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When it comes to recommending the best rewards cards available, merely publishing a list is not indicative of our Upgraded Points style. We know that the more information you have, the easier it will be to make an educated decision on the best possible rewards cards for your own situation.
We’re ready to provide all that fundamental card information of course, but we’d also like to step it up a notch and provide a broader view of our featured cards.
That’s why our collection of recommended rewards cards has all have the essential information on earning rewards, redeeming those rewards, and benefits that come with each card, but we’ve added more.
We’ll tell you why we like the card, describe the attributes of a typical cardholder, and then throw in a good value redemption example that might expand your travel imagination as to what is possible.
Remember that you can access our complete list of credit card reviews to research additional options and read what our experts think of those cards.
| Card Name | Best For | Welcome Bonus and Annual Fee | Benefits |
| Chase Sapphire Preferred® Card | Beginners |
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| Capital One Venture Rewards Credit Card | Beginners |
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| The Platinum Card® from American Express | Premium rewards |
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| Chase Sapphire Reserve® | Premium rewards |
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| American Express® Gold Card | Everyday spending |
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| Ink Business Preferred® Credit Card | Business owners that travel |
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| The Business Platinum Card® from American Express | Business owners that travel |
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| American Express® Business Gold Card | Small business owners |
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| Ink Business Cash® Credit Card | Small business owners |
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We frequently recommend the Chase Sapphire Preferred card as a first choice for a rewards card when you’re just starting out.
You’ll find accelerated earnings on travel and dining, flexible redemption options for maximizing the rewards you earn, and a suite of travel benefits you’d normally find on high-annual-fee premium cards.
Developing a financial relationship with a leading financial institution such as Chase early on will reap benefits in the long run.
The ease of earning Chase Ultimate Rewards and their flexible redemption options make Chase Ultimate Rewards one of the most valuable rewards currencies available.
The card provides a foundation of travel and shopping protections and benefits you won’t find on many cards. You’ll receive complimentary primary car rental insurance, trip cancellation and trip interruption coverage, baggage insurance, trip delay coverage, extended warranty, purchase protection, and much more.
The frequent traveler who wants a rewards card with elevated earnings on travel and dining and travel protections they can use might find the Chase Sapphire Preferred card a good match.
The perfect cardholder may also prefer a card that comes with a lower annual fee than premium rewards cards. Lounge access and luxury travel benefits are not important to the ideal cardholder, but being able to redeem points for travel and receive good value is one of their priorities.
Fly from the U.S. to Africa round-trip in business class for just 50,000 miles on South African Airways. You can transfer Chase points points to Virgin Atlantic (1:1 ratio) and redeem Virgin Points for your flight from Washington, D.C. (IAD) to Dakar (DSS).
This is just one of the many ways you can redeem your Ultimate Rewards for great value.
The simplicity of its earning structure and the ease of redeeming rewards makes the Capital One Venture card a worthy choice for the beginner seeking a solid rewards-earning card.
There are no complicated earning structures with the Capital One Venture card — for most purchases you’ll simply receive unlimited 2x earnings.
When it comes time to redeem your miles for travel, your options are many. Transfer your miles to airline and hotel partners and redeem for travel.
The traveler who wants simplified earnings on every purchase, yet access to flexible redemption options, could find the card to be a great fit.
Capital One miles can also be transferred to other Capital One accounts, making it a good card for families and friends to combine miles.
Normally Capital One miles are worth 1 cent each when redeemed for travel at Capital One Travel. However, you can receive greater value by transferring your Capital One miles to airline partners.
For example, you can fly from Tokyo (NRT) to Hong Kong (HKG) in business class on ANA by transferring 30,000 Capital One miles to ANA LifeMiles. This is just one of the many ways you can get maximum value for your Capital One miles.
Proclaimed as one of the best rewards cards in the marketplace, the Amex Platinum card hits a home run with its luxury travel perks, multiple times earning on airfare and hotels, airline statement credits, and its flexible redemption options.
We like the luxury travel perks that come with the card, such as the ability to hang out at prestigious Centurion Lounges and access over 1,400 additional worldwide airport lounge properties.
Having complimentary Hilton and Marriott Gold elite status (upon enrollment) and receiving statement credits for airline incidental fees, Uber Cash, CLEAR, Saks Fifth Avenue, digital entertainment, prepaid hotel stays, Walmart+, Equinox, and Global Entry/TSA PreCheck all add value to having the card.
Find out if you have the credit score required for the Amex Platinum card.
The frequent business traveler who spends a lot on airfare and values premium travel benefits, such as lounge access, hotel elite status, and travel statement credits, will benefit most from having the card.
Anyone currently paying for an annual airport lounge membership will also find the card an excellent value proposition.
Since Etihad Guest is an Amex transfer partner, you can book an enjoyable business class experience for less than 30,000 Membership Rewards points and book a business class flight from Prague (PRG) to Seoul (ICN) on Czech Airlines. That’s over 10 hours in business class for just 30,000 points!
To learn more about how to redeem Membership Rewards for maximum value, you’ll want to reference our in-depth guide.
Hot Tip: Check to see if you’re eligible for a welcome bonus offer of up to 125k (or 150k) points with the Amex Platinum. The current public offer is 80,000 points. (This targeted offer was independently researched and may not be available to all applicants.)
Chase’s premium travel rewards card offers a nice collection of travel benefits, bonus level earnings on the purchases that travelers make most, and redemption options that deliver exceptional value when using your rewards for travel.
We like that the card has unlimited complimentary access for the cardholder plus 2 guests to over 1,300 Priority Pass lounges worldwide. Authorized users also have full Priority Pass Select membership benefits.
Additionally, the $300 travel statement credit that comes with the card can be used for any travel purchase, not just airline incidental fees like other travel rewards cards.
We also appreciate the added value you receive when redeeming Ultimate Rewards for travel. Points redeemed via the Ultimate Rewards travel portal are worth 50% more, plus there’s the additional option of transferring points to airline and hotel partners.
The package of travel protections and benefits offered with the Chase Sapphire Reserve card is genuinely impressive. Having primary car rental insurance, trip cancellation, interruption, and delay coverage, lost/delayed baggage insurance, and emergency evacuation coverage are just some of the useful travel benefits you’ll find complimentary on the card.
The frequent traveler who is currently paying for annual lounge membership or wants to add airport lounge access to their travels will realize significant savings by having the card. Annual lounge membership for a family can cost $1,000 or more.
Those who spend a lot on travel and dining will also find value with the card due to bonus category earnings for those purchases.
Flying in Avianca business class to South America from the U.S. is a great use of Chase Ultimate Rewards. Transfer points to United Airlines at a ratio of 1:1 and book your flights on Avianca using just 70,000 MileagePlus miles for a round-trip journey.
For more ideas on the best use of your Ultimate Rewards points, we’ve put together a great list of options in 1 comprehensive article.
Perhaps your spending habits are more of the everyday variety. If so, you’ll find the Amex Gold card with its bonus-level earnings on U.S. supermarkets and worldwide restaurant purchases an expeditious way to earn lots of rewards.
You’ll still earn big on travel purchases, and when it comes redemption time, there are plenty of options to pay for your trip with rewards points.
Hot Tip: Check to see if you’re eligible for a welcome bonus offer of up to 90,000 points with the Amex Gold card. The current public offer is 60,000 points. (This targeted offer was independently researched and may not be available to all applicants.)
The Amex Gold card strikes a balance between functioning as a travel rewards card and earning as an everyday spending card. You’re earning elevated rewards at restaurants, at U.S. supermarkets (up to $25,000 in purchases per calendar year), and on flights and select Amex Travel purchases. When it comes time to redeem your rewards, you have several flexible options including transferring your points to travel partners.
Anyone who spends a lot at U.S. supermarkets, dining out, and on travel could find the Amex Gold card a potential fit. Everyday expenses will be earning rewards that can easily be redeemed for that annual vacation or a special getaway weekend.
You can book United Polaris transcontinental business class for just 25,000 Avianca LifeMiles after transferring your Membership Rewards points. Plan a special weekend getaway for 2 and spend just 100,000 miles total for round-trip tickets from Newark (EWR) to San Francisco (SFO) or Los Angeles (LAX).
The Ink Business Preferred card offers tremendous value and is certainly one of the best Chase business credit cards. It’s an earning powerhouse for business purchases and delivers elevated value when it’s time to redeem your rewards.
The card is also packed with shopping protections to cover qualifying business purchases and travel protections, along with other benefits that most businesses involving travel can use.
We like that this card functions as a powerful business credit card without a high annual fee. The earning categories alone recognize the most common purchases businesses make, allowing rewards to add up quickly.
Businesses that have high travel expenses will appreciate the 25% additional value when redeeming Ultimate Rewards points for travel.
We also like the package of travel and shopping protection that comes with the card, especially primary car rental insurance, trip cancellation/interruption coverage, and $600 in cell phone protection.
The business owner who is spending $150,000 combined on travel, advertising, shipping, internet, cable, and phone services will maximize the earnings on the card.
Businesses who have high travel expenses will also benefit from having the card as rewards could be redeemed to offset business travel expenses (or used for personal travel).
The ideal cardholder may also find value with additional reward redemption flexibility, offering choices such as cash-back, gift cards, and using rewards for Apple purchases.
Nonstop first class flights on ANA can be booked for as few as 110,000 Virgin Points round-trip from major U.S. hubs to Tokyo. Transfer Ultimate Rewards points to Virgin Atlantic and use Virgin Points to book with ANA.
With a reputation of being one of the best business rewards cards available, the Amex Business Platinum card stands out as a card delivering tremendous value for the business traveler.
This card also comes with fantastic benefits. The excellent 5x earnings on flights and prepaid hotels via Amex Travel plus a 35% rebate on premium cabin airfare or your preselected airline make the card a fine choice for the business with high airfare expenses.
This card also earns 1.5x on eligible purchases in key business categories, as well as on purchases of $5,000 or more everywhere else (up to $2 million in purchases per calendar year).
The lounge access benefit of the Amex Business Platinum card is best in class for a travel rewards card, allowing access for the cardholder and 2 guests to over 1,400 lounges worldwide. Authorized users also receive the same “cardholder plus 2 guests” access.
Hot Tip: Check to see if you’re eligible for a huge welcome bonus offer of up to 170,000 points with the Amex Business Platinum. The current public offer is 120,000 points. (This targeted offer was independently researched and may not be available to all applicants.)
The ideal business cardholder is making large purchases, spending a lot on airline and hotel expenses, and values the benefits of luxury travel perks.
Your business might also be spending money currently on annual lounge memberships for key employees. There may be immediate savings realized by utilizing the complimentary lounge access.
Why fly economy or business class when you can fly round-trip in first class for just 80,000 miles? Transfer Membership Rewards points to Cathay Pacific and redeem Asia Miles to book a Hong Kong (HKG) to Tokyo (TYO) first class experience.
The Amex Business Gold card doesn’t come with a long list of luxury benefits such as lounge access, hotel elite status, or rebates on high-end retail purchases.
The card does focus on what matters most to your small business. And while the card isn’t perfect for every business, those businesses that can use its featured benefits and have expenses that align with the card’s bonus earning categories will find value by having the card.
The card may be a perfect fit for the small business due to its 4x earnings on the 2 highest expenses your business makes in qualifying categories each statement period. Categories include:
The option to pay your statement balance over time could also be useful for small businesses just starting out.
Hot Tip: Check to see if you’re eligible for a huge welcome bonus offer of up to 110,000 points with the Amex Business Gold card! The current public offer is 70,000 points. (This targeted offer was independently researched and may not be available to all applicants.)
The perfect cardholder may also be a small business owner who has little time to worry about complicated earning structures. Your highest qualifying expenses each statement period will automatically receive elevated 4x bonus earnings. There’s no need to preselect bonus categories.
Ever wanted to venture off to Hawaii but thought it was way too expensive? Transferring your Membership Rewards points to the Air France-KLM Flying Blue program will allow you to book a round-trip economy ticket from the U.S. to Hawaii for just 30,000 Flying Blue miles.
The Ink Business Cash card supports your small business operation by concentrating on the cost savings of no annual fee. Additionally, it earns rewards in the form of valuable Ultimate Rewards points that can be redeemed for cash-back and invested back into your business.
And while cost savings are prevalent with the card, it has good earning potential, plenty of redemption choices, and even travel benefits.
We like the bonus earning levels of 5% cash-back on common small business expenses and 2% cash-back on travel and dining. For businesses starting out, having a card with no annual fee is a positive.
We also like that the card earns Ultimate Rewards points that can be redeemed for cash-back and also be transferred to premium Chase cards and redeemed for a greater value (up to 50% more) on travel or transferred to travel partners.
The card also comes with travel and shopping protections such as primary car rental insurance, travel emergency assistance services, roadside dispatch, purchase protection, and extended warranty.
The perfect cardholder is a small business owner who will maximize the 5% cash-back earning categories by spending $25,000 per year on a combination of office supplies and internet/cable/phone services. Since gas station and dining purchases earn 2% cash-back, the business that spends $25,000 in these categories will also maximize earnings with the card.
Planning time away as a small business owner can be challenging and expensive but you don’t have to break the bank when you’re using Ultimate Rewards points to book your travel.
You’ll need a premium Chase card such as the Chase Sapphire Preferred card or Chase Sapphire Reserve card to transfer your points from your Ink Business Cash card. Then you can transfer your points to airline partners to book award tickets.
Transferring Ultimate Rewards points to United Airlines allows you to book round-trip economy Saver-level tickets to Alaska for just 35,000 miles or flights within the lower 48 states for just 25,000 miles.
While we’re not able to give you all the details for each recommended rewards card here, we hope our summaries have helped you understand the cards’ key attributes and spark your interest to learn more.
You’ll want to check out our in-depth reviews for cards that you’re interested in, read the associated pricing disclosures, and understand any card issuer requirements. For Chase cards, for example, you’ll want to reference the Chase 5/24 rule before applying. If you’re applying for a business card, you can learn more about the business card application process.
Also, check out our recommendations for the best business credit cards and the best credit cards for travel.
From picking a card to paying for your items to earning valuable rewards, let’s get back to basics and talk you through just how credit cards work step-by-step.
At a high level, each time you use your credit card, you are borrowing money from your card issuer to pay for something. Your transactions are added together and at the end of each month, you must repay what you borrowed. If you take extra time to pay it back, you’ll be charged interest.
While all credit cards work generally the same way, other features are unique to each card. We’re going to break down all of the things you should look for when choosing your next card.
There are a lot of choices to make when it comes to credit cards. It’s important to know what all of the features of a card are to choose the card that is best for you and your spending habits.
Considering a debit card as well? Check out some of the pros and cons of debit versus credit cards.
The first step to getting a credit card is knowing what cards you are eligible for. This requires knowing your credit score, a 3-digit number lenders use to help them decide how likely it is they’ll be repaid on time. Learn more about credit scores and why they are important!
Everyone is entitled to 1 free credit report every year from each of the 3 big credit bureaus: Equifax, Experian, and TransUnion. You can get this report by going to annualcreditreport.com. Many banks also offer free credit monitoring, as well.
If you have a high credit score, congrats! You will likely be approved for any card you could want — think low interest rates, cash-back or rewards points, travel insurance, or reimbursement for TSA PreCheck or Global Entry!
Bottom Line: At a basic level, the higher your credit score, the more likely you are to qualify for the cards with the best benefits.
If you’re still building (or rebuilding) your credit, you’ll want to look for a card that is specifically meant for this. These cards may require a deposit (known as secured cards) or come with high fees, low credit limits, or high-interest rates to offset a lender’s risk.
Here are the credit score ranges to determine exactly what your score means:
The next important step is to decide on the type of card you want.
Credit card companies offer different kinds of cards to meet their consumers’ needs. For example, some people choose to put all of their monthly expenses on their card and pay it off in full each month. Those people benefit from a card that returns a portion of their spending in the form of cash-back or travel rewards.
Others tend to make minimum payments and carry a balance from month to month. These people benefit from a card that offers a low ongoing interest rate. Still, others are working to build their credit, and cards with lower credit limits are designed for those people.
For this reason, there are a few key decisions to make, so we’re going to give you all of the information so you can decide which is best for you.
As we discussed above, each time you make a purchase on your credit card, you’re borrowing money from a company, and when you make a payment on your balance, you’re paying them back. This company is known as the issuer.
The issuer is the lender that maintains your account from start to finish. You may know the big names like Chase, Capital One, or Wells Fargo, but credit cards are issued by smaller local banks or credit unions as well.
First, the company reviews your credit card application and decides whether you qualify for the card. Next, it will set your interest rate and account fees. At the end of each billing cycle, it will send your statement. You make payments for your purchases directly to the issuer.
Bottom Line: There isn’t one issuer that is “better” than others. Most credit card issuers rank high in terms of customer satisfaction, so the best one is the one that offers you the card that works best for you.
Many of the rewards benefits come directly from the issuer. Things like cash-back, rewards per dollar spent, and statement credits are typically given by the card issuer.
The payment network is responsible for processing credit card transactions. Visa, Mastercard, American Express, and Discover are some of these payment networks. The network will report each transaction to the issuer so that the issuer can both pay the merchant and add the transaction to your outstanding balance.
Hot Tip: American Express and Discover are slightly different because they are both the issuer and the network, so they will approve the transactions themselves. This is why they charge higher fees.
The network determines where you can use your card. You’ll often see signs at retailers noting which cards are accepted and this refers to the network. Most retailers accept Visa and Mastercard, with only a couple of exceptions (such as Costco), while many choose to not accept Discover or American Express.
Network-provided benefits tend to be protections and perks, like travel insurance and rental car coverage. It’s important to note that just because a network has perks on some cards, it’s not guaranteed. It is up to the issuer to decide which benefits each card will have.
Unlike the issuer and network, not all credit cards have co-brand partners. The partner is an airline, hotel, or store whose name appears on the card.
The co-brand partner is responsible for managing the loyalty programs and associated rewards earned on the card. The partner also provides additional perks to cardholders, such as free checked bags for an airline card, automatic room upgrades for a hotel card, or extra discounts for a store card.
This is not the same as transfer partners. For example, Chase Ultimate Rewards transfer to a variety of hotel and airline partners, but these partners are not directly listed on the card and aren’t considered co-brand partners.
Every credit card delivers value through its own unique combination of features. Unfortunately, you’re unlikely to find a single card that offers a high rewards rate, a long 0% APR period, a low ongoing interest rate, generous perks, and no annual fee.
You will have to decide which offers the most value for you, so here are the major categories of credit cards and some of the benefits they provide:
These cards return a portion of your spending in the form of cash-back, points, or miles. Due to the nature of the card, many of these are co-branded cards:
Bottom Line: There are a lot of options when it comes to rewards credit cards. Be sure to look at all of the fees and perks to make sure you’re picking the card that will the best work for you.
Credit cards with 0% interest make them suitable for a big expense (like furniture or appliances). If you don’t make your monthly minimum payment by the due date on your statement each month, it’s possible to lose the introductory purchase APR.
Low-interest cards have a low ongoing rate that makes them a good long-term option. Both of these cards are good for spenders who typically carry debt from month to month.
Different from the 0% interest cards above, these balance transfer cards allow you to move debt from a high-interest card onto a new card and then give you a year or more at 0% interest to pay that debt off.
You’ll often pay a 3% to 5% fee for the transfer, but depending on the balance, the interest savings can still be worth it.
These cards are designed for small-business owners. Their rewards and perks are tailored toward businesses, and they offer extra rewards that businesses typically pay for like internet, office supplies, advertising, or shipping purchases.
Since you would be the one making the payments, the issuer looks at your personal credit history when deciding if you qualify.
Banks have designed cards specifically for people working to improve their credit. Getting one of these cards and using it responsibly can go a long way toward your goals.
The best credit cards for bad credit are secured cards that require you to put down a cash deposit (refunded to you if you upgrade or close the card in good standing). There are “unsecured” cards for bad credit that don’t require a deposit, but they tend to charge high fees.
If you’re building credit, you can also be added as an “authorized user” on someone else’s card. This basically means that someone else is vouching for you (like cosigning on a loan), and it can be a great way to rebuild credit.
Synchrony and Comenity are typically the banks behind retail stores. These cards may offer discounts at the retailer when you use the card. These are typically the easiest cards to qualify for but come with high-interest rates and low credit limits. They may also come with discounts when you spend with the retailer.
Now that you’ve selected the general category of card that works best for you, it’s important to look at the fees and other benefits associated with potential cards. Each card will come with its own set of fees and benefits, so be sure to read the fine print.
First up, let’s look at some of the common fees that you might pay with your credit card.
This is a fee you pay annually for the privilege of carrying a credit card. Annual fees are common on travel reward credit cards that tend to offer the best credit card bonuses and bigger rewards than other credit cards.
To decide whether a card is a good investment, you’ll have to do the math. Based on your spending, would you earn enough in rewards each year for the fee to make sense? Do those other perks like travel credits and lounge access add enough value to you to outweigh the annual fee?
A finance charge is just the interest that accrues on the balance you carry on your credit card. If you pay your balance in full each month, you’ll never pay a penny in interest.
There are a few ways that interest fees can be charged, but the daily average balance is the primary one. Credit card companies will average your balance for every day of the month, then multiply that by the daily rate and the number of days in the billing cycle to determine your interest owed.
Please refer to our complete guide on credit card interest for an in-depth look at this.
A balance transfer fee is charged when you move debt from one credit card to another. After that, the typical fee is 3% to 5% of the amount transferred. Depending on the circumstances, some cards don’t charge a fee for balance transfers.
Many cards offer an introductory rate of 0% interest on balance transfers for a year or more, but you have to decide whether the interest savings will make up for the transfer fee.
When you use your credit card to take out cash (at an ATM or bank), you will be charged a cash advance fee of 2% to 5% of the amount borrowed. You’ll also usually start accruing interest on this cash advance (and at a higher rate than your normal interest rate).
Bottom Line: Avoid taking out cash with your credit card if possible, otherwise you’ll be charged a cash advance fee.
This fee is a charge of 1% to 3% added to purchases made outside the U.S. While many cards charge this fee, most travel credit cards don’t have foreign transaction fees.
Fees can be tacked on each time you swipe, so if you travel internationally, this is an important item to look into.
You can’t overdraft a credit card unless you’ve specifically opted into over-the-limit coverage with your card issuer. Paying for this fee may help you avoid the embarrassment of transactions being rejected at the register. If you don’t opt-in for this fee, your purchase would simply be declined.
The first time you go over your limit, you will usually be charged a fee of up to $25. After that, the fee can go up to $35 if you go over your limit a second time within 6 months.
A late payment fee is charged when you don’t make at least the minimum payment by the due date. The exact amount varies by card.
A returned payment fee is charged when an automatic payment out of your bank account or a check you’ve made out is blocked for insufficient funds. This fee will vary by card, but around $35 is common.
Hot Tip: Be sure to also check out our definitive guide to credit card fees and how to avoid them.
All credit cards charge interest if you carry a balance — that’s just the way they work! The interest that is charged will vary wildly according to the specific card you have qualified for and how long the card has been open.
Credit card companies offer people with good credit a low introductory interest rate. Many cards offer 0% on purchases and balance transfers for a year or more. Some cards don’t go as low as 0% but still offer a lower introductory rate.
After the introductory rate expires, you will pay the ongoing interest rate. The rate will vary by card and individual, but in general, the better your credit, the lower your rate. For super-low ongoing rates, your best bet is a credit union.
If you have a card that has a variable interest rate, your rate may change multiple times a year depending on the Federal Reserve. Credit card issuers aren’t required to notify you when your variable rate is going to change, but some do so voluntarily.
Hot Tip: Remember that if you pay your balance in full every month, your interest rate doesn’t actually matter because you’re never charged interest.
Lastly, if you’ve decided to look at a card that offers rewards, there are a few more things to consider. Your answer to these questions will be subjective and really depend on how you typically spend money.
While specific rewards vary greatly depending on your card, you should look to see if some of these items are included with your card.
By now, you should have decided what card is best for you, so it’s time to apply!
To apply for a credit card, you’ll need to fill out a credit card application through a bank, credit union, or another card issuer. You will provide information like basic information like:
The company will review the application and check your credit score to determine eligibility. You may be approved right away, or it may take the credit card issuer a few days to notify you of your approval.
If your application was rejected, be sure to check out our article on credit reconsideration and what to do next. You will typically receive a written explanation for denial within a few weeks.
Hot Tip: Issuers have individual rules and guidelines when it comes to applying for a credit card. For additional information, see our article: Applying for Credit Cards – The Rules for Each Bank [Limits, Bonus Eligibility & More].
If you’re approved for a credit card, you’ll sign an agreement that obligates you to pay back any money that you borrow. The agreement will also list important information like annual interest rate, credit limit, balance transfer interest rate, and all other fees associated with the card.
A credit limit is the maximum amount you can borrow at any time. For secured cards, the credit limit is usually the amount of your security deposit. On an unsecured card, the issuer will base your credit line on your income, credit scores, and other factors.
Your interest rate is the price you pay for borrowing money, usually noted as an annual percentage rate (APR). If you don’t repay the loan in full each month, you’ll have to start paying interest at this rate on all of the money you carry on your account from month to month.
Bottom Line: You could have a great credit score but still be rejected if you’ve opened too many cards recently or if your debt or recurring payments (like your rent or mortgage) are determined to be too big in relation to your income.
There’s technically no limit to how many credit cards you can have, but individual lenders can decide how many they would like to issue you at 1 time.
Here are some advantages to carrying more than 1 card:
On the negative side, having more cards can make it harder to keep track of your spending and payment due dates. This can lead to an increased risk of interest and other fees and a snowballing of outstanding debt.
Bottom Line: You don’t need to have multiple cards to maintain a good credit score. While credit utilization is important, 1 credit card that is responsibly managed is enough to build a solid credit history.
Once you are approved for a card, it might take a week or so to receive the card. Once you receive it, use the information on the card to call the number or go online to activate your card. After this, you’re ready to start using your card.
At a basic level, each transaction will involve the following steps:
Hot Tip: Your card’s credit limit determines how high your current balance can be at any given time, so you’ll want to pay attention to how much you’re charging to your card throughout the month to avoid maxing out your card.
At the end of each billing cycle, your card issuer will send you a statement that lists your credit card account balance, statement balance, the individual transactions you made that month, the minimum payment due, any fees incurred, and the due date.
Most credit cards give you an interest-free grace period on purchases. The grace period is the time between the end of your billing cycle and your bill’s due date.
Here’s an example of exactly how that works. Let’s say you make a $100 purchase with your card on January 1, the billing cycle closes on January 24, and your payment due date is February 21. The time between the end of the billing cycle (January 24) and the due date (February 21) would be your grace period. During this time, you won’t accrue any interest if this purchase is paid off in full by the due date.
You’ll need to pay at least part of the balance due, called the minimum payment, each billing cycle. You ideally strive to pay off the entire statement balance by the due date to avoid paying interest on your purchases.
Hot Tip: You can set up auto-pay directly from your checking account to ensure your payments are made timely. This will eliminate late payment fees and reduce the likelihood of accruing interest charges.
Many people choose to do this automatically on the due date so that they don’t have to worry about missing or being late for a payment. You can always choose to make additional payments throughout the month if you are close to maxing out your credit limit.
If you only make the minimum payment, you’ll be charged interest on any remaining statement balance at the rate set when you were approved for the card. This can also be called “carrying a balance” on your card as you have a balance from 1 billing period to the next.
This is where many individuals can get into trouble. Those fees start adding up over time and can begin to snowball into a much larger problem. Be sure to read more about credit card interest and how it adds up.
Each month when you receive your statement, you should also check to make sure that all charges on the account are yours.
If you find unauthorized charges on your credit card statement, you should take the following steps:
One of the best benefits of using a credit card is the protection you receive in the case of unauthorized purchases. Many credit cards promise zero liability for all fraudulent transactions.
After you report an unauthorized purchase to your credit card issuer, the charge will be removed from your outstanding balance while it is investigated.
Bottom Line: The important thing is that you have lost no money when a fraudulent transaction occurs on your credit card. You won’t have to make a payment for this transaction, so it will never affect your bank account.
If you have a card that earns rewards or other benefits, it is important to know how they work to make sure that you’re maximizing the value you’re earning from the card.
At a high level, the rewards process works like this:
Hot Tip: Cash-back redemptions are seen as non-taxable as opposed to interest earned at the bank, which is taxed.
Statement credits work a little differently. Basically, a credit is the opposite of a payment since you get money credited back to your account instead of borrowing it to pay for a purchase.
Some cards offer cash-back in the form of statement credits. These would be requested by you whenever you have earned enough points. Other cards offer statement credits for certain categories of spend. For example, it’s very common to see travel credit cards offer automatic credits for a Global Entry or TSA PreCheck application fee.
Other cards, like the Chase Sapphire Reserve card or the Amex Platinum card, offer statement credits for transactions that are categorized as travel. Each card categorizes these expenses differently, so it’s important to read the fine print to determine which purchases will receive credits.
In these cases, you simply make the relevant purchases with the credit card, and then the statement credit should appear on your account.
Statement credits or returns can result in having a negative balance on your card. This means you’ve paid more than you owed. In these instances, you can continue to spend like normal to offset this balance or even request a check from your issuer for the balance.
Bottom Line: While most of these credits are automatic, it is still up to you to make sure that they are being applied to your statement.
It’s a lot of information to digest, but the fundamentals to keep in mind when selecting and managing a rewards credit card are few.
When selecting a rewards card, you’ll want to make sure it matches your spending patterns in order to be rewarded well for the purchases you make most. You’ll also want to spend only what you can afford to pay off each statement period. Carrying a balance incurs interest charges which negate the value of the rewards you’ve earned.
Selecting a card with an annual fee you’re willing to pay is also important. If the card does have an annual fee, it should deliver more value to you personally than the cost of that fee.
And in the end, it’s all about the rewards. The card you select should have redemption options that match your travel goals so that you can experience the ultimate value of having a travel rewards card.
While it may take more than 1 card to reward all of your spending and meet your travel goals, start with 1 and manage it well. Remember, your credit is an asset that can yield great things in the future.
(Sidenote: If you’re interested in some of the “numbers” behind credit cards, see our annual post on credit card statistics and facts where we cover debt, spending, and more).
For rates and fees of The Platinum Card® from American Express, click here.
For rates and fees of the American Express® Gold Card, click here.
For rates and fees of The Business Platinum Card® from American Express, click here.
For rates and fees of the American Express® Business Gold Card, click here.
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Founder and CEO of Upgraded Points, Alex is a leader in the industry and has earned and redeemed millions of points and miles. He frequently discusses the award travel industry with CNBC, Fox Business, The New York Times, and more.
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2 comments
G
December 11, 2021
You should factor rewards / dollar spent, minus the annual fee. The opportunity costs varies dramatically. Sure, you might get 100,000 points if you spend $15k on one of these “elite” cards, but if you can get 80,000 points from spending $4k and the annual fee is only $95 vs $695, you are better off getting the “non-elite” card and spending $11k on another rewards card or a 2% cashback card. Many of the rewards cards above are for businesses that want the value the card offers, suckers who don’t do the math or for vanity purposes. People need to factor in all of the variables. Agree that the Sapphire Preferred is the best on this list, but where is the Citi Premier card? That should be #1. 80k points for only $3k in spend and a $95 annual fee.
Christine Krzyszton
December 13, 2021
Hi G. Thanks for the comment. Agree, it’s important “to factor in all the variables” when selecting a card. If I own a business, spend 10K a month, travel frequently, and value the benefits of a $695 card, that may be the best card for my situation. Perhaps I am currently paying more than $695 for annual lounge access alone and the card offers it complimentary. Obviously, the right card for 1 person may not be for another person. Aside from the welcome bonus and minimum spending requirements, a rewards structure that matches your spending mix is also important for ongoing card value. The Citi Premier card, as you mentioned, is an excellent rewards card if your spending matches the rewards structure. One downside to the card is its lack of travel benefits. However, we do include it as a good option in several articles. Here’s 1 of the most recent, comparing it to the Chase Sapphire Preferred card: /credit-cards/chase-sapphire-preferred-card-vs-citi-premier-card/
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