NerdWallet’s Best Rewards Credit Card Roundup, Winter 2012 Edition
Want to find the killer bonus offers of 2012? NerdWallet’s roundup of the best rewards credit cards has it all: $500+ signup bonuses, easy-to-redeem cash back, no fees, waived fees…if it earns you rewards, we’ve got it covered. But don’t sign up for the first offer you find: With issuers desperate for your business, you can afford to be picky. Take a look at a few and choose the card that best suits your lifestyle, spending habits, travel plans and fee tolerance. Here are NerdWallet’s picks for the top rewards cards for every spending profile.
Best rewards credit card for travelers
The Capital One Venture Rewards is one of the most beneficial travel rewards card out there. With a 10,000-mile signup bonus, you’ll earn a flat 2% back on all purchases. The rewards are paid out in statement credits for travel expenses, so you’re not tied to a particular airline of hotel chain. You can use your rewards on any flight or for any lodging with restrictions or blackout dates. Capital One’s No Hassle Miles are also good for gas, car rentals, inflight movies and more. And like any respectable travel card, the Venture does not charge a foreign transaction fee. You won’t have to spend extra just because you’re overseas. The annual fee is $59 (waived the first year), which is chump change compared to your potential earnings.
Highlights: high base rewards rate, no F/X fee, easy redemption
Downsides: $59 annual fee – waived the first year, no bonus categories
Best signup bonus
The Chase Sapphire is another great travel rewards cards and boasts a more-than-generous signup bonus. You’ll get the bonus if you spend $3,000 within the first 3 months, and, at 50,000 Ultimate Rewards points, it equates to $625 in travel. When booking through Chase, you’ll earn points at 2 per dollar. All other purchases earn at 1 point per dollar. And when booking travel through Chase, your points are worth 25% more. One of the more unique and appealing features is the 7% rewards dividend. Every year, you’ll receive a bonus equal to 7% of your total earned rewards over the past 12 months. All these elements work out to an estimated rewards rate of 1.28% on everyday purchases and 2.56% on travel booked through Chase. The Sapphire has no foreign transaction fee, but it does charge an annual fee of $95 (waived the first year).
Highlights: $625 signing bonus, 7% rewards dividend, book with Chase and save 25%
Downsides: $95 annual fee – waived the first year
Best no annual fee credit card
The Chase Freedom is one of the most attractive 5% cash back cards on the market. It offers an alluring $200 cash back signing bonus and 5% back on rotating rewards categories. The categories change quarterly and coincide with seasonal needs (for example, during the holidays you typically earn 5% on department store purchases, movies, charities and the like). Your 5% earnings are capped, but the 1% base rate is unlimited. Overall, the Freedom offers some pretty generous rewards, especially for a card that does not charge an annual fee.
Highlights: $200 cash back bonus, no annual fee, concierge service
Downsides: $1,500 quarterly rewards cap on bonus categories
Best rewards credit card for suburbanites
The American Express Blue Cash Preferred is ideal for typical family purchases. In addition to a $100 signing bonus, you’ll earn 6% cash back on groceries, 3% on gas and department store purchases and 1% everywhere else. There are no earning limits, and you can redeem your cash in $25 increments. Additionally, the intro purchase APR currently stands at 0% for 12 months, so you won’t have to worry about interest for an entire year. It does have a $75 annual fee, but your rewards easily outweigh the cost. If you spend just $25 on groceries every week, the cost is covered, and additional spending is money in your pocket.
Highlights: easy to earn and redeem, high rewards rate on family purchases
Downsides: $75 annual fee
Best credit card for socialites
The Citi Forward® Card is a perfect for socialites, especially in metropolitan areas. The 10,000 Citi ThankYou Point signup bonus is redeemable for a $100 gift card, which is slightly mediocre but certainly better than nothing. The Forward’s rewards rate is what really sets it apart. You earn 5% back on entertainment spending, including dining, books, music and movies. Intriguingly, you also receive 5% back on Amazon purchases, which all fall under the “book” category no matter what they actually are. All other non-entertainment purchases earn rewards at a base rate of 1%. (Rewards, unfortunately, are capped at 75,00 annually.) The Forward appreciates good spending habits and allows you to lower your APR up to a full 2%. To do so, you need only stay under your credit limit and stay on time with your payments.
Highlights: high rewards in common spending categories, no annual fee Downsides: rewards cap
Best airline credit card
Another bonus- crazed Chase card is the Southwest Airlines credit card. Signing up gets you 25,000 Southwest miles—worth more than a round-trip domestic flight! You earn 1 mile per dollar spent and double miles on Southwest purchases. And on every anniversary of your signing, you’ll receive 3,000 bonus miles, which is equivalent to $50 in airfare. You don’t have to worry about blackout dates, reward expirations or change fees, and your bags fly free. The Southwest card does have a $69 annual fee, but considering the benefits, it’s more than worth the cost.
Highlights: killer signup bonus, anniversary bonus
Downsides: no annual fee, no airline-specific perks like priority boarding
Best hotel credit card
At first glance, the Starwood American Express may not seem very impressive. You earn anywhere from 2 to 5 points per dollar spent at SPG hotels (depending on your elite status) and 1 point per dollar everywhere else. But Starpoints seem to operate in an alternate reality. Unlike most point systems, which are generally worth about a cent a point, we value Starpoints anywhere from 1 to 5 cents per point (2.3 cents on average). With an approximate 2.3% back on purchases, it stands above even the Venture in rewards rates. Additionally, you’ll enjoy 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
Mainly because it offers a $250 cash signup bonus, the Chase Ink is our top pick for business rewards cards. It also has a pretty exciting rewards rate. You earn 5% back on office supplies, cable and telecom services, 2% back on gas and dining and 1% back on everything else. The accelerated categories are limited to $25,000 in purchases, but the 1% is unlimited. Rewards do not expire, and you don’t have to pay an annual fee.
Highlights: no annual fee, signup bonus, 5% cash back on business purchases
Downsides: rewards cap on bonus categories