Best Rewards Credit Cards for January 2022
If you use a credit card, are you getting paid to use it? If not, getting a rewards credit card just makes sense. It’s a simple and easy way to earn money on all your purchases. However, you want to choose your rewards cards wisely.
How much can you get with rewards credit cards?
Let’s say you spend $500 a month on your card. At 1% cash back, you’ll have an extra $60 in your pocket at the end of the year. Even more rewards can be earned with the right card:
- With 1.5% cash back, you’ll have $90.
- With 5% cash back, you’ll earn $300 for the year.
That’s a big difference in rewards and exactly why it’s so important to find the best rewards credit card for you.
To maximize earnings, you want to find the best rewards credit card for your spending habits.
MoneyRates has compiled a list of cards that are good for general use, gas, groceries, and dining. They were selected based on their earning potential, low fees, and bonus offers, which can award as much as an additional $300 to those who begin using their cards quickly after opening an account. Learn more about the best credit cards for rewards and find your perfect match.
|Best Overall Rewards Credit Card||Purchase Intro/Period||Regular APR||Annual Fee||Credit Score Needed|
Chase Freedom Unlimited®
|Intro APR: 0% Period: 15 months||14.99% - 23.74% Variable||$0||Excellent, Good|
American Express Cash Magnet® Card;
(This card is not currently available on CardRatings)
|Intro APR: 0% Period: first 15 months||13.99% - 23.99% Variable||$0||Good, Excellent|
Chase Freedom Unlimited®
The Basics: With Chase Freedom Unlimited®, you earn at least 1.5% cash back on every purchase. Additionally, new cardholders earn an extra 1.5% cash back on every purchase (up to $20,000 spent) during your first year, which is worth $300 cash back.
Don’t forget that the card has a 0% intro APR for the first 15 months on purchases and balance transfers (then, 14.99% - 23.74% Variable).
Cash back can be redeemed in multiple ways, including direct deposit and statement credits. You can also use your rewards for travel and gift cards.
Pro Tip: Although not a formally published policy, Chase is known for having a 5/24 rule. It means the bank typically doesn’t approve card applications from those who have opened five or more personal credit cards in the previous 24 months.
So if you’re planning to apply for multiple cards, start with the Chase Freedom Unlimited®. That way your other applications don’t affect your ability to be approved for the card.
American Express Cash Magnet® Card
The Basics: We like the American Express Cash Magnet® Card /credit-card/best-rewards-credit-cards.htm for the fact that the annual fee is $0 and you can get 1.5% cash back on your eligible purchases.
While its welcome offer isn’t quite as good as the cards listed above, it does come with some other added benefits. For instance, you’ll get free two-day shipping through ShopRunner and access to a global assist hotline.
Cash back can be redeemed for statement credits, gift cards, and merchandise.
Best Rewards Credit Card for Groceries – Blue Cash Preferred® Card from American Express
Groceries are a major expense for U.S. households. However, you can save money by using a rewards credit card that provides extra cash back for purchases at supermarkets. You can further increase your savings by combining your credit card with coupons and store loyalty program discounts.
The clear winner in this category is the Blue Cash Preferred® Card from American Express with its 6% cash back on up to $6,000 spent annually at U.S. supermarkets.
Be aware, though, that purchases at Walmart and Target do not qualify as supermarket spending for these and other card issuers.
|Best Credit Card for Groceries Rewards||Groceries Rewards Rate||Regular APR||Annual Fee||Credit Score Needed|
Blue Cash Preferred® Card from American Express; See Rates and Fees; terms apply
|See rewards description below||13.99% - 23.99% Variable||$0 introductory annual fee for the first year, then $95.||Good, Excellent|
Blue Cash Everyday® Card from American Express; See Rates and Fees; terms apply
|See rewards rate below||13.99% - 23.99% Variable||$0||Good, Excellent|
Blue Cash Preferred® Card from American Express
The Basics: If you spend at least $150 a month on groceries, you can easily make back the annual fee for the Blue Cash Preferred® Card from American Express. And if you spend $6,000 annually at U.S. supermarkets — which would max out the 6% cash back offered in the category — you’ll wind up with an extra $360 in your pocket at the end of the year.
You can also get 6% cash back on streaming services and 3% cash back on transit and gas purchases. Then it’s 1% cash back on your other eligible purchases.
On top of all that, you can earn a $300 statement credit after you spend $3,000 in purchases on your new card within the first six months.
Blue Cash Everyday® Card from American Express
The Basics: The Blue Cash Everyday® Card from American Express is another card offering extra cash back for U.S. supermarket purchases. You’ll earn 3% cash back on up to $6,000 spent each year at U.S. supermarkets. There is no annual fee, and if you need another reason to apply, check out the generous welcome offer: Earn a $200 statement credit after spending $2,000 on purchases on your new card within the first six months.
|Best Credit Card for Gas Rewards||Gas Rewards Rate||Regular APR||Annual Fee||Credit Score Needed|
|Best Business Credit Card for Gas Rewards||Gas Rewards Rate||Regular APR||Annual Fee||Credit Score Needed|
Ink Business Cash® Credit Card
|See rewards rate below||13.24% - 19.24% variable||$0||Excellent, Good|
American Express Blue Business Cash™ Card; See Rates and Fees; terms apply
|See rewards rate below||13.24% - 19.24% Variable||No annual fee||Good, Excellent|
Ink Business Cash® Credit Card
The Basics: The Ink Business Cash® Credit Card offers lucrative rewards in business categories.
When it comes to fuel purchases, cardholders can receive 2% cash back on up to $25,000 combined spending each calendar year at gas stations and restaurants. There is no annual fee for the card, and it comes with additional perks such as free employee cards.
Rewards can be redeemed for cash back, gift cards, and travel through Chase Ultimate Rewards®.
American Express Blue Business Cash™ Card
The Basics: For simplicity, select the American Express Blue Business Cash™ Card.
It lets you earn 2% cash back on up to $50,000 spent each calendar year, then 1%
The card gives eligible business owners expanded buying power to spend beyond their credit limit if needed (it isn’t unlimited and will adjust based on your card use, payment history, and other factors), and there is an intro 0% APR on purchases for the first 12 months from account opening (then, 13.24% - 19.24% Variable). It also offers a $250 statement credit when you spend $3,000 in the first three months.
Pro Tip: If you’re self-employed or work in the gig economy, you may be eligible to open a business credit card.
How Do Rewards Credit Cards Work?
To make the most of your rewards credit cards you need to understand the following aspect of them:
- The type of card you have.
- Rates and fees charged by the card.
- Earning opportunities and limits.
- Redemption rules.
Below, you’ll learn what this all means and how to apply this information to your own card usage.
Types of rewards credit cards
Rewards credit cards typically fall into one of two broad categories:
Cash-back credit cards
Cash-back cards may offer a flat percentage of cash back for every purchase or have tiers in which some purchases earn a higher level of cash back than others.
Some cards also have bonus categories that either rotate quarterly or allow cardholders to decide which purchases earn a higher cash back reward.
Travel credit cards
The best credit card for travel rewards may be general purpose and earn points or miles for a program such as Chase Ultimate Rewards or American Express Membership Rewards.
These programs allow cardholders great flexibility in redeeming for travel. Other hotel and airline cards earn rewards for a specific company’s loyalty program, such as Hilton Honors or Delta SkyMiles.
Some of the best travel rewards credit cards on this list are cash-back cards. That’s because cash back cards typically offer the most flexibility both in earning and redemption. After all, cash can be used for anything. However, if you travel frequently, you may get greater value from a specific airline or hotel travel card.
Rewards credit card rates and fees
The rewards you earn with a credit card can be quickly wiped out by the fees charged by your credit card company. Check to see what the charges are for the following fees before applying for rewards credit cards:
- Annual fees.
- Balance transfer fees.
- Foreign transaction fees.
You should also check the interest rate. While some cards, such as the Chase Freedom Unlimited®, have introductory 0% APRs, it is more common for rewards credit cards to charge higher interest rates than those found on non-reward cards.
Earning opportunities and limits
Next, you need to consider how you can earn the most rewards possible with a card and if there are any limits on what you can receive. Most credit card companies make it easy to see how much cash back, points, or miles you can earn. Limitations can be a little trickier to find.
Scan the fine print for the following restrictions:
- Caps on how much you can earn.
- Minimum requirements for redemptions.
- Expiration dates for rewards.
Rewards credit card redemptions
Finally, you want to make sure you are able to access your rewards in a way that makes sense for you. Some cards only redeem cash back as statement credits, but most offer several of the following options:
- Statement credit
- Automatic deposit to a bank account
- Withdrawal from ATM
- Paper check
- Gift cards
- Redemption on shopping sites such as Amazon
Most cash back cards redeem your rewards on a dollar-for-dollar basis. Points and miles may have a more variable value.
Smart Strategies: The Fastest Route to Rewards
Once you know the ins and outs of how cards are structured, it’s time to select the best rewards credit card for you and start earning rewards. Use the following steps to quickly maximize your cash back, miles, or points.
1. Plan to use more than one card
To earn the most rewards possible, you’ll need several credit cards.
Everyone should have a good all-purpose card such as the Chase Freedom Unlimited®.
Look for cards that match your major spending categories. For instance, if you have a business, you might also want the Ink Business Cash® Credit Card.
2. Maximize welcome offers
You get the most bang for your buck, so to speak, with welcome offers.
These sign-on bonuses offered by credit card companies provide hundreds of dollars or tens of thousands of points or miles to new customers. The catch is that you need to spend a certain amount of money within a specified period, often three months.
To maximize a welcome offer, be sure you can comfortably meet the spending requirement on a card before applying. If you can’t, move on to another card or see if you have any big expenses coming up that could help you meet the requirement in the future.
3. Label each card
An easy way to be sure you’re using the best rewards credit card for each purchase is to label them in advance. Affix a sticker or write on the card to indicate how you plan to use it. For instance, you may write “groceries” on your Blue Cash Preferred® Card from American Express and “gas” on your Wells Fargo Propel American Express® card
4. Use rewards cards to pay regular bills
Check with your utility providers, trash service, lenders, and other billers to see if they accept credit card payments. If so, use your rewards credit cards to pay your bills and then pay off the credit card with money from your bank account.
However, be aware that some companies assess a surcharge for credit card payments. In that case, you’ll have to calculate whether the rewards you’ll receive outweigh the costs.
5. Have back-up cards for major categories
If you spend a lot in certain categories, it only makes sense to have a backup card if there are spending limits.
You’re most likely to encounter this with the best cash back cards for groceries. For instance, you get 6% cash back at U.S. supermarkets for the first $6,000 you spend in a year on your Blue Cash Preferred® Card from American Express (then 1% after hitting the cap).
After that, it’s best to switch to a card such as the Blue Cash Everyday® Card from American Express, so you can earn 3% cash back on $6,000 spent at U.S. supermarkets in a year (the, 1%) spend.
6. Don’t carry a balance
One of the worst things you can do with a rewards credit card is to carry a balance. Many of these cards have higher APRs, and the interest you’ll pay on a balance will quickly erase any rewards you earn.
7. Downgrade unused cards with annual fees
You may find at some point you end up with a card that isn’t as valuable or useful as expected. If it has no annual fee, you can simply discontinue using it. However, you don’t want to pay an annual fee for a card you aren’t using. Still, canceling that card could have an impact on your credit score by increasing your debt utilization ratio.
What Credit Score Do You Need for the Best Rewards Credit Cards?
Generally, a good credit score is around 700 or above, though the credit reporting company Equifax considers anything about 670 to be good credit. Most of the best credit cards for rewards are aimed at applicants with credit scores at or above 700.
If your credit score is lower than 700, take some time to improve your credit before applying, especially if you want one of the best rewards credit cards. This can be done by making timely payments and reducing your debt.
Because credit card terms and rules change frequently, and everyone has different priorities when it comes to what the best rewards credit card is for them, your perfect rewards card may be another card we haven’t covered. However, we analyzed rewards cards that we felt would be most beneficial to the widest assortment of people.
To rank cards, we weighted them based on the following factors and in this order:
- Percentage of cash back offered
- Value of welcome bonus
- Cost of annual fee
- Other card perks and benefits
To see the rates and fees of the American Express cards mentioned in this post, please visit the following links: American Express Cash Magnet® Card ( ); Blue Cash Preferred® Card from American Express (See Rates and Fees; terms apply); Blue Cash Everyday® Card from American Express (See Rates and Fees; terms apply); American Express Blue Business Cash™ Card (See Rates and Fees; terms apply )