The 6 Best Credit Cards For Rewards In 2016

in Financial Planning by

KEY POINTS
  • What kind of card do you need? We break it down for you.
  • Win on international flights or business transactions day-in and day-out.
  • Remember to consider your consumer debt before chasing one of these awesome cards.

If you’re managing your investments and tracking your spending with Personal Capital, you already know how important keeping a close eye on your personal budget can be. As we all know, life’s little expenses tend to add up in a big way over time, often leaving insufficient resources behind to grow a nest egg for the future.

Of course, the most resourceful, affluent individuals think outside of the box when it comes to maximizing the money they earn – and that can mean putting tools like credit card rewards to use. With good credit and bit of ingenuity, you can rack up rewards to pay for anything from international travel, to cash-back that covers a splurge every once in a while.

As someone who travels constantly and writes about credit cards for a living, I’m intimately familiar with the rewards game. Just like tracking your net worth and spending is important, utilizing your resources – including access to credit – is a smart move too.

Top Rewards Credit Cards 2016

With so many rewards credit cards on the market, a list of the best ones will constantly be changing. Yet, some cards stand the test of time in gaining market share and earning consumer recognition year after year.

From best cash-back card to top hotel rewards card, check out a few of our favorite rewards credit cards for 2015:

Best All-Around Rewards Card

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card consistently ranks as the top rewards card with sites like The Simple Dollar, NerdWallet, and Credit Karma. It offers some of the most flexible rewards points on the market, plus plenty of perks that make using it worthwhile.

In addition to a healthy sign-up bonus (currently 40,000 points after you spend $4,000 within 90 days) it allows for quick point accrual with a flat 1 point per dollar spent on all purchases, plus 2 points per dollar spent on travel and dining at restaurants. But, how can you use those points? Several options exist: Redeem them for travel through the Chase Ultimate Rewards travel portal for a 20% discount, transfer them to a slew of hotel and airline loyalty programs at a 1:1 ratio, or cash them in for a statement credit, gift cards, or merchandise.

Best Business Credit Card

Ink Plus® Business Credit Card

Similar to the Chase Sapphire Preferred® Card, the Ink Plus® Business Credit Card is also part of the Chase Ultimate Rewards program. With a heftier sign-up bonus (currently 50,000 points after you spend $5,000 within 90 days), however, this card offers a slightly bigger bang for your buck.

With this card, you earn 5 points per dollar on the first $50,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet, and cable TV services each account anniversary year. Meanwhile, you earn 2 points per dollar on the first $50,000 spent in combined purchases at gas stations and hotel accommodations when purchased directly with the hotel each account anniversary year. Since you’re earning Ultimate Rewards points, you can use them to book travel through the bank’s travel portal, transfer them to a number of popular partners, or redeem them for cash back, gift cards, or merchandise.

Best Cash-Back Credit Card

Chase Freedom®

Consistently ranked as one of the best cash-back cards is the Chase Freedom® card. This card offers a wealth of consumer friendly benefits and the opportunity to earn as much as 5 points per dollar spent on categories that rotate every quarter, plus 1 point per dollar spent on all purchases. For 2015, you’ll earn 5 points per dollar spent at gas stations and Kohl’s from July – September. For October – December, purchases made through Amazon.com will qualify for 5% cash back.

If you have just the Chase Freedom® card, you can redeem your points in a number of ways, including cash-back, statement credits, gift cards, or merchandise. If you pair this card with a card in the Ultimate Rewards family like the Chase Sapphire Preferred® Card, you can pool your points to unlock more options – like transferring them out to a number of hotel and airline partners or redeeming them through the Chase Ultimate Rewards portal.

Best Hotel Credit Card

Starwood Preferred Guest® Credit Card from American Express

By all accounts, star points earned through the Starwood Preferred Guest program are the most valuable hotel points out there. Not only can you redeem free nights for as little as 2,000 points, but you can also transfer the points to a number of high value frequent flyer programs that haven’t forged partnerships with other comparable programs.

Other program perks like the “5th night free” when you book with points and Starwood’s Nights & Flights program sweeten the deal by helping you maximize the points you earn and, ultimately, scoring more free travel. The signup bonus alone (currently 25,000 points after you spend $3,000 within 90 days) on this card means up to ten free nights at Category 1 properties.

Best Airline Credit Card for Domestic Travel

Southwest Airlines Rapid Rewards® Premier Credit Card

By sticking to a mostly fare-based system, the Southwest Rapid Rewards program offers the most valuable points out there for domestic travel and flights to the Caribbean. Even better, Southwest’s Companion Pass offer allows you to earn all of your flights buy-one-get-one, even if you pay for your first flight with points. Although you can earn the companion pass by flying a certain number of Southwest flights within one calendar year, the easiest way is to rack up at least 110,000 Southwest Rapid Rewards points during that timeframe instead.

The current signup bonus on this card (25,000 Rapid Rewards points after you spend $2,000 within 90 days) is enough for one round-trip domestic flight, but the 50,000-point offers that appear every few months are worth the wait. Meanwhile, you also earn 2 points per dollar spent on Southwest Airlines purchases made directly with the airline, 2 points per dollar spent on Rapid Rewards® Hotel and Car Rental Partners, and 1 point per dollar spent on all other purchases.

Best Airline Credit Card for International Travel

Citi® / AAdvantage® Platinum Select® MasterCard®

The best card and frequent flyer program for international travel depends a lot on which airport you fly out of and its availability, but I’ve found the most value with the American Airlines AAdvantage program. Flights to Europe cost only 30,000 AAdantage miles per leg during peak travel periods, and 20,000 AAdvantage miles during off-peak, which stretches from October 15th – May 15th each year.

This card offers a sign-up bonus that fluctuates between 30,000 and 50,000 AAdvantage miles after you spend $3,000 within the first 90 days. Keep an eye out for other AAdvantage card offers, however. Various cards within the Citi AAdvantage family have been known to offer sign-up bonuses worth 75,000 miles, or even 100,000 miles.

Finding the Best Rewards Deals with Credit Cards

Getting the most out of the top credit card rewards offers isn’t hard. The most important thing to remember is that maximizing the potential of these rewards requires a watchful eye on your spending, and a commitment to paying your bill in full every month.

Of course, if you’re carrying any consumer debt, it doesn’t make sense to pursue these cards. Should that be the case for you, steer clear of point-earning cards until you get your debt squared away.

When you use credit cards the right way, there is plenty of value to be found, assuming you are debt-free and not overspending just to rack up rewards points. With a thoughtful plan, you might have enough rewards in the credit card bank to cash in on a little vacation by this time next year.

And always remember, go link any credit card account to your Personal Capital dashboard, to help you track all of our spending in one place.

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Holly Johnson

Holly Johnson is a financial expert and award-winning writer whose obsession with frugality, budgeting, and travel plays a central role in her work. In addition to serving as Contributing Editor for The Simple Dollar, Holly writes for inspiring publications such as U.S. News and World Report Travel, Personal Capital, Lending Tree, and Frugal Travel Guy. Holly also owns two websites of her own - Club Thrifty and Travel Blue Book. You can follow her on Twitter or Pinterest @ClubThrifty.

25 comments

  1. Reward Credit Cards Fan

    You can also use the reward calculator at CreditCardTuneUp. com to get an idea of which cards will pay you more in reward value for your regular monthly expenses. It does card combinations too.

    Reply
  2. marie

    Great post thanks for the publishing this article i like it………..

    Reply
  3. sjb

    It seems to me that the Fidelity Investment Rewards American Express Card is the best overall card, offering 2% back on ALL purchases made with the card, as long as the 2% cashback goes into a Fidelity acct, of any sort: retail brokerage acct, retirement, 529, etc.

    Reply
    • Jeff

      I totally agree with you and have had this card for many years for that very reason that you get 2% back on all purchases. I love it and there is no annual fee! Also, you can redeem the points for statement credit at a ratio that gives you that same 2%.

      Reply
  4. Brian Lindenmeyer

    While these are all great cards and perks, for those of us that do extensive traveling – it’s hard to not use the cards that are associated with the companies we travelers do business with.

    For example: The Delta Reserve Card by American Express may have a $450 annual fee, but you earn MQM qualifying miles with every $30k spent. This is available twice a year, so if you spend $60k you can earn 30k qualifying miles. That along with the Sky Club access (in case you don’t make Diamond status) comes in handy.

    The Marriott and Hilton Honors cards are also two cards I carry. I use these primarily for when I stay at their hotels as you get a massive increase in points earned for the spend at those hotels. Both also give you the first level of status. (Granted I’m Platinum for Life at Marriott, so I can basically get top-tier status anytime.)

    I will say that with the lifetime status at Marriott, I may drop both the hotel cards and opt for the top card on this blog. Between it and Delta I should be covered.

    Reply
    • Anonymous

      Yeah but airlines now require minimum spend and segment in addition to miles flown. Can you still all 3 with the Delta card?

      Reply
  5. Mark

    I have the Chase Freedom card, but prefer the Discover card. It offers the same type of rotating 5% rewards calendar, but the advantage is you can spend your rewards points at a discount in many cases. For example, you can buy a $50 Lowes gift card for $45 (a 10% savings). Gift cards from Chase are not offered at a discount.

    Reply
  6. Anonymous

    What about the cities card that pays 2 points per $ spent

    Reply
    • charles kuehl

      I have just switched to Citi Double Rewards Card for business purchases at the end of November 2015 and have already earned $80+.

      Reply
  7. Chad

    What about Citi Prestige? It offers 3 points for travel and restaurants in perpetuity I believe. Better than Sapphire? (bigger annual fee though)

    Reply
    • Holly Johnson

      The Chase Ultimate Rewards program has better transfer partners than Citi – at least in my opinion. Also , like you said, the annual fee on the Prestige is considerably more. The annual fee is offset if you can take advantage of some of the perks and use the airline credit, but still a huge turn-off for many.

      Reply
  8. Aaron D

    Dear Holly,

    Good article overall.

    However, I think that this article, like other similar reviews of credit cards, misses out on a category of credit card spenders that I fit into.

    I spend a lot on credit cards, for business purposes. As you suggest, I carry zero balance, and use the credit cards as a tool for business. Our business spend annually is well over $100k/year.

    Since the bulk of my spend is not to gas stations, phone, internet, or some of the consumer popular categories, I am more interested in a card that pays the highest reward for ALL categories. So far, the best I have been able to find is a Capital One card, which pays 2% cash or rewards, on all of my spend. Whether it is cash or reward points depends on the type of Cap1 card. But the bottom line is for every dollar I spend, I get 2% back in cash, travel, gift cards, etc….

    So for me this is far superior to any of the cards you have outlined. Though admittedly, the ones you mention are better for sure, if you have enough spend in a specific category of product.

    Thanks for your article, I am open to being shown a better card for my needs, if you know of one. For the record, I do not work for or am affiliated with Cap1.

    Reply
    • JB

      I have the fidelity amex also at 2% noted by another reader, but that’s only where amex is accepted. I may consider switching to Capital One if it’s MC/Visa.

      Reply
    • Holly Johnson

      I don’t think that’s a bad strategy. Earning 2% cash back on $100,000 per year is pretty sweet. You could get more value out of your points if you transferred to frequent flyer programs or hotel programs perhaps, but it might not even be worth the hassle for you.

      Reply
  9. Anthony

    I’m pretty surprised to see Chase Freedom get the nod over the Citi Double Cash. The 5% is nice, but only if you use those services, and even then it’s capped at $1500 of 5% back (so, $75 per quarter). Outside of that it’s only 1% on everything.

    Citi Double Cash is 2% on everything, so if you spend more than $7500 / quarter on your card (which certainly not everyone will, so I suppose that’s the debate) Double Cash is guaranteed to be better, and there’s a good chance it’s better anyway if you’re not perfectly targeting the 5% back categories.

    I’m interested to hear the rationale there since Double Cash is the best cash back card I’ve found.

    Reply
    • Holly Johnson

      The Chase Freedom card is more valuable if you collect Chase Ultimate Rewards points. If you have the Chase Sapphire Preferred card too, you can pool your points in one account and transfer them to airline and hotel partners, book travel through the Chase Ultimate Rewards portal at a 20% discount, etc.
      I think the Citi Double Cash card is a great deal if you’re not interested in transferring points to airlines or hotel loyalty programs.

      Reply
      • Anthony

        Thanks Holly for the clarification! I still wonder about the overall value though. A 20% discount is great, but I’m getting 33% more cash back. Am I misunderstanding how the points work for travel?

        Reply
        • Holly Johnson

          Yes. Points are generally way more lucrative if you transfer them to hotel loyalty or frequent flyer programs. For example, we frequently visit Europe using American AAdvantage miles. Flying off-peak costs 40,000 miles each round-trip, which is an amount of miles you can earn with one sign-up bonus. However, it’s pretty common for the retail price of our tickets to exceed $1,200 each. It would take several credit card sign-up bonuses or tens of thousands of dollars in credit card spend to earn $1,200 in rewards in cash back.

          We also fly Southwest Airlines frequently. Chase Ultimate Rewards points transfer to Southwest at a 1:1 ratio. I am currently in Cancun with my family – we paid around 50,000 Southwest miles total for four round-trip flights here due to the fact that we both have the Companion Pass. The retail value of our flights was around $2,400, but it cost us only 50,000 Southwest miles plus airline taxes and fees.

          I hope I am making sense =) Basically, you can generally get a lot more value if you transfer your points to a hotel loyalty or frequent flyer program.

          Reply
          • Anthony

            Yup, makes a ton of sense. Thanks so much for the article and detailed reply! I’ve added the Daily Capital to my Flipboard feed now, which I suspect is about as high of a compliment a reader can give. 🙂

            Have a great vacation and new year, and stop checking your work email for a day!

  10. Dr Richard Ray Shreve

    This article is a “pimp” type article for specific creditcards that cost a lot and are looking for additional suckers(oopsI mean customers). The is ABSOLUTLEY NO REASON to pay any fee of any type for any card. Rewards are available with cards that are free but then these cards do NOT need a pimp!!! Wake up people and smell the real rewards that cost NOTHING.

    Reply
    • Holly Johnson

      As someone who has literally traveled the world on airline miles, I wholeheartedly disagree. I pay annual fees infrequently, but I always get way more value than I put it. It really depends on your goals, how often you travel, etc.

      Also, Personal Capital doesn’t have affiliate links for any of these cards. They aren’t selling them.

      Reply
  11. Deanna

    I Agree with DR. Richard Ray. I have credit cards and I earn Rewards points 1.25 miles for every dollars I spend on anything not just traveling. Then I earn 5% cash rewards for every dollar spent with no annual fee or member fee. Thank you Capital One and Barclaycard.

    Reply
  12. Ilja Maslov

    For a father raising 4 kids, 2 best reward cards over the past few years were:
    1. American Express Blue Cash Preferred for groceries and gas (6% and 3% cashback, 1% on everything)
    2. Capital One Venture for travel and else (2% on everything, no international transaction fees, erase any recent travel costs at full point value)

    Had CHASE card too, cool metallic card, but try to book any meaningful travel through their program… Better to have all the freedom in the world when booking and then just “erase” as with the Venture card.

    Reply
  13. David

    Hi Holly

    I am always looking for the best possible deal, especially in credit card rewards programs. Is there anything new out there for me. I am looking for cards for both personal and business cards.

    Business – I spend about $325,000 a year on credit cards. We pay off monthly, never carry a balance. Currently using mainly two cards; one gives 2% cash back and the other 2X miles, Most of the monthly charges are to manufactures or distributors, etc.

    Personal – Not nearly as much, maybe $60,000 a year. All of your typical stuff on this.

    Can you recommend the best cards for us? We travel but do not need hotel credit cards. I like getting the 60-75,000 bonus sign up miles or several hundred bucks to sign up. Nothing states I have to keep the card, so I am good changing. One more thing, I don’t mind paying a yearly fee if I can recoup it by a larger reward (especially with the business card). Lastly we have excellent credit.

    Reply
  14. Sanjit Mandal

    Really Ink Plus Business?
    “You earn 2 points per dollar on the first $50,000” that is it, I’m sure many businesses spend more than than easily.

    I LOVE my AMEX Business Gold, it’s the only Charge Card that lets you choose where you get 3X points.

    I did some extensive research a few years ago before getting my AMEX Gold and I still check out others, but also look at their customer service, their online interface, it makes a difference.

    Reply

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