted to cash back or specific travel brands. Cards with points rewards are also generally good for travelers, since they tend to offer great earning rates and redemptions on travel.
How to earn credit card points
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Sign-up bonuses: Many credit cards offer lucrative bonuses for new cardholders after spending a certain amount within the first few months.
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Regular purchases: Cardholders typically earn points for every dollar they spend on eligible purchases.
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Bonus categories: Some cards offer higher point rates for specific categories, like travel, dining, streaming subscriptions, or gas stations.
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Shopping portals: Many credit card issuers have online shopping portals where users can earn extra points by shopping with partner retailers.
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Dining programs: Some card issuers have dining reward programs that give extra miles when you dine at partner restaurants.
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Special promotions: Occasionally, issuers might run promotions or partnerships where cardholders can earn additional points for a limited time.
Related: How to reserve a table at the hottest restaurants with your credit card
Miles
General travel cards with flexible rewards or co-branded cards for specific airline loyalty programs may earn miles rewards. They often earn the best rewards rates on travel spending, though you’ll find many with everyday bonus categories too. You can typically redeem miles for travel expenses, including airfare. If your miles-earning card is an airline card, you may have the option to use your rewards for upgrades, checked bags, lounge access, and other benefits.
Best for: Credit card miles are ideal for frequent travelers. They cater to individuals who are looking to offset their travel expenses and enjoy travel perks like elite airline status, airport lounge access, priority boarding, and free checked bags. Because many cards that earn miles are co-branded airline cards, they’re a good choice for travelers who prefer flying with a specific brand each time.
Read more: Our picks for the best hotel credit cards and best airline credit cards
How to earn credit card miles
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Sign-up bonuses: Many miles-based credit cards offer a sizable chunk of miles as a bonus for new users who meet a certain spending threshold after opening an account.
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Everyday purchases: Typically, cardholders earn a set number of miles for every dollar they spend.
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Travel-related expenses: Many travel credit cards offer additional miles for expenses related to travel, like booking flights, hotels, or car rentals. Sometimes these bonus rewards require booking through a specific platform.
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Promotional campaigns: Issuers may run limited-time offers where spending in certain categories or with certain partners can yield bonus miles.
Related: How to earn elite airline status with a credit card
Cash back
Cash back may be the most straightforward form of credit card rewards. Cash-back credit cards offer a percentage of each purchase you make back as a reward. Rewards categories generally focus on everyday spending, like grocery stores, gas stations, drugstores, or streaming services. When you’re ready to redeem your cash back, you can trade it for a statement credit or receive the cash value as a check or bank account deposit.
Best for: Cash-back credit cards are ideal for simple rewards and a tangible, immediate return on your spending. They are especially beneficial for those who may not travel frequently and prefer a clear-cut, monetary reward over points or miles.
How to earn cash back
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Sign-up bonuses: Some cash-back cards offer a bonus cash reward for new users who spend a specific amount within the first few months.
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Everyday purchases: Cardholders earn a defined percentage back on all qualifying purchases.
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Category-specific rewards: Many cash-back cards offer higher percentages for specific categories, such as groceries, gas, or dining.
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Rotating categories: Some cards offer higher cash-back rates on categories that change periodically, requiring cardholders to activate these categories to earn the bonus.
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Shopping through issuer portals: Similar to points-based cards, some cash-back cards allow users to earn additional rewards by shopping through the issuer's online portal with partner retailers.
Should I open a rewards credit card?
Whether or not you should open a rewards card depends on your individual goals.
If you don’t already have great credit, you may have difficulty qualifying for the best rewards credit cards — though there are some solid rewards cards you can get approved for while building credit. Check if you’re preapproved before you apply for a new card. This can give you an idea of your likelihood of approval without impacting your credit score.
Related: How to check your credit score
You should also be in the habit of paying down your balances in full and on time each month before you open a new rewards credit card. These cards carry high interest rates — you might be assigned an APR of 20% or more on any balances you carry.
Even with the best rewards rates and redemptions, you won’t be able to make up those interest charges in rewards value. Always use your rewards card to make purchases within your budget so you’re not left with high debt balances in exchange for points, miles, or cash back.
Read more: How to use a credit card responsibly
Finally, make sure a rewards credit card can actually help you save money over the long term.
Review your monthly expenses to identify where you spend the most, whether it’s at the grocery store, dining out at restaurants, filling up at gas stations, or booking travel. When you know your most frequent expenses, you can choose a card that rewards those specific categories more generously.
A high-value welcome bonus or long introductory APR can save you a lot of money as a new cardholder. But don’t forget to compare these perks alongside long-term benefits and rewards to ensure you’re getting the most from your new rewards credit card year after year.
What to look for in a rewards credit card
Start your search for the best rewards credit card by considering these eight major factors:
Annual fee
Some rewards credit cards charge no annual fee, while others may have fees ranging from under $100 to over $500. You may also find some rewards credit cards waive the annual fee cost for the first year.
The point isn’t the fee itself. The one question you need to ask is: "Will the benefits I get offset the cost?"
Other fees
In addition to the annual fee, stay on top of any other fees you could take on with your new rewards credit card.
For example, if you plan to use your card to earn rewards on vacation abroad, make sure there are no foreign transaction fees. These fees could add between 1% to 3% on top of each international purchase and lower the value of any rewards you’ll earn.
Other fees to consider include balance transfer fees, late fees and penalties, cash advance fees, and more. Knowing when you may be charged these fees — and how you can avoid them — can help you avoid extra charges over time.
Read more: Credit card fees explained — 8 types you should know
Earning potential
Before applying for a new card, know how much you can expect to earn with it over time. You can do this by comparing your regular spending to the rewards offered.
For example, if you're researching a flat-rate 1.5% unlimited cash-back card and you spend roughly $500 on purchases each week, here's what your approximate annual return will be:
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$500 per week x 52 weeks = $26,000 in annual spending
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$26,000 x .015 (1.5% cash back) = $390 cash rewards
Spending categories
While some rewards credit cards offer blanket points, miles, and cash back for every purchase, not all of them do. Some have tiered programs where you earn more in one category and less in another. For example, say Credit Card X offers the following spending categories:
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5x points on gas and grocery store purchases
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3x points on dining and takeout
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1x points on everything else
If you often cook at home and commute to work by car, this could be a great way to make the most of your frequent grocery trips and gas station fill-ups. On the other hand, if you prefer dining at restaurants or ordering takeout over buying groceries and you take public transportation to work, there’s likely a different rewards card that's a better fit for your spending.
Read more: Best credit cards for groceries
Welcome bonus
Welcome bonuses can help you earn hundreds of dollars in rewards value as a new cardholder. If you have a cash-back credit card, you’ll typically get a cash bonus after meeting a spending threshold. For credit cards that earn points or miles, you’ll earn bonus rewards you can put toward travel and other redemption options after you meet the spending requirement.
Here's the potential downside:
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You usually have to spend a certain amount within a given time frame to receive the bonus (example: spend $500 in the first 3 months and receive $200 cash back).
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If you fail to make your payments on time or don't spend the required amount during the introductory window, you forfeit the bonus.
Read more: Best credit card welcome bonuses for 2025
Redemptions
The value of your credit card rewards depends a lot on the available redemptions. Don’t forget to compare your card’s redemption options alongside its rewards categories. A good rule of thumb is to look for a redemption value of at least 1 cent per point or mile. This is equivalent to the value of cash back rewards.
But you can get much more than that with many rewards cards. For example, some offer a boosted value for your points or miles when you use them to book travel via the issuer’s credit card rewards program. Top credit card rewards programs today include American Express Membership Rewards, Chase Ultimate Rewards, and Capital One Travel.
Compare: Amex vs. Chase points — Who has the best rewards program?
Another way to get the best value is by transferring your rewards. You can transfer the points you earn from your rewards card to airline and hotel partners, then redeem through those loyalty programs. Depending on your travel plans, this is a great way to get the maximum value toward a future trip.
Learn more: How do travel credit cards work?
Intro APR offers
Introductory 0% APR offers can give you a free pass from interest charges on your card balances throughout the intro period. The 0% APR applies to new purchases or balance transfers (or both). But keep the end date of your offer in mind. Once the intro period expires, you'll start to accrue interest on any outstanding balances at your card’s ongoing APR.
The average credit card APR today is over 22% (on cards with revolving balances), according to the Federal Reserve. Make sure you have a plan to pay down your balances before the intro period ends so you can avoid taking on any high interest debts.
Credit score
For the best chances of getting approved for a rewards credit card, you’ll need to meet some criteria that proves your creditworthiness to credit lenders:
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A higher-than-average credit score (exceptional in some cases)
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An established credit history (proving that you can use credit responsibly)
That being said, don't waste a hard credit inquiry on a card that is presumably out of your credit realm. For example, if you’re a beginner with no established credit, you'll have a much better chance of getting a student credit card or a secured credit card than a high annual fee premium travel card.
Some credit card companies offer preapprovals on select cards, which you can use to avoid a potential (temporary) hit to your credit. This will let you know if you have a good chance of getting approved without a hard credit inquiry.
Read more: Prequalified vs. preapproved credit card offers — What’s the difference?
How to calculate credit card rewards
You can earn rewards with every swipe of your credit card, but how much? These are the five steps you can apply to almost any transaction:
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Identify the reward rate: Check your credit card's terms and conditions. For example, the rewards rate could be 2% flat cash back for every purchase.
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Determine the purchase amount: This would be the total amount you spent. Let's say your bill was $100.
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Multiply the purchase amount by the reward rate: $100 x 0.02 = $2.
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Consider any caps or limits: Some cards have a maximum reward limit per month or year. Ensure your calculated reward doesn't exceed this limit.
Keep in mind, some transactions won't earn credit card rewards, including:
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Balance transfers/balance transfer fees
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Cash advances
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Lottery tickets or casino gaming chips
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Interest payments
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Fees of any kind, including an annual fee
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Unauthorized or fraudulent charges
How to redeem credit card rewards
There's no shortage of ways to redeem your credit card points. Though redemptions vary depending on the specific card and issuer, here are some of the most common options:
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Statement credit: This is a credit for the value of your rewards applied directly to your credit card balance. Some rewards cards only apply statement credits to specific types of purchases, like travel spending.
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Direct deposit into your bank account: Transfer the cash value of your rewards directly into a linked bank account.
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A check: You’ll receive a check in the mail for the cash value of your rewards, which you can deposit into a bank account or cash.
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Gift cards: Trade your rewards for preloaded cards that you can use for purchases at specific retailers or a group of retailers.
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Tickets to events: Use your rewards for access to concerts, sporting events, and more.
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Charitable donations: Put your rewards toward a monetary contribution to a nonprofit organization or cause.
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Travel: Book flights, hotels, rental cars, and more using credit card points and miles through your credit card rewards program.
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Travel upgrades: You can also use rewards to enhance your travel experiences by upgrading a flight seat or getting a room upgrade at a hotel.
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Travel transfers: Transfer your points or miles to partner hotel and airline loyalty programs and book travel directly.
Rewards credit cards FAQs
Want to know more about choosing the best credit card with rewards that fit your spending? The answers to these frequently asked questions may help:
What is a rewards credit card?
A rewards credit card is a type of card that earns cash back, points, or miles on purchases.
Some rewards cards offer a flat rewards rate on every purchase, while others have boosted bonus rewards rates in specific categories. Rewards categories can vary, but often cover a range of everyday spending (groceries, dining, gas, streaming services) or travel (airfare, hotel stays, rideshares, car rentals).
What is the best credit card for rewards?
To find out what credit card has the best rewards, you’ll need to look at your own spending and preferences.
For example, a cash-back rewards credit card like the Blue Cash Preferred from American Express may be best for someone who spends a lot of their budget at U.S. supermarkets, while the Capital One Venture Rewards Credit Card may work better for someone with variable spending who likes to travel. A co-branded travel rewards card may be ideal for someone who has one preferred airline or hotel, while the Chase Sapphire Preferred Card could be a better option for someone who wants different travel booking options through a flexible rewards program.
Before you decide on a new rewards card, think about your spending habits, how you want to redeem rewards, and other card details to find the option that holds the maximum value for you over time.
What credit score do I need to get a rewards credit card?
Rewards credit cards typically require good-to-excellent credit (or a FICO score of at least 670) for the best chances of approval. This is true for top cash-back credit cards, travel credit cards, and other popular rewards credit cards. If you don’t already have a great credit score, there are some cards for building credit that offer some rewards.
Read more about today’s best secured credit cards and best student credit cards for a look at credit-building cards with rewards.
What are the best sign-up bonuses for rewards credit cards available right now?
With today’s best credit card welcome offers, you can earn hundreds of dollars in rewards value. Some premium cards even have welcome bonuses with a potential value of $1,000 or more. In addition to ongoing sign-up bonuses, you can occasionally find boosted, limited-time credit card welcome offers too.
For the most up-to-date info about rewarding offers for new cardholders, see our current list of the best credit card sign-up bonuses.
Are rewards cards really worth it?
Rewards credit cards are worth it if you can get more value from the card’s benefits and rewards than you pay for the annual fee.
If you choose a card with rewards and benefits for purchases you already make, you can often far outpace the annual fee cost in rewards value. For some people, a rewards card with no annual fee at all may be even more worth it.
However, rewards cards are often not worth it if you carry a balance. Even the best credit card rewards can't compete with interest charges well over 20% APR. Focus on paying down existing credit card debt before you use a new rewards credit card to save on spending.
How much are credit card rewards points worth?
The value of your points can vary depending on your card’s rewards program and the redemption option you choose.
For example, cash-back credit cards typically earn a percentage of your purchase back, which you can redeem for the cash value in the form of statement credits, gift cards, or a check. But credit cards that earn points or miles often have more flexible redemption options. Under the issuer’s rewards program, your points might be worth more toward travel than if you use them for statement credits. If there’s an option to transfer your rewards to travel partners, that could boost your value even more.
In general, a good way to make sure you’re getting a good value for your points is to aim for at least 1 cent per point when you redeem.
Are credit card rewards taxable?
Credit card rewards are generally considered rebates on your spending, so you don’t need to pay taxes on your points, miles, or cash back. However, there are a few exceptions, including referral bonuses and other rewards that don’t require you to spend anything to earn them.
If you’re not sure whether you owe taxes on the rewards you earn, make sure you speak with a tax professional before you file your return.
Read more about credit card rewards and your taxes.
Our methodology
To find the best rewards credit cards available today, we compiled a list of cards from major issuers that earn either cash back, points, or miles rewards. This list is made up of general rewards cards. It does not include credit cards for small business owners, co-branded travel credit cards, and secured or student credit cards.
This allowed us to focus on the most valuable rewards options for the broadest range of cardholders. In total, we compared more than three dozen rewards credit cards for this list.
To compare rewards value, we looked at both how you earn rewards and how you redeem them. The cards with the most flexibility — multiple ways to earn, higher rewards multipliers, different redemption options — were ranked highest. We also evaluated any annual benefits and the value of the card’s welcome bonus compared to its annual fee cost.
We gave additional points to cards with no foreign transaction fees and with 0% APR offers for new purchases. These are valuable benefits no matter what type of rewards card you have. For one, eliminating foreign transaction fees helps guarantee the full value of your rewards when traveling abroad. And a 0% APR offer can add first-year value for new cardholders. You’ll get the option to pay down a large expense — like a vacation booking or a home improvement project — over time while earning rewards.
From there, we evaluated the factors we look for in any credit card. These include each card’s ongoing APR, annual fee, mobile app experience, customer service options, and fraud prevention. The final picks on the list above are the top-ranking cards from this rubric that we believe can add value to anyone’s wallet and spending over the long term.
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
