Choosing the Right Rewards Credit Card

If you’re like a lot of Americans these days, you’re looking for a new credit card that allows you to earn benefits while you spend. And in that case, you’re probably on the lookout for the best available rewards credit card.

However, because each person across the country is in a unique financial situation and has their own unique needs, there’s no single “one size fits all” credit card with rewards points. For this reason, there are a number of factors you need to consider when choosing a rewards account.

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For example, you’ll probably want to start by thinking about how you generally use your current credit cards. Go through your old statements or simply think about how often and when you spend with credit. Do you tend to buy a lot of gasoline with those cards? Maybe you spend more on groceries than in any other category. Or perhaps you use it almost exclusively for booking travel arrangements.

Knowing how you spend your money will help you find the best possible card, because many lenders now incentivize certain types of spending. Some cards might give you as much as triple points for every dollar you spend in certain categories. Others might do so in a tiered system—for example, triple points on gas, double on groceries and single for all other purchases.

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You should also think about your current bill payment habits. If you’re conscientious about cutting down your debts and making sure your bills are paid in full at the end of every month, a rewards credit card will essentially grant you free points for spending you would have done anyway. But if you’re someone who generally carries a balance from one month to the next, this type of card might not be right for you. That’s because the interest rates on rewards credit cards are generally higher than those that do not offer points back for every purchase you make, which means that even if you’re earning points, you might end up paying more for them than they’re worth.

Any time you open a credit card account, you should carefully consider how doing so will affect all aspects of your finances.

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