Everybody should own at least one rewards credit card. But how do you decide which card to get? First of all, choose from one of the top three types of credit cards below.
Not only does a rewards credit card allow you to make interest-free purchases (if you pay off your credit card in full each month), you also get to earn rewards point that can be used for free travel, free lodging, credits towards online shopping, and free cash.
As a rewards credit card user for over 25 years, the best types of rewards credit cards to get are:
Credit Cards To Match Your Lifestyle
Think about how you live your daily life. What do you use credit cards for?
For most of us, we use credit cards when dining out, paying for entertainment, online shopping, gas, and travel.
The key to getting the right types of rewards credit cards is to match your credit cards with your lifestyle.
Cash Back Credit Cards Are #1
I put cash back credit cards are the best to own as #1 because with cash, it's like being the Queen in chess. You have the most flexibility to go in any direction.
You can use cash for any purchase or expense. Every month, you've got a credit card bill to pay. Therefore, you can use your cash rewards as credit to help pay down your credit card bill each month. It's the responsible thing to do.
I put Dining/Entertainment rewards cards second because going out to eat and having fun are the most common uses of a credit card. You want to get a rewards credit card that's in line with your category of greatest use in order to earn the most amount of rewards points. Add up your dining and entertainment costs over the year and I'm sure you'll be surprised by how much you spend.
Finally, I round up my top three with Travel Rewards credit cards. None of us really travel that often for leisure given Americans on average take only 17.2 vacation days a year.
However, when we do travel, flights and other travel-related expenses are expensive. It's nice to get travel rewards points to eliminate or reduce such travel expenses. We should all spend the year building up our travel rewards points in order to travel for free.
The Top Three Types Of Rewards Credit Cards To Own
After reviewing hundreds of different types of rewards credit cards, I've come up with the top rewards credit card to own for each of these three categories:
- Cash Back,
- Dining/Entertainment, and
Best Cash Back Credit Card
Capital One Quicksilver Rewards Credit Card
The Capital One Quicksilver Rewards Credit Card is the best cash back credit card today. Cardholders earn 1.5% cash back on all purchases without any spending caps.
No spending caps is key because many other credit cards will stop accruing rewards points when you spend more than a specified dollar amount in order to limit how much you can earn in cash back rewards.
The average cash back credit card only provides 1% cash back on all purchases. Therefore, the Quicksilver card provides a 50% greater reward.
- Welcome Bonus: $200 cash bonus after spending $500 on purchases within three months
- Rewards Rate: Flat-rate 1.5% cash back on all purchases
- No foreign transaction fees
- Annual Fee: $0
- Introductory 0% APR for the first 15 months
- Credit Score Needed: Good to Excellent
Best Dining/Entertainment Credit Card
Capital One Savor Cash Rewards Credit Card
Capital One is a winner again, partly because they specialize in credit cards. The Capital One SavorOne Rewards Credit Card is a tiered cash back rewards credit card that offers an impressive 3% on dining and entertainment without any spending caps. That's huge and will really add up over time.
My wife and I go out to eat three times a week on average and put everything on our dining and entertainment rewards credit card. Our food budget is roughly $2,000 a month, which means we are able to get a couple free dinners every month thanks to our rewards credit card. We make it a fun date night each time.
- Unlimited 3% cash back on dining and entertainment
- 2% cash back at grocery stores, excluding superstores, with no spending caps
- Unlimited 1% cash back on gas and all other purchases
- Get a $200 cash rewards bonus if you spend $500 in the first 3 months
- No annual fee
Best Travel Rewards Credit Card
Chase Freedom Flex Rewards Credit Card
I've been a happy Chase customer and cardmember for over 10 years. I've traveled to over 40 countries during this time period. And I love using my Chase Freedom Flex Rewards Card to rack up travel rewards.
I've used tens of thousands of rewards to travel and take my wife to Hawaii, our favorite holiday destination in the whole wide world!
Travel is really one of the key joys in life. The more we can travel, the more we will experience and appreciate new cultures and lifestyles. The more we can experience and appreciate new cultures, the more harmony there will be in this world.
I encourage everyone to travel to as many places as possible and learn as many languages as possible.
- Sign up bonus: Earn a generous $200 bonus after you spend $500 on purchases in your first 3 months from account opening.
- High cash back rates on select categories: For example, get 5% cash back on grocery store purchases of up to $12,000 spent in the first year.
- Cash back promotions: 5% cash back on up to $1,500 in purchases in rotating categories each quarter
- 5% cash back on travel purchased in the Chase Ultimate Rewards® portal,
- 3% cash back on eligible dining at restaurants and drugstore purchases.
- 1% unlimited cash back on everything else
- Annual fee: $0
- Intro APR: You get 0% intro APR for 15 months from account opening on purchases.
- Credit score needed: good to excellent
Rewards Credit Cards Are The Best
Owning three rewards credit cards has not only saved me a lot of money, they have also improved the quality of my life.
Every time you use a rewards credit card, you'll feel great knowing that you're getting bonuses that will eventually lead to free travel, free food and entertainment, and free cash.
If you're going to spend money anyway, you might as well put all your spending on one of your rewards credit cards. Always take advantage of credit cards and never let credit cards take advantage of you.
Pay off Your Debt Faster
If you don’t have enough cash, getting a personal loan from Credible is a good place to start.
Personal loan rates have come down significantly in comparison to the average credit card interest rate. Thus, if you have expensive credit card debt, consider consolidating your debt into a lower interest-rate personal loan.
Credible has the most comprehensive marketplace for personal loans. Up to 11 lenders compete for your business to get you the best rate. Get real personal loan quotes in just two minutes after you fill out an application. Check out Credible today and see how much you could save.
For further suggestions on saving money and growing wealth, check out my Top Financial Products page.
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About the Author: Sam worked in investment banking for 13 years at GS and CS. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends most of his time playing tennis and taking care of his family. Financial Samurai was started in 2009 and is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.
Disclosure: Credit card terms and features are subject to change.