by Christy Bieber | Updated July 21, 2021 - First published on Oct. 6, 2019
Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Not all credit card rewards programs are created equal. When comparing rewards programs, be sure to pay attention to these details.
One of the biggest benefits of using credit cards is all the possible rewards that you can earn. If you're smart about the card you pick, you can earn hundreds or even thousands of dollars in cash back, free travel, or other rewards.
With so many great credit card rewards programs out there, it's worth the effort to research your options and compare what different card issuers are offering you. As you check out rewards programs, though, it's important to read the fine print to make sure a deal is really as good as it seems.
So what should you look for when comparing credit card rewards? Here are six key things you'll want to check out before determining that a particular card's rewards program is the right one for you.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Credit cards often feature generous perks such as free companion airline tickets or hotel nights. But while you sometimes get these perks just for being a card member, in other situations you don't unlock the best cardholder benefits until you hit certain spending thresholds.
If there's a spending minimum to gain access to any of your card's special features -- or to qualify for a sign-up bonus available to new cardmembers -- make sure you know what that minimum is. If you don't spend anywhere near that much on your card, you'll know up front that the advertised benefit isn't actually one you'll be able to enjoy.
Many cards offer seemingly generous cash back or bonus points, such as 5% back on groceries or 3% on purchases in a category of your choosing. But when you look closely at the details, the bonus only applies to a very small amount of spending, such as $2,500 per quarter or $6,000 per year. Once you hit that limit, you'll get a much smaller reward that's usually around 1% or less.
If you often spend more than the maximum you can get the bonus points on, the card may not be nearly as great as it seems at first glance. You might actually be able to get much better rewards on a different card that doesn't relegate you to getting only 1% back on the bulk of the spending you do.
It's common for credit cards to rotate the bonus categories where you get extra points or cash back. And this isn't necessarily a bad thing -- unless of course you don't often spend in the majority of the categories.
Don't be fooled by a card that promises 5% back on groceries if you only get this bonus spending for one quarter of the year once every year or two. Unless you regularly spend in multiple categories where you can earn extra rewards, you may be far better off with a different card that doesn't make you keep a calendar to figure out when to shop for different items.
There's another hoop you may have to jump through to maximize your rewards, in addition to keeping track of rotating bonus categories. Some cards actually require you to call or sign into your online account just to activate bonus points or cash back. This can be a big hassle and if you forget to do it, you may get a paltry 1% or less back on purchases.
If you don't want to be bothered reaching out to your credit card company to ask for the rewards you were promised once every quarter, you may want to forego cards that require you to take this extra step.
Credit cards with expiring rewards may be one of the worst deals of all. If you can't accrue enough points to redeem before your existing points expire, you won't be able to take advantage of the rewards you've earned. Or you may forget to redeem before the expiration hits, leaving you with nothing to show for your spending.
Unless you're 100% confident you'll be able to actually make use of the rewards before the card issuer takes them away, look for a different credit card that lets you redeem your points or cash back at any time as long as you remain a cardholder.
There are some cards that allow you to only redeem points at select times of the year or require you to accrue tons of points before you can actually use them for anything. Others charge you fees for redemption or impose major restrictions such as blackout dates on when you can use miles or book the free hotel nights you've earned.
If card reward programs are too hard to use, chances are you won't end up taking advantage of the rewards you earn. Opt out of these cards and look for a different ones with rewards that are actually simple and quick to redeem.
The last thing you want to do is pick a substandard credit card with a poor rewards program just because you didn't read the fine print. By watching out for these red flags in the cardholder agreement, you can make sure you get a rewards credit card that's actually all it's advertised to be.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.