Comparing Credit Card Reward Programs

September 25, 2013, Written By Natalie Rutledge

An estimated 75% of credit cards have some type of rewards program. Since there are over 1,000 credit cards offered in the United States, finding that ideal rewards program might be a little overwhelming.

How do you go about selecting the best credit card rewards program? We’ll take you through the things you should consider in making this decision.

Common Credit Card Rewards Programs

Before we can start talking about what to look for in a credit card rewards program, we should explain your options. Here is a list of some of the most common rewards and how they work:

  • Cash back: As the name implies, this option allows you to get money back for the transactions you complete with your card. For every dollar you spend, you get a certain percentage back in cash. The typical offer is 1% back on your purchases, but there are some with more lucrative payouts.
  • Airline rewards: Airline rewards offer special discounts for flights and seating upgrades. They also allow you to earn points towards free flights in the future, and they may give you access to special lounges. If you use your card to pay for your flight, many cards will enhance the number of points you earn.
  • Travel rewards: Travel rewards are a little more comprehensive than airline miles. They cover multiple expenses, like hotel rooms, rental cars and cruises. They still offer airline discounts, but they are geared toward the overall travel experience.
  • Gas rewards: Gas rewards help you get cash back when you use your credit card to pay for fuel. They may also give you special discounts at certain gas stations or opportunities to get free fuel after you spend a certain amount of money. If you are on the road a lot, gas rewards could definitely put more money back in your wallet.
  • Business rewards: Business rewards cards are set up to give businesses a chance to earn points for the things they need most. If you have to buy office supplies on a regular basis, you may be able to get a lot out of a card like this. You could save money at office stores and get points for adding extra employee cards to your account. You’ll also have a convenient way to track your expenses.
  • Retail rewards: These rewards are designed to give you discounts and money back when you shop at a certain store. Most of them are store-specific, but there are some that work with a general category of retailers (clothing stores, toy stores, etc.).

Unique Reward Programs

In addition to these common programs, there are rewards for just about any hobby or interest you may have. It could be special offers from your favorite NFL team; NASCAR merchandise; discounts on cookware from Williams-Sonoma; or cash back at home improvement stores.

How to Find the Best Credit Card Rewards Program

When it comes to choosing a rewards program, you need to determine what type of rewards you would like to earn. Then, you should examine how you spend your money. Take out your bank and credit card information and calculate how much you spent during the past year on various categories of expenditures. If you find you’re spending more in certain areas, you should consider a card that maximizes your possible rewards. If you know you need to save money on supplies for your business, you may be able to squeeze a little more out of a business card than you would a cash back card. Look at the overall picture before selecting a card to use.

Keep in mind that you also need to find a card where you are sure to use the rewards. If you’re afraid to fly, don’t get a card that is only going to reward you in airline miles.

On top of all this, you need to look at the fees you may have to pay. Many airline cards charge $95 or more in annual fees. If you will only get $75 worth of rewards from your spending habits, you’ll end up losing money with this kind of card.

If you think you may be carrying a balance from one month to the next–never a good idea for any card, especially a rewards card–then think about the APR you’ll have to pay. Many rewards cards have slightly higher interest rates; that is one way that issuers can afford to pay you the rewards.

Comparing credit card reward programs isn’t easy, but you can do it with the right frame of mind. Consider all of the factors that will influence the benefits you get from your card, and then find the one that is best for you.



The information contained within this article was accurate as of September 25, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at [email protected]

View all posts by Natalie Rutledge