August 2023 Best Rewards Credit Cards

August 2023 Best Rewards Credit Cards

The Best Rewards Credit Cards: Get More Bang for Your Buck

Updated as of August 1, 2023.

Are you still using the same old rewards credit card? It might be time to shake things up and discover a better payback on your spending. A recent survey by Bankrate.com found that 43% of credit card holders have either never changed their primary card or haven’t swapped it out in over a decade. With credit card issuers continuously updating their offerings and rewards programs, it’s essential to stay informed.

According to Cyndie Martini, the CEO and founder of card-processing platform Member Access Processing, recent changes in the credit card industry have added more value to everyday spending. Cards now often provide generous cash back, points, or miles to new card members who meet certain requirements, such as making specific purchases or fulfilling spending thresholds in the first few months. Depending on your spending patterns, you could earn hundreds of dollars per year in rewards.

However, rewards cards are not suitable for everyone, especially as interest rates rise. If you carry a balance and incur interest charges, the benefits of the rewards can be diminished by the high interest rates. Ted Rossman, a senior industry analyst at Bankrate.com, advises against paying 20% interest to get 1%, 2%, or even 5% in cash back or airline miles. So, it’s crucial to consider your financial situation and only opt for a rewards card if you can pay off your balance in full each month.

For disciplined spenders, rewards cards can be a lucrative tool. We have curated a selection of the best rewards credit cards in various categories, including flat-rate cash back, no-fee travel, and dining. But before diving into our top picks, let’s talk about our review methodology.

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ANBLE’s Review Methodology

We carefully calculate a typical annual reward for each card based on spending patterns taken from the U.S. Bureau of Labor Statistics Consumer Expenditure Survey. To ensure consistency, we assume an annual spending of $25,000 on the card unless otherwise noted. For cards with an annual fee, we subtract the fee from the cash value of the annual reward. In our evaluations, we also consider factors such as the ease and flexibility of earning and redeeming rewards, club or financial institution memberships required, and other relevant terms. However, it’s important to note that fees, rewards, and terms are subject to change, so it’s always wise to check the current terms with the issuer before applying.

Best for Flat-Rate Cashback

If you’re looking for consistency in your cash back rewards across all spending categories, these cards are the best choice for you. They offer simple yet robust cash back rewards. Here are three of our top picks:

1. Farmers Insurance FCU Cash Back Visa® Signature Card

   • Interest rate: 0% for six months, then 12.99% to 18%.
   • Annual fee: $99, waived the first year.
   • Top rewards rate: 3% back on every purchase for the first year, and 2.5% back on all spending from the second year onwards.
   • Redemption: Rewards are earned as points, valued at a penny each for bank account deposit or statement credit, with a minimum redemption of $50.
   • Membership: Anyone can become a member of Farmers Insurance FCU by joining the American Consumer Council and depositing $5 into a savings account.
   • Sign-up bonus: $100 back if you spend $5,000 in the first three months.

2. Citi® Double Cash Card

   • APR: 0% intro APR on balance transfers for 18 months, then 18.99% to 28.99% variable APR.
   • Annual fee: None.
   • Top rewards rate: 2% back on all spending (1% when you buy, and an additional 1% when you pay).
   • Redemption: Rewards come in the form of Citi ThankYou® points, which can be redeemed for a statement credit, check, or direct deposit into a bank account. Points can also be exchanged for gift cards, travel, or other options through the ThankYou program.
   • Sign-up bonus: Citi recently ended the sign-up bonus.

3. Wells Fargo Active Cash℠ Card

   • Interest rate: 0% on purchases and qualifying balance transfers for 15 months, then 20.24%, 25.24%, or 29.99% variable APR.
   • Annual fee: None.
   • Top rewards rate: 2% cash rewards on purchases.
   • Other benefits: Up to $600 per claim for cell phone protection against damage or theft if you pay your monthly wireless bill with the card.
   • Redemption: Statement credit, cash at the ATM with a Wells Fargo debit/ATM card (in $20 increments), gift cards ($25 increments), or a credit to a qualifying Wells Fargo credit card, checking account, or mortgage.
   • Sign-up bonus: $200 cash reward if you spend $500 in the first three months.

For the complete list of our favorite flat-rate cash back cards, check out our best cash back cards.

Best No Fee Card for Travel Rewards

If you love to travel and want to earn rewards without paying an annual fee, these cards are perfect for you. However, do consider foreign transaction fees if you frequently travel internationally. Here are two of our top picks:

1. Chase Freedom Unlimited®

   • Interest rate: Enjoy 0% intro APR for 15 months on purchases and balance transfers, then a variable APR of 20.24% to 28.99%.
   • Annual fee: None.
   • Foreign transaction fee: 3%.
   • Top rewards rate: Five points per dollar spent on travel reservations made through Chase Ultimate Rewards.
   • Other benefits: Earn 3% at restaurants and drugstores, plus 1.5% on all other purchases.
   • Redemption: Redeem points at a rate of a penny each for cash back, gift cards, or travel.
   • Sign-up bonus: $200 back if you spend $500 on purchases in the first three months from account opening.

2. Capital One VentureOne Rewards Credit Card

   • Interest rate: 0% intro APR for 15 months on purchases and qualifying balance transfers, then 17.24% to 28.24% variable APR.
   • Annual fee: None.
   • Foreign transaction fee: None.
   • Rewards: 1.5 miles per dollar spent on purchases.
   • Sign-up bonus: A match of miles earned after one year, doubling your rewards.
   • Redemption: Miles can cover travel purchases made at any airline, car rental, or hotel within the past 180 days. Miles may also be redeemed for a statement credit to pay your bill.

For more options in the travel category, read our guide to the best travel rewards credit cards.

Best Dining Rewards Cards

If you’re a food lover and tend to dine out frequently, these cards will provide you with cash back and other perks. Here are three of our top picks:

1. American Express® Gold Card

   • Interest rate: Pay over time APR of 21.24% to 29.24%.
   • Annual fee: $250.
   • Foreign transaction fee: None.
   • Rewards: Earn four Membership Rewards points per dollar spent at U.S. restaurants or on take-out and delivery.
   • Additional rewards: Get up to $10 in monthly statement credits for purchases with certain restaurants and delivery services.
   • Experience credit: Access exclusive or early events in music, theater, sports, dining, and fashion.
   • Intro bonus: 60,000 points if you spend $4,000 in the first six months.
   • Redemption: Points can be redeemed for cash back, gift cards, or travel.

2. Capital One SavorOne Cash Rewards Credit Card

   • Interest rate: 0% intro APR for 15 months on purchases and balance transfers, then 19.99% to 29.99% variable APR.
   • Annual fee: None.
   • Foreign transaction fee: None.
   • Rewards: 3% cash back when you dine out, as well as on entertainment, streaming services, and grocery store purchases.
   • Additional rewards: 5% back on hotels and rental cars booked through Capital One Travel.
   • Sign-up bonus: $200 back if you spend $1,000 in the first three months.
   • Redemption: Cash back is redeemable as a statement credit or check, or for travel reservations through Capital One.

3. Bank of America® Customized Cash Rewards credit card

   • Interest rate: 0% intro APR for the first 12 billing cycles on purchases and balance transfers, then 18.24% to 29.24% variable APR.
   • Annual fee: None.
   • Foreign transaction fee: None.
   • Rewards: Four points per dollar spent on restaurant purchases.
   • Additional rewards: Two points per dollar on streaming services, grocery stores, and gas stations. One point per dollar on other spending.
   • Sign-up bonus: 20,000 points if you spend $1,000 in the first 90 days.
   • Redemption: Points can be redeemed for cash back, gift cards, or travel. Cardholders receive a $15 yearly credit after 11 consecutive months of eligible streaming subscription purchases.

For other everyday expenses like gas and groceries, refer to our guide to the best cash back credit cards.

Types of Reward Credit Cards

A rewards credit card provides cash back, points, or miles on your everyday spending. Consider these different types of credit card rewards to determine which one suits you best.

• Cash back credit cards: These cards offer straight cash back on your purchases, usually ranging from 1.5% to 2%. Some cards provide higher rates for specific spending categories. Two percent cash back is considered the gold standard for keeping it simple.

• Points credit cards: With points credit cards, you earn a fixed number of points for each dollar spent, with variations for specific purchases. Points can be redeemed for various options, such as cash back, gift cards, or travel.

• General miles programs: Some travel rewards credit cards, like Capital One, offer miles that can be used to cover travel purchases made at any airline, car rental, or hotel. These cards often provide more flexibility in redeeming rewards.

It’s important to note that the value of points or miles can vary depending on the program and card. General rewards programs offer a specific value for each redemption option, while airline and hotel programs’ values depend on various factors.

How to Earn Credit Card Rewards

To maximize your rewards, take advantage of welcome bonuses offered to new cardholders who meet minimum spending requirements. Additionally, you earn cash back, points, or miles on every purchase made using your rewards credit card.

There are three types of rewards programs:

1. Flat-rate rewards: You earn a consistent rewards rate on all purchases. This is ideal for simplicity and ease of earning.

2. Tiered rewards: Different rewards rates are offered for specific spending categories. If you have significant spending in certain categories, this option can help you earn more rewards.

3. Rotating category rewards: Some cash back credit cards provide bonus rewards that change every few months, allowing you to maximize rewards on a wide range of purchases throughout the year.

What are Points or Miles Worth?

Cash back rewards are easy to understand—the value is straightforward. However, with points and miles, the valuation varies. General rewards programs offer a fixed value for each redemption option, while airline and hotel programs’ values depend on several factors such as travel dates, destination, and more.

Who Should Consider a Rewards Card?

A rewards credit card is a good fit for you if:

• You pay your bill in full each month.
• You have decent credit (typically a FICO credit score of 670 or higher).
• You use your credit card for most purchases.

On the other hand, it might make sense to avoid rewards credit cards if:

• You struggle with overspending and the temptation to spend more to earn rewards could potentially lead to debt.
• You prioritize other card benefits, such as a long 0% APR promotion, over rewards.

Can You Get a Rewards Card with Bad Credit?

It is possible to get a rewards credit card with bad credit. However, there may be some limitations, such as a required security deposit equal to your desired credit limit or higher interest rates. If you have bad credit, using a rewards credit card wisely can help you build a positive credit history and eventually qualify for better rewards cards.

How to Pick a Rewards Credit Card

To select the right rewards credit card for you, consider the following factors:

1. Credit score: Check your credit score and evaluate your approval odds before applying, especially for cards that require good or excellent credit.

2. Spending habits: Look for a card that offers bonus rewards on categories in which you spend the most.

3. Feature preferences: Assess the different features and benefits of credit cards. Decide whether a specific feature, like a long intro 0% APR promotion or extensive travel perks, is essential for you.

Take time to compare multiple credit cards to find the one that best matches your needs and financial goals.

Maximizing Rewards

To earn additional rewards or welcome bonuses, consider applying for cards offered by the same company as your bank. Some credit card issuers allow multiple adult family members to earn the same welcome bonus, boosting your rewards potential. Always read the card terms to understand any limitations or restrictions on bonus offers.

To explore more options, check out our other best buy credit cards:

• Best Cash Back Credit Cards
• Best Travel Credit Cards
• Best Student Credit Cards
• Best Balance Transfer Credit Cards
• Best Business Credit Cards
• Best 0% APR Credit Cards

Remember to review the terms and conditions of each card before applying.

Sources: – Bankrate.com – American Express – Capital One – Chase – Wells Fargo

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