What Are the Best Credit Cards for Rewards?
Choosing the best credit card for rewards can be challenging given the variety of options available. Users often share their personal experiences and preferences, which can provide valuable insights. Here, we'll explore some of the top credit cards for rewards based on user feedback, covering various categories such as cash back, travel, and specific perks.
Cash Back Rewards
Fidelity VISA
Many users prefer the Fidelity VISA for its unlimited 2% cash back on every purchase, which is automatically deposited into a brokerage account for investment. This card is ideal for those who want a straightforward cash back option without worrying about categories or limits. One user noted that they spend $10-12k a month on their credit card, and prefer the simplicity and consistent rewards of the Fidelity VISA over cards with more complex reward structures.
Bank of America Premium Rewards Elite
The Bank of America Premium Rewards Elite card offers 2.62% cash back on all purchases with no limit. This card comes with a $550 annual fee, offset by $300 in travel credits and $150 in lifestyle credits, making it effectively cost $100 annually. Additional benefits include purchase protections, travel insurance, TSA PreCheck, and access to decent lounges.
Enhanced Rewards with Platinum Honors
With Platinum Honors status, you get a 75% multiplier on the 1.5% cash back, making it 2.625%. There is also 2% on travel and dining, which becomes 3.5% with Platinum Honors. This makes the Premium Rewards card a versatile option for various spending categories, reducing the need to switch between cards frequently.
Bank of America Customized Cash Rewards
Another popular option is the Bank of America Customized Cash Rewards card, which provides 5.25% cash back on the first $2,500 of purchases in selected categories each quarter. Users can set different categories such as online purchases, gasoline, or restaurants, optimizing their cash back across various spending areas. Note that the card provides 3.5% at warehouse stores like Costco, which is still highly competitive compared to other cards like the Costco-branded Citi card.
Combining Multiple Cards
Some users maximize their rewards by combining multiple Bank of America cards. For example, they might use the Premium Rewards card as their default card and supplement it with two Customized Cash Rewards cards set to high-spend categories like online shopping and dining.
Travel Rewards
American Express Gold and Platinum Cards
For those who prioritize travel rewards, the American Express Gold and Platinum cards are common choices. The Amex Gold card offers great rewards for groceries and dining, while the Platinum card provides extensive travel benefits, including access to airport lounges. However, many users are reconsidering the Platinum card due to its high annual fee and diminishing lounge benefits.
Transitioning from Platinum to Gold
Some users recommend applying for the Gold card separately to receive a sign-up bonus, then canceling the Platinum card. It's also suggested to transfer the credit line from the Platinum to the Gold card before cancellation to maintain credit limits and improve credit utilization ratios. However, be aware that Amex has recently implemented family restrictions, preventing users from receiving sign-up bonuses for lower-tier cards if they already hold higher-tier cards in the same family.
Chase Southwest and Sapphire Preferred
Some users have also shared experiences with the Chase Southwest card, which offers a Companion Pass. However, for those who don't travel frequently, the value of this card diminishes. Similarly, the Chase Sapphire Preferred card is praised for its points-earning potential, but some users find it challenging to redeem the points effectively. Despite this, the annual points bonus can still justify the annual fee for some.
Issues with Reward Points Redemption
Challenges with Amex Points
Several users have expressed frustration with redeeming American Express points, particularly for travel. The value of points can be difficult to maximize, often requiring transfers to frequent flier programs. However, availability of rewards flights can be limited, making it challenging to use points effectively.
Preference for Cash Back
Given the complications with redeeming travel points, many users are shifting towards cash back cards, which offer straightforward redemption and guaranteed value. For instance, a 1:1 cash back ratio is often more appealing than points that can be worth less depending on how they're used.
Alternative Reward Systems
Chase Ecosystem
Some users are moving towards the Chase ecosystem, attracted by the combination of hotel and travel benefits. Additionally, setting up a spouse with Hilton cards can yield substantial bonuses and perks, providing value beyond traditional cash back or travel points systems.
Strategic Card Usage
Users also discuss the strategy of using multiple cards within the Bank of America ecosystem to maximize rewards. By leveraging different categories and benefits from each card, users can significantly increase their cash back and other perks. For example, the Bank of America Premium Rewards Elite combined with Customized Cash Rewards cards can cover a broad range of spending categories, ensuring optimal cash back rates.
Conclusion
Finding the best credit card for rewards depends on your spending habits and financial goals. While some users prefer straightforward cash back options like the Fidelity VISA or Bank of America cards, others value the travel perks offered by American Express. However, the complexity of redeeming travel points has led many to favor cash back rewards for their simplicity and reliability. Ultimately, the best card for you will align with your lifestyle and how you plan to use the rewards.
