Comparing Credit Card Rewards

How do I compare different credit card rewards programs?

Looking for the best credit card rewards program for your needs can be like comparing apples to oranges. There are many types of credit card rewards, including cash rewards, miles, airline travel, points, and gift cards.

So where to begin? Start by reviewing your spending habits.

Where are you spending the most?

As you compare credit card rewards options, your best opportunity to earn rewards is in the categories you spend most in. Analyze your spending to see where you can earn sizeable cash back rewards, rebates, discounts, miles, or points.

If you’re looking to score free airline tickets, but your spending habits don’t fit into the earning categories of the travel card you want to apply for, then spending enough to earn those tickets could be difficult.

Likewise, if you drive often or frequently plan cross-country road trips, you might be interested in a gas credit card, like the Discover it® Chrome Gas & Restaurants card. Then, you can earn cash back on your next road trip with 2% cash back at Gas stations and Restaurants on up to $1,000 in combined purchases each quarter.²

You might be interested in a card that gives you cash back as a percentage of your spending at everyday spots. In this case, a typical cash back credit card is your best bet to earn rewards.

There are many different types of credit card rewards programs—once you determine your spending patterns, you can narrow your search to find the best credit card rewards program for you. Ideally, you would choose a rewards program where you earn rewards at places you already spend. Look for credit card rewards programs that allow you to redeem cash, travel, or hotel credit for things you could use—including gift cards to your favorite restaurants, clothing stores, entertainment, and more.

Understand the different types of rewards

Travel miles. With airline or miles credit cards, you can earn miles when you make purchases and then decide the best redemption option. Branded airline and hotel credit cards often only offer redemption options at their specific airline or hotel. Check to see if there are restrictions on travel, blackout dates, or seat restrictions. Many travel miles cards include an expiration date on the credit card rewards.

Points. For example, when you earn points for your purchases, you may earn 1 point for every $1 you spend. Depending on the card issuer, you could be awarded more for eligible purchases in specific categories or with particular merchants. You can usually redeem your rewards later for gift cards and merchandise. With some credit card programs, you can accumulate points towards a rebate or cash off your next car purchase or hotel stay. Be sure to check for an expiration date for when your points must be redeemed and how often you have to use your credit card.

Cash back rewards. With this type of rewards program, you can earn cash back on your purchases and then redeem the cash back you’ve earned for things such as statement credits, direct deposits to a bank account, and gift cards. Like points, you may earn additional cash back on eligible purchases in different places.

Compare credit card rewards with the cost of interest fees and annual fees   

You’ve figured out your top spending categories and decided what type of rewards program you want—but if you don’t have a great credit card offer with a low-interest rate or a no annual fee card, you may not be coming out ahead.

At this point, it’s a good idea to compare the various credit card offers and consider a few questions:

• Is there a low intro APR offer?
• Is there an intro balance transfer offer?
• Will you have a low interest rate after the intro APR expires?
• Does the card charge an annual fee, or is it a no annual fee card?
• What other fees are involved?

Think about the many ways you can earn rewards and the various costs and fees that may be involved. If you’re charged a fee every time you make a same-day payment or lose your rewards if you request a balance transfer, you may not get the best value out of your credit card.

By understanding the different types of credit card rewards programs available, you can find the credit card program that gives you rewards your way—as well as the best terms and interest rate.