A cashback rewards credit card can be a great way to get a little extra back when you make purchases.
However, with so many reward cards on the market, it can be tricky to pick a cash-back rewards credit card that suits your preferences and needs. So, here we’ll explore how to choose the right card for you.
What’s Your Preferred Reward Option?
While you may be interested in cash-back credit cards, this may not be the best reward option for you. Many cash back cards offer a percentage back on your spending. However, other cards offer points that you can convert into dollars.
Although a percentage of cashback may appeal, it does limit what you can do with your rewards. You may actually prefer the flexibility of earning points. You can then redeem your points for cash or other rewards.
Is There a New Cardholder Bonus?
Many credit card issuers offer a one-time bonus for new cardholders.
While this shouldn’t be the main deciding factor, it can provide nice rewards boost. You will need to check the qualification criteria to ensure that you can comfortably meet the minimum spend.
This should be something you can achieve with your typical spending patterns, otherwise, it may not be worth it.
Do bear in mind that you should look at the other card benefits to ensure that the new cardholder bonus is attractive. In some cases, you may find that a card without a signup bonus is a better deal for you.
What Are the Card Fees?
Since reward credit cards offer a lot of value, they typically have an annual fee and other charges.
Some cards even charge a fee each time you redeem your rewards. You should ensure that you read through the card terms and conditions before you apply to ensure that the fees don’t make the card costly.
Bear in mind that any fees, including the annual fee, will need to be offset by the rewards you earn. So, if the card has a $250 annual fee, you will need to be able to earn at least $250 in rewards each year with your typical spending patterns.
In some cases, you may find that a card that offers a lower reward rate but also has a lower annual fee could actually be a better deal for you.
You also need to consider how complex the rewards structure for the card is. If the card has generous bonus categories but you need to select categories each month or track how much you’ve spent, you may find it far more hassle compared to a flat rate card.
If the cashback tiers of the card are so complicated that you won’t use the card, it is not the right choice for you.
The primary benefit of a cash-back rewards credit card is that it should be simple to use, so you need to check that you would feel comfortable with the reward structure.
Consider What You Spend Money On
The first step to picking cash back rewards credit card is to think about where you typically spend money on an average month. If you spend a lot of time on the roads, a card that prioritizes gas station purchases will be a good choice.
If your largest expense is groceries, this should be your focus. However, if your spending doesn’t follow a typical pattern, you may prefer a card that offers a high level of cashback in multiple categories.
For example, the Amex Gold Credit Card offers 4 points per dollar on dining and groceries, 3x on flights, and 1x on all other purchases.
There are a number of cards that have a tiered reward structure and you can earn a high reward rate on multiple categories. In some cases, there are several reward tiers that can help you to maximize your rewards.
There are many Amex users who claim the Gold card is even more lucrative than the Platinum card.
A good example of this is the Chase Sapphire Preferred. You can earn 5x rewards on travel, 3x points on dining, food delivery, online grocery purchases, and select streaming services.
There are 1x points on all other purchases. While this is weighted towards travel through the Chase portal, you can still earn generous rewards on many everyday purchases.
Other Card Perks
You should also look at whether the card has other perks that will make it attractive for you. Some cards offer reimbursement for streaming services, free insurance, and other benefits that will provide additional value for you.
While travel reward cards tend to be a little more complex, there are some cash-back reward credit cards that also have some nice travel perks. This means that you can earn rewards on your everyday spending and when you travel.
So, look at the full benefits of each card to allow an accurate comparison.
Finally, be sure to consider the credit card issuer’s reputation.
Some credit card companies have a better reputation for customer support compared to others. If you prefer to manage your accounts online or on your mobile device, it is a good idea to check the reviews of the platforms.
If you prefer to speak to an agent if you have any queries, check that the issuer has phone support outside of standard business hours.
With hundreds of reward credit cards around, it can be a bit of a chore to compare cards and check which ones represent the best deal for your typical spending patterns and habits.
While it may take a little time to compare shops, it could help you to find a card that offers good value in terms of rewards and fees.
By comparing the key factors above, you can narrow down your options, so you can make an informed decision about which cash back rewards credit card you should pick.