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Best Rewards Credit Cards and Cashback 2019

Last Updated: 11. September 2019
Best Rewards Credit Cards and Cashback 2019
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Credit cards come in a range of shapes and sizes, so the one that you opt for will ultimately depend on your specific requirements. If you are looking to take out a credit card with the view of making regular purchases and subsequently clearing the balance at the end of each month, then your best bet is to find a provider that offers competitive rewards.

With so many rewards-based credit card providers now in circulation, we’ve done the hard work for you by listing the best credit cards for rewards and cashback in 2019. We’ve also provided some useful information on how credit card rewards typically work, and what you need to do to ensure that you maximize the potential benefits.

Note: As a handy tip, if you are 100% confident that you will ALWAYS pay off your balance in full each and every month, then effectively, the underlying APR rate is irrelevant. The reason for this is that you won’t need to pay any interest if you pay your balance off before the monthly due date!

What are credit card rewards?

If you’re relatively new to the credit card arena, then it is important to make sure you understand what we mean by credit card rewards. In its most basic form, in order to entice new customers, some credit card providers will offer you a reward every time you make a purchase on your card. As we will discuss later, this can come in a range of different forms – with cashback being the most widespread.

In order to set the scene, let’s take a look at a quick example – based on traditional credit card cashback.

  1. You obtain a Chase credit card that comes with a 3% cashback scheme on all purchases for the first year – upto a maximum of $2,000 per month.
  2. In the first month, you spend $2,000 on fuel.
  3. This means that you would be awarded $60 in cashback, which is 3% of $2,000.
  4. Assuming that you make no other purchases, at the end of the month you would be required to pay $1,940.
  5. This takes into account the $2,000 that you spent, less the $60 cashback that you earnt.

Sticking with the same example above, if you proceeded to pay the full $1,940 balance off in-full at the end of the month and thus – you settled your balance in its entirety, then you wouldn’t pay any interest. As such, this is a perfect example of maximizing your credit card rewards offer.

How do credit card issuers offer rewards?

Firstly – and as noted earlier, the reason that credit card issuers offer rewards is because they want to entice you over to their product. As there are literally hundreds of financial institutions competing for your business, reward offers are getting more and more competitive, which is great news for you as the customer. Nevertheless, this beggars the question – how can credit card companies actually afford to give you these rewards?

Well, in a nutshell, the rewards are typically covered from the charges that credit card companies enforce on merchants.

💳 For example, let’s say that you purchase a brand new sofa at a cost of $5,000.

💳 When you make the purchase in-store, you decide to use your credit card.

💳 While the cost of the sofa amounts to $5,000, the store will only receive around $4,850 of this, as they’ll likely need to pay a 3% interchange fee – which goes to the credit card issuer in question. 

💳 With the credit card company subsequently receiving $150 in interchange fees, they can then pass some of this down to their customers in the form of a cashback reward.

💳  With that being said, it is actually the merchant that you spend your card with that contributes to the rewards.

What types of credit card rewards are there?

There are now heaps of different credit card rewards available in the market. As such, you need to make some considerations regarding your typical spending habits. For example, if you find yourself eating out in restaurants on a  frequent basis, then you’ll want to focus on a credit card that offers cashback every time you use your card when eating out.

Alternatively, if you’re a frequent traveler and thus – spend a lot of money on flights, then you will be better off concentrating on a credit card that comes with air miles. Nevertheless, we’ve listed some of the most popular credit card rewards for you to consider below.

✔️ Cashback: The most common form of credit card reward is that of a monthly cashback. The credit card provider will typically offer a fixed cashback rate, upto a certain amount each month. For example, a provider might offer 2% cashback on all purchases upto $3,000 every month. 

Alternatively, you might only be able to claim the cashback on certain purchases, such as groceries. Some credit card providers offer an enhanced cashback rate when you first obtain the card, for a set period of time. For example, you might get 5% cashback on all purchases for the first year, with the rate then dropping down to 2% after.

✔️ Points: Although somewhat similar in nature to a more conventional cashback offer, points rewards are based on every dollar that you spend on your card. For example, a credit card provider might give you 100 points for every $1 that you spend. That would mean that a $100 purchase would yield 10,000 reward points. 

In terms of what you can do with the points, this will vary depending on the terms set out by the credit card provider in question. For example, while some providers allow you to simply redeem the points for cash, others only allow you to spend them in selected stores. Alternatively, the credit card points can sometimes be exchanged for gift cards. Ultimately, you need to assess what the points can be spent on before taking out the credit card, otherwise it might not be worth your while.

✔️ Miles: When we refer to credit card rewards in the form of miles, these are travel-specific offers. In its most basic form, every time you make a purchase on your credit card, you will receive a certain number of miles – similar to how you might receive points. However, the key difference is that typically,  the miles can only be used to purchase flights. 

Moreover, each credit card company will usually have specific relationships with a particular airline, or group of airlines. As such, you can only use the miles with the airlines supported by the credit card rewards program. If you don’t have enough miles to purchase a flight out-right, then you simply pay the difference in cash.

Things to consider when taking out a rewards credit card

As is the case with any credit-based product, you need to make a number of considerations before taking out a rewards credit card. Below we’ve listed some of the most important factors that need to form part of your decision-making process when obtaining a new credit card for the purpose of claiming rewards.

💳 How are my rewards paid? First and foremost, you need to assess how the credit card company issues the rewards. As we noted above, this will either be in the form of cashback, points, or miles. If you’re opting for points, you need to evaluate what you can redeem the points for. Similarly, if opting for a miles-based card, you need to ascertain what airlines you can exchange the points with.

💳 How much cashback will I get? You need to understand how much you cashback you are going to be able to claim. This will be expressed as a percentage, and usually upto a maximum amount each month. For example, you might get 3% each month, up to a maximum of $4,000.

💳 What purchases are eligible? You need to explore what types of purchases are eligible for rewards. For example, the credit card company might only give you the rewards when you use the card in-store, meaning that online purchases won’t qualify.

💳 How long are the rewards available for? It is quite common for credit card companies to offer an introductory rate, followed by a standard rate. For example, you might be offered 5% on all purchases for the first 6 months, with the rate subsequently dropping down to just 1% after.

💳 Am I going to clear my balance in-full each month? It is important to remember that you should only engage in a credit card rewards program if you are confident that you can pay your balance of in-full every month. Otherwise, the interest payments will make the exercise counterintuitive. For example, it is all good and well receiving 5% cashback on all of your purchases over the course of the year, however, if you end up paying 15% APR on the same purchases because you only pay the minimum each month, you would be losing money!

💳 Am I eligible? When credit card companies offer lucrative rewards programs, they typically only offer this to those with good or excellent credit. As such, if you have bad credit, then you probably won’t qualify for the best offers.

Pros and cons of rewards credit cards

The Pros

  • Available across cashback, points and air miles
  • Get rewarded every time you make a purchase
  • Reduce your cost of living
  • Perfect as long as you pay your balance in full each month

The Cons

  • You need to ensure you clear your balance each month
  • The best offers are reserved for those with good or excellent credit

Criteria used to rank the best credit cards

❓ How the rewards are paid (cashback, points, air miles, etc)

❓ Whether the card comes with 0% purchases

❓ Whether the card comes with any hidden fees

❓ How much you can claim each month

❓ Whether the offer is ongoing or for a set period of time

❓ Eligibility requirements

Top 5 rewards credit cards

1. Chase Sapphire Preferred Card
 

At the time of writing, there are very few credit card providers that can rival the rewards offered by the Chase Sapphire Preferred Card. In a nutshell, the card comes with a highly lucrative introductory offer of 60,000 points when you spend $4,000. As long as you do this within the first three months of obtaining the card, you will get the points-equivalent of $750 to spend towards travel. 

On top of the hallmark offer, you will earn 2 points for each dollar that you spend on travel and dining – both domestically and when you are on vacation. For everything else, you’ll be paid 1 point per dollar. As an added bonus, when you do use your card abroad, you won’t be charged any foreign transaction fees. 

In terms of the specifics, the card comes with a standard APR rate of between 17.99% and 24.99% – depending on your individual loan profile. However – and as we have already noted, this is effectively irrelevant if you always clear your monthly balance. Finally, it is also important to note that you will need to pay an annual fee of $95. As such, you need to ensure that you are maximizing your rewards every month.

Key Points:

💳 60,000 points when you spend $4,000 in the first 3 months

💳 60,000 points equates to $750 in travel rewards

💳 2 points per dollar on travel and dining

💳 1 point per dollar on everything else

💳 APR rate of between 17.99% to 24.99% once the offer expires 

💳 Annual fee of $95

2. Capital One Quicksilver
 

If you’re looking for the ultimate all-rounder, then look no further than the Capital One Quicksilver credit card. First and foremost, the rewards program is based on a monthly cashback offer. This comes with a no-nonsense 1.5% cashback on all purchases, with no monthly limits. 

As such, you would be wise to use your card for each and every purchase that you make throughout the month. Whether its groceries, fuel, dining, travel, nights out or hotels – you will ALWAYS earn 1.5% cashback. When you initially sign-up for the card, Capital One will also give you a $150 cash bonus when you spend your first $500. You have three months to do this, which is great. 

In even better news, the credit card also comes with a huge 15 months 0% interest offer on both purchases and balance transfers. After that, the standard APR rate will revert to between 16.24% and 26.24%. Finally, there are no annual fees, although you will need to pay a charge of 3% if you decide to make a balance transfer.

Key Points:

💳 $150 cashback when you spend $500 in the first 3 months

💳 1.5% cashback on all purchases

💳 No limit to the amount of cashback you can get

💳 0% interest offer for 15 months on both purchases and balance transfers

💳 APR rate of between 16.24% and 26.24% once the offer expires 

💳 No annual fees

3. Chase Freedom Unlimited
 

If you’re looking to maximize the amount of the cashback you can claim on your purchases, then you’ll be wise to consider the Chase Freedom Unlimited. In a nutshell, the team at Chase are now offering a huge 3% cashback on all purchases for the first year – upto the first $20,000 that you spend. In terms of the math, this means that you will receive $600 back once you reach the $20,000 target. 

After the first year, or you reach your first $20,000 in purchases, the standard cashback rate then goes down to 1.5%. There is no limit to the amount that you can earn from the 1.5% cashback offer, and each and every purchase qualifies. Furthermore, the Chase Freedom Unlimited credit card come with a 15 months 0% interest offer on both balance transfers and purchases. 

Although you’ll need to pay a 3% balance transfer fee, there are no annual fees to contend with. If you continue using your credit card after the 15 months have passed, then the standard APR rate ranges from 16.99% to 25.74%. However, at this point you should consider switching to a new rewards credit card anyway. 

Key Points:

💳 Intro offer of 3% cashback in year 1 – upto the first $20,000

💳 1.5% cashback on all purchases after the intro rate

💳 Unlimited amount of cashback on standard 1.5% rate 

💳 0% interest on balance transfers and purchases for 15 months

💳 No annual fees

💳 Standard APR rate of between 16.99% and 25.74% once offer expires 

4. Bank of America Cash Rewards
 

Although slightly less straightforward, the Bank of America Cash Rewards credit card is still a very worthwhile option. First and foremost, you will receive a $200 cashback when you spend $1,000 within 3 months of being approved for the card. Outside of the introductory offer, you will earn a whopping 3% cashback on your chosen spending category – such as gas or travel. 

After that, you will get 2% cashback on all purchases made within grocery stores. Take note – both the 3% and 2% offer aew only available upto the first $2,500 that you spend, each and every month. Furthermore, the Bank of America Cash Rewards credit card also comes with an unlimited 1% cashback on all other purchases. 

As an added bonus, the credit card also comes with a 0% interest offer for the first 15 months on both balance transfers and purchases. Alongside a 3% transfer fee, all balance transfers must be made within the first 60 days of being approved for the card. Outside of the introductory offers, the card comes with a standard APR rate of between 15.99% and 25.99%. Finally, the card comes with no annual fees. 

Key Points:

💳 Intro offer of $200 cashback when you initially spend $1,000 in the first 3 months

💳 3% cashback on your chosen spending category

💳 2% cashback on in-store grocery purchases

💳 Unlimited 1% cashback on all other purchases

💳 0% interest on balance transfers and purchases for 15 months

💳 No annual fees

💳 Standard APR rate of between 15.99% and 25.99% once offer expires 

5. Citi Rewards+

Much like in the case of the Bank of America Cash Rewards, the Citi Rewards credit card comes with a variety of rewards – most of which centre on points.

Firstly, when you initially obtain the card, you will earn 15,000 points when you spend $1,000 in the first 90 days. When you do, you’ll be able to claim a $150 gift card. Moreover, the card comes with a very competitive 0% interest offer for the first 15 months. This covers both purchases and balance transfers. 

In terms of the points system itself, you will earn 2 points per dollar for purchases made at gas stations and supermarkets – upto the first $6,000 per year. After that – and for all other purchases, you will get 1 point per dollar. Not only are purchases rounded up to the nearest 10 points, but there is no limit to the amount of cashback that you can claim at the 1 point/dollar rate.

Finally, there are no annual fees attached to the card, and the standard APR rate ranges from 15.49% to 25.49% – based on your individual credit profile.

Key Points:

💳 Intro offer of $150 gift card when you spend $1,000 in the first 90 days

💳 2 points per dollar on supermarket and gas station purchases ($6,000 max per year)

💳 1 point per dollar on all other purchases

💳 Unlimited amount of cashback when claiming the 1% rate

💳 0% interest on balance transfers and purchases for 15 months

💳 No annual fees

💳 Standard APR rate of between 15.49% and 25.49% once offer expires 

FAQs

What is a rewards credit card?

Rewards credit cards are specific credit cards that allow customers to earn a range of rewards when they make purchases on the card. This is either in the form of cashback, points (which can be exchanged for cash or other rewards), and air miles.

How does credit card cashback work?

In its most basic form, you will receive a percentage of the amount that you spend on your credit card back as a refund. For example, you might get 3% of everything you spend upto the first $3,000 per month. The money is then reduced from the amount that you pay back to the credit card company.

What purchases qualify for credit card rewards?

This depends on the specific credit card in question. For example, some credit cards will give you rewards for all purchases. On the other hand, some might specify a particular type of spending category, such as gas stations or supermarkets. Ultimately, you want to pick a rewards credit card that gives you rewards on purchases that you make regularly.

Do I have to pay a fee when taking out a rewards credit card?

When you apply for the card, you won’t need to pay a fee. However, some rewards credit cards do come with an annual fee. As such, you need to factor this fee into your overall calculations when assessing whether the rewards are worthwhile.

Can I have more than one rewards credit card?

In theory, you can have as many rewards credit cards as you want. However, it is important to remember that every time you proceed with an application, this is likely to be posted to your credit report. Applying for too many credit-based financial products can hurt your FICO score, so try to avoid making too many applications. 

How do air miles work via a rewards credit card?

If you have a rewards credit card that pays out in air miles, the points need to be used against flight tickets. In most cases, the credit card rewards can only be used with certain airlines, so be sure to check this out before proceeding with your application.

Views expressed are those of the writers only. Past performance is no guarantee of future results. Trading comes with severe risk. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Kane Pepi

Kevin holds academic qualifications in the finance and financial investigation fields. With a passion for all-things finance, he currently writes for a number of online publications.