What makes a good credit card? Ideally, most cardholders should look for accounts that have low late payment rates, high credit limits, free membership fees, and fair balance transfer charges, among others. However, one of the most crucial factors to consider is the rewards system.
Depending on the type of rewards your bank offers, you might be able to offset all the interest charges and fees accrued from using your credit card. If you play your cards right, you can even get a discount on all your purchases. You just need to know what rewards plan suits you best.
There are dozens of credit cards available on the market and they offer varying benefits. Seasoned cardholders who know what they’re looking for may find it exciting that they get to choose a customized card matching their lifestyle. However, for first-timers, too many options can be overwhelming. Where do you even start looking?
The best approach here is to go through the top credit cards, gauge their rewards system, and see if you would benefit from them. Here are some choices to help you get started:
Ideal for Daily Drivers: Wells Fargo Propel American Express
The Wells Fargo Propel American Express is a no-annual fee credit card that offers one of the best gas rewards systems for drivers. You earn 3x more points by using this card to pay for gas. For the redemption, note that each point is equivalent to a standard $0.01, which you can use for groceries, charity donations, restaurant bills, or more gas.
For maximum benefits, strive to meet their intro bonus rewards. The Wells Fargo Propel American Express offers 20,000 bonus points to cardholders who spend a total of $1,000 within their first three months. Considering the average American household spends about $250 on gas every month, meeting the minimum spending requirement should be easy for most cardholders.
Ideal for International Food Lovers: American Express Gold
If you love traveling and immersing yourself in international food culture, you should check out the American Express Gold.
It’s a credit card with no foreign transaction fees that offers 4x points when you eat at local or overseas restaurants and shop at local grocery stores. You also get 3x more points if you book your travel tickets through amextravel.com.
For maximum benefits, strive to spend at least $4,000 within opening your account to qualify for the bonus 60,000 intro points. In most cases, each point would be equivalent to $0.01.
Pro Tip: You might want to check out other card options if you don’t eat out too often or travel a lot. The American Express Gold has a steep annual membership fee of $250. You’ll have
Perfect for the Homebody: Blue Cash Preferred Card American Express
Do you like to cook your own meals and spend most of your free time binge-watching various movies and TV programs? You should definitely check out the Blue Cash Preferred Card by American Express.
Their rewards system allows cardholders to get a whopping 6% cash back whenever they use their card on groceries and U.S. streaming services. For example, the average American household spends $4,400 on groceries annually. If they purchase all these expenses using their credit card alone, they can get a $264 cash back—which would more than cover the annual $95 membership fee and extra interest rates.
For maximum benefits, opt to use the Blue Cash Preferred Card by American Express card for daily transit since the rewards system offers a 3% cash back on gas and transportation fees as well.
Best for Frequent Flyers: Capital One Venture Rewards Credit Card
If you love to travel by plane, you should look into getting a Capital One Venture Rewards credit card. It has a low annual fee of $95 and allows cardholders to earn 2x miles whenever they pay with their card.
What sets this rewards system apart from the rest is its simplicity. There’s no need to calculate the cash back percentage or equivalent dollar value of your accumulated points. You get double miles for every qualifying purchase. That’s it. This simplicity also makes it a suitable beginner card for first-time cardholders.
Plus, unlike other travel rewards cards, the Capital One Venture Rewards credit card does not limit cardholders to specific airlines, booking sites, restaurants, or hotels. Feel free to customize your travel plan however you want.
For maximum benefits, strive to spend at least $3,000 using your card within the first three months of opening an account. That way, you can qualify for the extra 60,000 bonus miles.
Perfect for College Students: Discover it Student Chrome
A good option for the average college student would be Discover it Student Chrome. This is a no-annual fee credit card that offers a 2% cash back at gas station and restaurant payments. All other payments made have a 1% cash back.
Apart from the beginner-friendly rewards system, newbie card holders will also appreciate that Discover it Student chrome neither charges an annual membership nor has a high FICO credit score requirement.
Plus, the card doesn’t have foreign transaction fees. Overseas exchange students and vacationing teens can use this card for various purchases without worry about the extra charges.
Although, not that not many overseas stores and restaurants accept Discover cards. Make sure you have at least one backup Visa, Mastercard, or American Express credit card.
Best for Small Businesses and Startups: Capital One Spark Cash for Business
Looking for a card to cover business expenses of your new startup or small business? Try the Capital One Spark Cash for Business. What sets it apart from the rest is its easy, predictable rewards rating. It has a fixed 2% cash back on any type of purchase, the expenses are competitively priced, and you get free membership in the first year.
The only downside here is that the card has an annual fee of $95. However, you can easily offset this fee with cash backs since all purchases made through this card are valid for a 2% return. Ideally, strive to spend $4,750 using the card to break even.
Best for Grocery and Department Store Shopping: Blue Cash Everyday Card from American Express
Do you primarily use your credit card to shop for household essentials? You should consider getting a Blue Cash Everyday Card from American Express. It’s a beginner-friendly shopping card that offers a 3% cash back on groceries and a 2% cash back on U.S. department store purchases. You can also pay for your daily gas with this to get an extra 2% cash back.
Another reason to like the Blue Cash Everyday Card by American Express is it’s simple to use, which makes it one of the best first-time credit cards on this list. The card doesn’t have an annual membership fee and the 0% intro APR can extend for up to 15 months.
Perhaps the only downside is the regular APR ranges from 13.99% to 23.99%. If you have poor credit history, look for other options as you’ll likely get assigned a higher APR for your account.
Best for Dating Couples: Bank of America Premium Rewards
The Bank of America Premium Rewards is the perfect credit card for young dating couples who love collecting points. This rewards system allows cardholders to earn 2 points for every dollar spent on dining bills or travel fares, while all other purchases yield 1.5 points.
What makes their system so cool is there’s no cap on the amount of points you can earn. As long as you keep using your card for various purchases, you can continue earning points that would later convert into real money.
The only downside here is that the Bank of America Premium Rewards credit card has an annual membership fee $95. You can break even and earn back the fee through points once you spend around $5,000 to $7,000 with your card.
Best for Flexible Rewards: Citi Double Cash Card
Seasoned cardholders looking for a flexible, customizable card that offers multiple features can opt for the Citi Double Cash Card. It’s a no-annual fee credit card that has a flexible rewards system. In fact, cardholders get to choose between unlimited cash backs and cash-convertible rewards points.
If you go with cash backs, you’ll get a 2% return on every purchase made. For those who want bonus points, consider linking your card to a ThankYou account so you can convert your regular points into ThankYou Points. Regular points value at $0.01, while ThankYou Points are equivalent to $1.70.
Final Thoughts
There’s no one-size-fits-all credit card plan. Identify your credit card needs, determine what you’ll likely be spending the most money, and find a rewards system that fits your lifestyle.
For example, a frequent traveler might benefit from a credit card that converts points into miles. Alternatively, a student who plans on using their credit card for grocery shopping won’t be able to enjoy this type of rewards system.
Also, we encourage you to go beyond sales agents. They might not be the best source for objective reviews and comparisons since they’ll likely promote their bank’s products. It’s better to surf the net for credit card buyer guides, reviews, and forums.
Which of these credit cards would you consider opening an account with? Share your thoughts with us in the comments section below!
