Best Rewards Credit Cards for 2017
Rewards credit cards pay rewards on your credit card spending. You can use these rewards for cash back, a credit to your account, flights, hotel, and a ton of other perks. The best rewards credit cards fall into two categories: travel and cash rewards credit cards. Travel rewards credit cards pay higher rewards on travel purchases and allow the best redemption on travel purchases. Cash rewards credit cards pay cash rewards usually as a statement credit to your account or a deposit into a checking or savings account.
The best rewards credit cards for 2017 were chosen based on the signup bonus, ongoing rewards rate, redemption options, annual fee, and other credit card perks. APRs, including promotional APRs were not a factor since paying in full and avoiding interest completely is the ideal way to capitalize on a rewards credit card.
If you're looking to add a new rewards credit card your wallet this year, check out this list of the best rewards credit cards on the market right now.
Best Cash Rewards Card: American Express Blue Cash Preferred
The American Express Blue Cash Preferred card offers a $150 reward if you spend $1,000 in the first three months of opening your credit card. Ongoing, the card pays 6 percent cash back on supermarket purchases, capped at $6,000 per year. That's $360 cash back in one year if you max out spending in this category alone, which is doable if you spend an average of $500 on groceries each month.
Cardholders will also earn 3 percent cash back at gas stations and select department stores in the United States. There's no limit on the amount of cash back you can earn in the 3 percent category.
All other purchases, including supermarket purchases over $6,000 annually, earn 1 percent cash back.
There are a few exceptions to earning cash back with the Amex Blue Cash Preferred. Grocery store purchases do not include purchases made at superstores and warehouse stores. Gas station purchases do not include gas purchases made at supermarkets, superstores, and warehouse stores. You must make your purchases at true grocery stores and standalone gas stations to earn the higher rewards rate. Otherwise, these purchases will earn the 1 percent reward rate.
Cash back is paid in Blue Cash Reward Dollars in increments of 25 dollars and are available whenever your rewards balance is at least 25 dollars. Rewards can be redeemed as a statement credit that will reduce your outstanding balance by the amount of the redemption.
There's a $95 annual fee which is waived in the first year and can easily be offset if you use the credit card for all your grocery, gas, and department store spending. In the second year and every year thereafter, you have to spend at least $1,600 on groceries each year to break even on the $95 annual fee.
American Express comes with additional benefits like car rental loss and damage insurance, travel accident insurance, roadside assistance, extended warranty, return protection, and purchase protection.
Best 5 percent Cash Back Rewards Card: Chase Freedom
The Chase Freedom Credit Card offers a $150 cash back bonus if you spend $500 on purchases in the first three months of opening your account. There's a catch: you can only earn the signup bonus if you haven't earned a bonus from Chase within the past 24 months. If you already have a Chase credit card, check your past statements or call customer service to find out if and when you last earned a signup bonus.
Chase Freedom cardholders earn 5 percent cash back on purchases in specific categories that rotate each quarter and 1 percent on all other purchases. From January to March 2017, for example, cardholders earn 5 percent cash back on gas stations and local commuter transportation purchases. Cash back at the 5 percent rate is capped at $1,500 each quarter. Once you've reached the threshold purchases will earn 1 percent cash back.
You must activate your 5 percent cash back rewards each quarter to ensure qualified purchases earn the maximum cash back. You might also have to adjust your spending each quarter to max out the 5 percent spending categories.
There's no limit to the rewards you can earn, but you must redeem a minimum of $20 each time. Redemptions can be made as a statement credit, an electronic deposit into an eligible checking or savings account, or for gift cards or other redemption options through Chase Ultimate Rewards.
Chase Freedom has no annual fee which means you can enjoy the perks of the card for free as long as you don't incur any other interest or fees.
Most Flexible Cash Back Credit Card: Capital One Quicksilver Rewards
With the Capital One Quicksilver Rewards card, cardholders earn a $100 bonus after spending $500 on purchases within the first three months of opening the account. Ongoing, purchases earn unlimited 1.5 percent cash back. That means there's no limit on what you can earn and you don't have to adjust your spending to get cash back in certain categories.
Rewards never expire and can be redeemed for cash back at any time and in any amount. There's no annual fee and no foreign transaction fee on the Capital One Quicksilver Rewards card giving you the opportunity to enjoy your rewards without paying any extra cost.
A flat-rate rewards credit card is ideal for customers who spend money in various places, who don't want to pay an annual fee, or who don't want the hassle of trying to keep up with spending categories.
Best for Building or Rebuilding Credit: Discover It Secured
Most rewards credit cards require you to have excellent credit to qualify. Discover has an excellent option for consumers who don't have the best credit score.
Discover it Secured pays 2 percent cash back on up to $1,000 combined grocery and gas purchases and 1 percent cash back on everything else. As a bonus, Discover matches all the cash rewards you earn in the first year your account is open. There's no limit on the cash rewards you can earn and your rewards never expire. You can redeem your rewards for cash (a statement credit) at any time, use your rewards for gift cards in Discover Deals, or even apply your rewards toward purchases on Amazon.com.
There's no annual fee on the Discover it Secured card, but you do have to make a refundable security deposit of at least $200. The deposit is a feature of all secured credit cards and secures the credit limit for cardholders who are otherwise unable to qualify for a credit card.
A perk that will appeal to people trying to rebuild their credit: Discover reports your account activity to the three major credit bureaus. Having the account included in your credit report will help your credit as long as you manage your account well. After you've had your account for seven months, Discover will review your account periodically to see if you qualify for an account that doesn't require a security deposit.
Best Travel Rewards Credit Card: Chase Sapphire Preferred
The Chase Sapphire Preferred credit card has one of the biggest signup bonuses of all rewards credit cards. Cardholders earn 50,000 bonus points after spending $4,000 on purchases within the first three months of account opening. The bonus is worth up to $625 if you redeem your points through Chase Ultimate Rewards, Chase's online rewards redemption tool. Plus, if you add an authorized user and make a purchase in the first three months, you'll earn 5,000 bonus points. The 55,000 point total is worth up to $687.50.
To earn the bonus, you can't have received a bonus from this or another Chase card in the past 24 months.
Ongoing, cardholders earn two points for every dollar spent on dining and travel and one point for every dollar spent on everything else. Rewards points are worth 25 percent more when you redeem them through Chase Ultimate Rewards.
Because Chase Sapphire Preferred is not tied to any airline or hotel brand, you have more flexibility in using your rewards for travel. Plus, Chase will allow you to transfer your points to its partner brands at a 1:1 ratio, which means you'll lose no points in the transfer.
There's no foreign transaction fee which makes it a good card to use while traveling internationally.
The Chase Sapphire Preferred has a $95 annual fee that's waived in the first year. After the first year, you'll need to spend between $3,800 and $7,600 annually to break even on the annual fee. Otherwise, if you're not a big spender, the card may not benefit you beyond year one.
Best No Annual Fee Travel Rewards Credit Card: BankAmericard Travel Rewards Credit Card
The BankAmericard Travel Rewards Card pays 20,000 bonus points after you spend $1,000 in the first 90 days of opening your credit card. The bonus can be redeemed for a $200 statement credit toward travel purchases made with your credit card.
All your purchases earn 1.5 miles per dollar, regardless of the spending category. And, if you have other accounts with Bank of America, you can increase your rewards. Cardholders with an active Bank of America checking or savings account will receive 10 percent customer bonus points on all purchases. Bank of America Preferred Rewards clients receive a 25 to 75 percent bonus increase depending on their benefit level.
There are no blackout dates or restrictions on when you can redeem your rewards. You have freedom to book your travel on any airline or website and can redeem rewards as a statement credit used toward flights, hotels, vacation packages, cruises, rental cars, or baggage fees.
There's no annual fee on the BankAmericard Travel Rewards Credit Card which means you can enjoy these benefits at no cost as long as you pay your balance in full each month and avoid paying interest and fees.
The BankAmericard Travel Rewards Credit Card is a good choice for consumers who aren't big spenders, those who do not want to pay an annual fee, or who spend in a variety of categories.
Best Premium Travel Rewards Credit Card: Chase Sapphire Reserve
Like the Chase Sapphire Preferred, The Chase Sapphire Reserve pays 50,000 bonus points when you spend $4,000 in the first three months of your account opening. The Chase Sapphire Reserve, by comparison, pays 50 percent more on rewards when they're redeemed through Chase Ultimate Rewards, which makes the 50,000 bonus equal to $725 toward travel.The Chase Sapphire Preferred pays only 25 percent more on rewards redeemed through Chase Ultimate Rewards. You can only receive the bonus if you haven't received another bonus from a Chase card in the past 24 months.
(The Sapphire Reserve previously offered 100,000 bonus points, but lowered the signup bonus in January 2017.)
Your purchases will earn 3 points for every dollar spent on travel and dining purchases (versus 2 points with the Chase Sapphire Preferred) and 1 point per dollar on all other purchases.
The rewards are just the beginning of what the Sapphire Reserve has to offer. You'll receive a $300 annual travel credit to automatically reimburse for any travel purchases made to your card.
Chase will give a $100 application fee credit toward an application for Global Entry or TSA PreCheck. Your card gives you complimentary Priority Pass Select membership giving you access to 900+ airport lounges.
Primary cardholders will pay a $450 annual fee and an additional $75 for each authorized user beginning in the first year. The steep annual fee may be a turnoff for some, but this is a premium rewards credit card and the rewards and perks are proportionate to the fee as long as you take advantage of them and use this as your primary card.
Best Co-Branded Retail Credit Card: Amazon Prime Rewards Visa Signature
The Amazon Prime Rewards Visa Signature is a relatively new rewards credit card, launched in early 2017.
Approved cardholders will earn a $70 Amazon.com gift card instantly when the account is approved. There's no minimum spending requirement or waiting period for earning the bonus and you can use the bonus right away.
Ongoing, the Amazon Prime Rewards Visa Signature pays 5 percent cash back on Amazon.com purchases (you'll need an eligible Prime membership); 2 percent at restaurants, gas stations, and drugstores; and 1 percent back on everything else.
Because this is a co-branded credit card, meaning it's sponsored by a retailer and a major credit card network, you can use the card outside of Amazon to maximize your rewards. By comparison, the Amazon.com Store Card can only be used at Amazon.
Once you link your card to your Amazon.com account, you can redeem your rewards at any time in any amount for all or part of your Amazon.com purchases.
The Amazon Prime Rewards Visa Signature comes with several other great perks including no foreign transaction fees, travel accident insurance, lost luggage reimbursement, baggage delay insurance, travel and emergency assistance, purchase protection and extended warranty protection.
The card has no annual fee or foreign transaction fee.
How Should You Pick the Best Rewards Credit Card?
Consider the type of rewards you want to earn, the annual fee you're willing to pay, and your typical spending habits. For example, if you want to primarily earn cash rewards, you're not willing to pay an annual fee, and you don't want to change your spending habits, the Capital One Quicksilver Reward is a great option since it pays a flat rate on all purchases.
You might choose more than one credit card to maximize the rewards you can earn. For instance, if you can spend enough to offset the annual fee, you might use the American Express Blue Cash Cash Preferred for your supermarket and gas purchases and the Chase Sapphire Preferred for travel and dining purchases.
No matter which card you choose, make sure you pay your balance in full and on time each month. Otherwise, carrying a balance means paying interest that offsets your rewards. Paying late adds a late fee to the cost of your credit card and puts you at risk of forfeiting your rewards.
Keep in mind also that balance transfers and cash advances do not earn rewards. These transactions often incur fees and reduce the credit available for making purchases that will earn rewards. It's best to use a rewards credit card solely for making purchases that earn rewards and keep balance transfers for a non-rewards credit card.
Be careful also that you spend only what you can afford. Maintaining your credit and staying out of debt beat earning rewards any day.
Disclaimer: Credit card terms are subject to change. Visit the credit card issuer's website for the most up to date rewards and pricing details.