NerdWallet’s Best Rewards Credit Card Roundup, Fall 2011 Edition
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Some of the best rewards credit card deals of 2011 are going on right now: as banks clamor for your attention and your patronage, they’re offering bonus upon bonus to get you in the door. But you can afford to be choosy: pick the card that best suits your lifestyle, your spending habits, your travel plans and your willingness to pay annual fees. Read on for NerdWallet’s picks of the best rewards credit cards for 2011!
Best rewards credit card for suburbanites
The newly released Blue Cash Preferred® Card from American Express (signup bonus: Get $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit.) tops our list as the best rewards card for people who spend on food, gas and clothing – the typical purchases for a family. It earns 6% back on groceries up to $6,000 spent per year (then 1%), 3% back on gas and department stores, and 1% back elsewhere. It also pays out in, well, cash, so you can redeem in $25 increments rather than saving 10,000 rewards points or waiting for your once-a-year payout.
Highlights: easy earning and redemption, high rewards rate on family purchases
Downsides: $75 annual fee, fewer heavy-hitting rewards categories
Best rewards credit card for travelers
The Capital One® Venture® Rewards Credit Card (signup bonus: Enjoy a one-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel) is one of the best travel credit cards around, since it gives a flat 2% rewards rate on all purchases and pays out in a statement credit to offset a travel expense rather than miles tied to a specific airline. This means that you can use your miles for anything travel-related. Plus, there’s no foreign transaction fee, so you don’t have to pay 3% of whatever you spend overseas.
Highlights: high base rewards rate, no F/X fee, easy redemption
Downsides: $0 intro for first year; $59 after that, no bonus categories
Best credit card for socialites
The Citi Forward® Card (signup bonus: 10,000 bonus ThankYou® Points after $650 in purchases & paperless statement sign-up in the first 3 months.) is a great card for city dwellers. Though its signup bonus is nothing to write home about, it makes the list because of its high overall rewards rate. It privileges entertainment spending, giving 5 ThankYou Points per $1 spent on dining, books, movies and music (it also counts Amazon.com as a bookstore, no matter what you buy) and 1 point elsewhere. The card also rewards good behavior, giving an APR reduction of up to 2% when you stay under your credit limit and pay on time for three straight billing cycles. Plus, there’s a $0* annual fee. However, overall rewards are capped at 75,000 a year. Redemption is easy – 1,000 ThankYou points gets you a $10 gift card.
Highlights: high rewards in common spending categories, $0* annual fee
Downsides: rewards cap
Best cash back credit card
Those epic bonuses make their splashiest appearance with the Chase Freedom® (signup bonus: Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening). Beyond that, you earn 5% cash back on rotating bonus categories that change quarterly, up to $1,500 in quarterly spending, and an unlimited 1% back on everything else. Finally, there’s a $0 annual fee, so it’s a good card to have around. If you ever stop using it, you can keep the account open and raise your credit score without bleeding annual fees.
Highlights: Sign-up bonus, $0 annual fee, concierge service
Downsides: $1,500 quarterly rewards cap on bonus categories
Best hotel credit card
The Starwood Preferred Guest® Credit Card from American Express is a much better card than it looks at first glance. The rewards rate initially seems unimpressive: 1 Starpoint on all purchases, and up to 5 when you spend at SPG hotels (2 for the card + 2 for being a preferred guest + 1 for elite status). But we value Starpoints at anywhere from 1 cent to a whopping 5 cents, and 2.4 cents on average. That means you get 2.4% rewards on all purchases, and the bonus is worth $600 on its own. You also get nice perks like accelerated elite status, late checkout, and room upgrades.
Highlights: high rewards rate, perks
Downsides: points lose value if not redeemed for Starwood or affiliates
Best business rewards credit card
The Ink Cash® Business Credit Card (sign-up bonus: Earn $200 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening.) tops our list for the best business credit cards largely because of its sign-up bonus. In addition, you earn 5% cash back on office supplies, cable and telecom services (up to $25k in purchases), 2% back on gas and dining (up to $25k) and an unlimited 1% back on everything else. Plus, rewards don’t expire, and it comes with a No Annual Fee annual fee.
Highlights: No Annual Fee annual fee, sign-up bonus, 5% cash back on business purchases
Downsides: rewards cap on bonus categories