Why Savvy Shoppers Swear by These Credit Card Rewards

In a high-interest rate environment, like now, credit cards can quickly become less desirable financial tools. But, like any tool, their usefulness is all in how you use them. And the rewards offered by some credit cards nowadays can certainly be worth your while, provided you use them responsibly.

Here are three key perks to keep an eye out for.

Perk 1: Cash back

Cash back is the bread and butter for many rewards-card holders because it functions exactly like it sounds: You spend money on things you were already planning to buy, and then you get a percentage of that money back. Think of it as always getting a discount code on your expenses as a reward for your credit.

Let's say you spend $2,500 on your credit card each month on various expenses. If you have the Citi Double Cash® Card, you'd get 2% cash back on every purchase (1% when you buy, and 1% when you pay), so that would save you $50 per month. That may not sound like a lot, but it can add up over time. Depending on the card, you may be able to use that money to make more purchases, or you may be able to use the cash back to pay toward your card balance.

Some cards also offer different levels of cash back for different types of purchases, which can mean more savings. It can get a bit tedious to manage, especially if you're required to activate those rewards. But you may be able to score up to 5% cash back on certain purchases in bonus categories, which is usually worth the extra clicks. For instance, if you have the Discover it® Cash Back (see rates and fees), you could get 5% back on grocery purchases during a quarter of the year. So a $500 grocery budget would translate to $25 in savings on that purchase alone. (Keep in mind that the 5% categories for this card rotate quarterly, must be activated, and are subject to a spending limit. Everything outside of that chosen category would earn 1% cash back.)

Perk 2: Sign-up bonuses

Credit card companies want your business, and if you qualify, you may be able to score sign-up bonuses, like a flat $200 cash rewards welcome bonus after spending $500 in the first three months -- as is the case for the Wells Fargo Active Cash® Card, as of writing (see rates and fees).

Your bonus might be thousands of points with the issuer's system -- like the whopping 80,000 Membership Rewards® Points membership-rewards point offer for The Platinum Card® from American Express (terms apply, see rates and fees). The actual value of any points you'd get will vary by company. For example, one company may offer $0.01 per redeemed point, while another may provide $0.007 per point. In those cases, a 50,000 point sign-up bonus would translate to $500 or $350, respectively. So you'll need to look into the actual value of any bonus to ensure it's worth opening a new credit card account.

Keep in mind that these usually require you to charge a certain amount within a given time frame (like the first three to six months of card ownership). So it's vital that you ensure you can pay off what you charge each month, but also that you'll be able to meet that charge requirement.

It should be an amount that you're already planning to spend. That way, you wouldn't be straining your budget or paying interest to access this perk. You also need to have a game plan for how you'll use any points since some companies may provide more value for certain types of point-redemption options than others. And make sure that any annual fee (even if it's waived for the first year) is going to be worth having the card based on your spending habits and the typical rewards system it offers.

Perk 3: Travel points

Picture it: You're spending money like you usually do, and at the same time, you're earning that plane ticket to your ideal travel destination. That's the promise behind travel-focused rewards cards, and if you play your cards right, it can actually be a reality. The key is understanding exactly how your credit card company travel points work. Like other points systems, the value of your points can vary widely. And while some cards may spell the terms out clearly -- the Capital One Venture Rewards Credit Card )(see rates and fees) provides 1.25 miles per dollar on each purchase, and 5 miles per dollar for hotels and rental cars specifically booked through Capital One Travel, for example -- others may be harder to parse.

You may find that you have to book with certain partner hotels to get the most value out of those points. Or you may be able to transfer them to an airline rewards system, where they may be more or less valuable. Layering on other perks from the card may also increase the effectiveness of your travel points. For example, some cards may offer benefits like free upgrades, access to airport lounges, or a credit for TSA PreCheck enrollment fees. If you book using points, those extras can increase the value of those points, while making your travels more comfortable and enjoyable.

It can take a bit of research to really take advantage of these perks, and it may take time for those to accumulate. But if you put in the effort, it can translate to heavily discounted -- or even free -- travel.

Ultimately, the best credit card rewards are going to be the ones that you actually use. So it's worth doing a bit of research to figure out what's required to start benefiting from these reward options, that way you'll know if the card you choose is worth the effort.