Credit cards can be a double-edged sword. But, if used correctly, they can be a great financial tool. One of the best perks of having a credit card is the reward points. You can use the points to cover the card’s annual fees, buy more groceries, travel comfortably, and actually save more on your usual spending.
With so many banks offering so many cards, choosing the right credit card for rewards points in 2020 can be so overwhelming. But don’t worry, we have narrowed down the list for you.
1. The Gold Card of American Express® – Best for Grocery and Dining Out
A welcome bonus of 35,000 points is given after spending $4,000 within 3 months of card activation. The card has a strong rewards program letting you earn 4x points when you eat in restaurants worldwide and shop at various supermarkets in the U.S. (as much as up to $25,000 each year only in purchases, and 1x points after that). Plus, frequent travelers can get 3x points from their flights if tickets are purchased directly on selected airlines or on Amextravel.com.
Aside from earning points, cardholders are rewarded with an annual dining credit of up to $120 at The Cheesecake Factory, Seamless, Grubhub, Boxed, Ruth’s Chris Steak House, and participating Shake Shack locations (activation required). Other than that, cardholders can also get an Airline Fee Credit of $100 that can be used for in-flight food and beverages, seat upgrades, and baggage fees. Even though the card has a $250 annual fee, it can easily be offset by maximizing all these benefits.
2. Citi® Double Cash Card – Best Card with No Annual Fee
The no annual fee is what attracts first-time cardholders to this card. It has a hassle-free cashback program that doesn’t require any activation or spending caps. You will get 2% cashback on all purchases in which the first 1% will be applied upon purchase and the other 1% will be given upon payment of your credit card bill.
Even though there is no welcome bonus like other cards, there is also a number of programs that you can benefit from this card. One of these programs is Citi Entertainment℠ which gives you first access pass to various concerts and events.
3. Chase Sapphire Reserve® – Best for Frequent Travelers
This card is one of the well-known cards out there, especially for travel hackers, and is always on the list of best travel rewards cards. You will receive 50,000 sign up points after spending $4,000 within your first 3 months.
There is a huge annual fee of $550 but you’ll get a $300 travel credit reimbursement so that kind of offsets the annual fee by more than 50%. The remaining annual fee can easily be offset by maximizing other perks. Earn 10x points on Lyft rides until March 2022 and 3X points on any travel purchases (after getting the $300 annual travel credit) and dining worldwide.
Aside from the rewards benefits, having this card will give you premium travel benefits as well. You will have access to 1,000+ VIP lounges in over 500 cities worldwide, special car rental privileges from National Car Rental, Avis and Silvercar, and exclusive benefits when you stay at The Luxury Hotel & Resort Collections.
4. Amazon Prime Rewards Visa® Signature Card – Best for Online Shoppers
If you already do all your shopping in Amazon Prime and Wholefoods, then this is the card for you. New cardholders will get a $70 Amazon Gift Card as a welcome bonus without any spending requirement. Perks include 5% back from Amazon.com & Whole Foods Market if you have an eligible Prime membership, 2% back on purchases made at restaurants, drugstores, and gas stations, and 1% back on all other purchases. You can then use these rewards to pay for all or part of your purchases.
There is no single best reward card out there. The best card for you depends on your lifestyle, and current needs. The only way to not get overwhelmed in choosing a rewards card is to first know your spending habits. Pick a card that earns the most in categories that you most spend on already (e.g. groceries, dining out, travel, or entertainment). Next, determine if you are willing to pay for annual fees and if the rewards program will offset the annual fees. With these in mind, you are one step closer to choosing the best card for you.