Dr. Credit Card - All About Credit Card Rewards

Dr. Credit Card - All about Credit Card Rewards

Updated May 4, 2016. This page is NOT updated. For the updated page please visit this page.

Top Credit Cards for Rewards

If the Top 10 list is what you need, stop here :-); otherwise, continue to see our detailed recommendations for the best credit cards for earning rewards - we won’t be talking about signup bonus, travel perks, or protection. Before April 2016, we had a page "Dr. Credit Card's Top List" for the best rewards card we recommended, and you may see this new page as a replacement and extension of the old list. We will be discussing two categories of cards simply because they are fundamentally different. We think the first question you need to ask when choosing a rewards card shall be “Do I want cashback/fixed-value rewards or the real miles/points?”

Best Cashback or Fixed-Value Rewards Credit Cards
These cards earn either straightforward cashback or fixed-value rewards miles/points which are not associated with or can’t be transferred to any frequent traveler programs. Fixed-value miles/points can be redeemed for merchandise, gift cards, statement credit, or travel, at fixed value. The advantage of this type of cards is simplicity - you never need to figure out how to maximize the value of your rewards or just how to effectively use your rewards.

For general spending, either Elan Fidelity Visa or Citi Double Cash is our benchmark because of the unlimited 2% cashback with no annual fee. You may also consider a great alternative - Barclays Arrival Plus World Elite MasterCard (unlimited 2.11% rewards when redeemed for travel, $89 annual fee, waived for the first year).
Grocery Stores: Amex Blue Cash Preferred which carries a $75 annual fee but offers 6% cashback on groceries (up to $6,000 in purchases each year) and unlimited 3% on gas and department stores. We hate the annual spending cap on groceries, but Blue Cash Preferred is still arguably the best grocery bonus cashback card out there, except you can handle the quirky but potentially lucrative Amex Old Blue Cash, which offers 5% on groceries, gas, and drugstores (up to $50,000 spent per year) after your first annual $6,500 in purchases.
Gas Stations: PenFed Platinum Cash Rewards Visa offers unlimited 5% cashback on gas without an annual fee when you have a certain banking relation with PenFed (such as a checking account with direct deposit). PenFed Platinum Rewards Visa Signature, also without an annual fee, offers unlimited 5x points (=4.25%) on gas and 3x on groceries and doesn't require a banking relation. Sam's Club MasterCard ($0 annual fee) offers 5% cashback on gas (up to $6,000 in purchases each year) and 3% on travel & dining, and you need to be a Sam's Club member to have this card.
Airfare: PenFed Premium Travel Rewards Amex offers unlimited 5x points (=4.25%) on airfare without an annual fee.
Quarterly Rotating Categories: Discover it and Chase Freedom, both without an annual fee, offer 5% cashback on quarterly rotating categories, up to $1,500 in purchases in the 5% categories each quarter.
Pick Your Categories: US Bank Cash+ ($0 annual fee) offers 5% cashback on 2 categories you choose from the 12 categories set by US Bank (unfortunately, gas, groceries, dining, airfare, and hotels are not among the current 12 categories), up to $2,000 in purchases in the 5% categories each quarter.
Finally, we can't end our discussion of fixed-value rewards without talking about US Bank FlexPerks Travel Rewards Amex ($49 annual fee, waived for the first year). It offers 3x points on charity, 2x on cellphone & dining plus one of the following categories you spend most each month: gas, groceries, or airfare, and 1x everywhere else. FlexPerks points are not associated with any frequent traveler miles/points, but they are not strictly fixed-value either. The value ranges from 1 to 2 cents a piece, and we think 1.6 cents is a more realistic value you could achieve. In this way, the card returns pretty strong 4.8%, 3.2%, and 1.6% travel rewards, for the 3x, 2x, and 1x categories, respectively. In addition, you receive an annual 3,500 points bonus when you spend at least $24,000 each year, and this bonus more than cancels out the annual fee.

Best Miles/Points Credit Cards
These card earn either miles/points of a specific frequent traveler program or points that can be transferred to miles/points of multiple frequent traveler programs. For beginners, please check out our featured review on five programs that allow points transfer to multiple frequent traveler programs: SPG vs. MR vs. UR vs. TY vs. CR. Since the value of these miles/points heavily depends on how your redeem them, they could be extremely lucrative but not easy to figure out. There are some real world examples in our recent post "Five Years of Earning and Redeeming Miles/Points with Credit Card - My Personal Story" if you are interested. Here I copy my explanation of miles/points value: "Basically the value comes down to how much I would pay for an airline ticket or a hotel night if I don’t have miles/points, rather than how much the airline/hotel charges. For example, if a round trip long haul business class ticket retails at $6,000 but will cost 120,000 miles to redeem, my miles value is not 5 cents per mile ($6,000/120,000 miles), but rather 1.8 cents per miles since I am willing to pay ~$2,200 for that ticket." With that squared away, let's look at the our top recommendations for miles/points credit cards that are best for earning you rewards.

Amex SPG Card (annual fee $95, waived for the first year) returns exactly 1 Starpoint per dollar spent for most purchases and 2 Starpoints for Starwood hotel spending. Starpoints are probably the single most valuable currency in the miles/points world due to the fact that they not only are worth a lot when redeemed for Starwood hotels but also can be transferred to around 30 airline partners including American, Delta, Alaska, Virgin America, Hawaiian, Air Canada, British, Singapore, etc. at 1:1 ratio (and 1:1.25 if transferred in bulks of 20K). Many travelers value Starpoints more than 2 cents a piece (we value them at 2.25) and love the ultimate flexibility it provides, and that is how they prefer Amex SPG over those high earning cashback cards. So obviously, Amex SPG is almighty when it comes to general spending.
Chase Sapphire Preferred (annual fee $95, waived for the first year) is another mighty player in the miles/points arena. Generally Sapphire Preferred returns 1 Ultimate Rewards (UR) point per dollar spent - we value a UR point at 1.5 cents after the 2014 devaluation thus its return is less than 2%. However, Sapphire Preferred also offers 2x points (=3%) on travel & dining. What is more important, UR has similar flexibility as SPG when it comes to redemption, which is one great reason to choose it over cashback cards, and UR's transfer partners include United, Southwest, Korean Air, British, Singapore, Hyatt, etc. In addition, when you shop online, you will find that UR Mall provides a great opportunity to rack up huge amount of points. This card used to be stronger in rewards, due to 3x points on airfare through UR and 7% annual dividend on points earned in the previous year, both of which were discontinued in 2016. That is the reason why this card did not make to the current Top 10 Credit Cards for Rewards. We do hope that Chase can come up with some valuable new features to fend off competitions from Amex and Citi.
Amex Membership Rewards (MR) is another program that allows points to be transferred into frequent traveler miles/points, and Amex's partners include Delta, Hawaiian, British, Air Canada, ANA, Singapore, etc. Currently we value a MR point at 1.5 cents a piece. In March 2014, Amex unveiled a new card EveryDay Preferred (EDP), with a $95 annual fee, returning up to 4.5x points (=6.75%), 3x (=4.5%), and 1.5x (=2.25%), on groceries (with an annual spending cap of $6,000), gas, and other purchases, respectively, and we considered it as the most important and exciting new product Amex has brought to us in the last few years. As you can see, EDP is not only crazily lucrative in bonus categories but also on par with Amex SPG when it comes to general spending, and that's why it is ranked #1 credit card for rewards. In June 2015, Amex revamped its Premier Rewards Gold (PR Gold) by increasing the annual fee to $195 (waived for the first year) while introducing $100 annual airline credit, a new 2x category, and waived foreign transaction fees. After using $100 airline credit, the effective annual fee is considered $95, and it has a very powerful 3-2-1 earning structure: 3x points (=4.5%) on airfare, 2x (=3%) on dining & gas & groceries, 1x (=1.5%) everywhere else. Even though its gas and grocery bonuses are not as great EDP's, PR Gold has a wider coverage over four important categories, which is kind of insane.
Starting October 2014, Citi Prestige (annual fee $450) offers a 3-2-1 earning structure very similar to Sapphire Preferred's at that time. The first thing you will note is the seemingly high annual fee; however, since Prestige offers $250 annual airline credit, which can be used toward airfare and incidentals, the effective annual fee of Prestige is merely $105 more than Sapphire Preferred's, and for that it provides unlimited lounge access to 40+ American Admirals Clubs and 550+ Priority Pass Select airport lounges worldwide. In addition, it offers an unique annual relationship bonus, which can be very valuable for some customers (15% for Citigold and 25% for Private Bank clients). Without the relationship bonus, Prestige returns 1x ThankYou (TY) point per dollar spent for general spending, 2x TY points for dining & entertainment, and 3 TY points for airfare & hotels & travel agencies. On the redemption side, TY points earned from Prestige are considered "hybrid" since they can either be redeemed for fixed-value travel (1.6 cents per point on American or 1.33 cents per point on other airlines) or be transferred to several partners including Singapore, Cathay Pacific, Flying Blue, and Etihad. Even though in general TY's transfer partners are not as desirable as SPG or UR, considering both the fixed and flexible options, we currently value TY points earned from Prestige at 1.6 cents per point. In this way, Prestige returns 4.8%, 3.2%, and 1.6%, on 3x, 2x, and 1x categories, respectively, even before the relationship bonus! In April 2015, Citi ThankYou Premier (annual fee $95, waived for the first year) was revamped to became even more rewarding than Citi Prestige, returning 1 TY point for general spending, 2 TY points for dining & entertainment, and 3 TY points for travel & gas. Our current value for TY points earned from ThankYou Premier is 1.4 cents per point. To decide which Citicard is better for you requires looking at their differences in annual fees, travel benefits, and bonus categories.
Barclays JetBlue Plus Card (annual fee $99) is a true dark horse in our analysis. Unlike legacy airlines, JetBlue has a revenue based frequent flyer program, and its TrueBlue points can be redeemed for JetBlue flights at an almost fixed-value rate of around 1.4 cents per point. Here you won't get an exciting redemption like an international long haul business/first class award, but you also avoid a lot of hassles trying to find an available seat and maximize points value, as TrueBlue points are very straightforward. JetBlue Plus Card has a unique feature that returns 10% points each time you redeem for JetBlue flights, essentially increasing the value of TrueBlue points to 1.55 cents a piece. In addition, JetBlue Plus offers a very competitive 6-2-1 earning structure for JetBlue, dining & groceries, and other purchases (9.3%, 3.1%, and 1.55% respectively) and several valuable perks that easily justify the annual fee, including 5,000 anniversary bonus points, first bags free, and a potential Mosaic status after $50K annual spending. Our biggest concern is that we are not sure if JetBlue will suddenly devaluate its points, as we have seen in many times in the airline/hotel industry. That is exactly the reason why we always recommend miles/points cards with transfer partners over those affiliated with a certain airline or hotel chain, as the former is much more devaluation proof than the latter.
Barclays Wyndham Visa with $69 Annual Fee is another surprise. This card earns 5x Wyndham Rewards points on Wyndham purchases and 2x everywhere else. Since Wyndham had a dramatic revamp of its loyalty program in May 2015 to offer a free night at any of its hotels for 15,000 points, our value of Wyndham points has been around 1 cent a piece. As this card offers an annual bonus of 6,000 points, the annual fee is pretty much close to zero. Then if you have quite a few Wyndham stays, you will be able to beat 2% cashback cards, that is why this card is #5 on the Top Credit Cards for Rewards list. However, the same concern we shared in JetBlue Plus Card section applies here too.

Best Rewards Credit Card Combos
Theoretically you need way too many cards to maximize rewards - one for gas, one for groceries, one for dining, one for airfare, one for hotels, one for general spending, and so on. In real life, most of us can't manager that. That is why here we will recommend the best two-card combos that hand you much bigger rewards than a single card while still keeping things relatively easy to manage.

Fidelity Visa | Citi Double Cash + one category bonus cashback card: This combo is for people who love cash back! As presented before, Elan Fidelity Visa and Citi Double Cash, both with no annual fees and offer a straightforward unlimited 2% cashback, are extremley hard to beat. Of course, you may also consider Barclays Arrival Plus for 2.11% travel rewards and other added benefits come with the $89 annual fee. No doubt you will put most of your spending on one of these three cards. However, adding a 5% category bonus card will certainly get you more cash. You need to do your math and figure out which category you spend the most and how much you can earn by carrying an extra card. Say if you spend $500 each month on a 5% category, every year you will earn $500 x 12 x 3% = $180 beyond your normal 2% cash back by carrying this extra card. Some people may say "$180 is awesome! I am in." but some may say "For the hassle of remembering which card to use, I will pass." So it is totally up to you. Now let's look into the most popular bonus categories to give you some ideas: (a) Groceries: Amex Blue Cash Preferred ($75 annual fee, 6% on groceries for up to $6,000 spent each year) - to maximize cashback, you will spend $6,000 a year on groceries and the extra cashback you earn beyond 2% is $6,000 x 4% - $75 = $165; (b) Gas: PenFed Platinum Rewards Visa Signature ($0 annual fee, 5x points on gas) - if you monthly gas expense is $600, the extra cashback beyond 2% is $600 x 12 x 2.25% = $162; (c) Airfare: PenFed Premium Travel Rewards Amex ($0 annual fee, 5x points on airfare) - if your annual airfare expense is $8,000, the extra cashback beyond 2% is $8,000 x 2.25% = $180; (d) Chase Freedom or Discover it ($0 annual fee, 5% on quarterly rotating categories, up to $1,500 spent each quarter) - the annual maximum extra cashback beyond 2% is $1,500 x 4 x 3% = $180; (e) US Bank Cash+ ($0 annual fee, 5% on two categories you select, up to $2,000 spent each quarter) - the annual maximum extra cashback beyond 2% is $2,000 x 4 x 3% = $240.
Amex SPG + pick one from: Chase Sapphire Preferred, Amex EveryDay Preferred, Amex Premier Rewards Gold, Citi ThankYou Premier, or Citi Prestige: This powerful combo is for people who prefer miles/points to cashback. Similar to the cashback combo, you need to pick one from Sapphire Preferred, EDP, PR Gold, ThankYou Premier, and Prestige. We recommend putting general spending on Amex SPG since it has the highest return rate (=2.25%) among all four programs and obviously using Sapphire Preferred/EDP/PR Gold/ThankYou Premier/Prestige for their particular bonus categories. In addition, when purchasing items that may have price drop within 90 days such as electronics, we recommend Sapphire Preferred or Prestige for the Price Protection coverage. When shopping online, we recommend Sapphire Preferred for the extra points earned through Chase shopping portal. When traveling abroad, we recommend Sapphire Preferred, PR Gold, ThankYou Premier, or Prestige, for the waived foreign transaction fees and embedded EMV chip.
Amex EveryDay Preferred + pick one from: Chase Sapphire Preferred, Citi ThankYou Premier or Citi Prestige: You have to choose among Sapphire Preferred, ThankYou Premier, and Prestige as the second card. We highly recommend this combo as an alternative to the previous one, for the simple reason that the two cards complement each other in the bonus categories almost too perfectly. EDP offer highest return for groceries (4.5x, up to $6,000 spent each year) and gas (3x). Sapphire Preferred covers dining & travel (2x); ThankYou Premier covers travel & gas (3x), and dining & entertainment (2x); Prestige covers airfare & hotels & travel agencies (3x), and dining & entertainment (2x). So with this combo, you easily cover five to six categories with only two cards - that is a pretty amazing deal! As for general spending, EDP seems to return the highest rewards at 1.5x (=2.25%) on paper. However, all these three programs are worth considering due to their different coverage of transfer partners. Eventually, how you choose the cards is really up to which program you want to focus on and then the additional benefits they provide.
Chase Sapphire Preferred + Chase Freedom or Chase Freedom Unlimited: Sapphire Preferred is pretty big by itself if you value miles/points high enough. Adding Chase Freedom will give you an extra boost in points due to its 5x bonus categories. Even though Chase Freedom is always branded as a cashback card, it actually earn UR points. Normally you won't be able to transfer UR points earned through Freedom to frequent traveler miles/points since it is considered a lower tier UR product, limiting the value of a point at 1 cent. However, the secret here is that if you have a premium UR card such as Sapphire Preferred, you can transfer the UR points earned from Freedom to Sapphire Preferred account so all of sudden these points become transferable to miles/points. This hugely increases value of Freedom. Based on our current value of UR points at 1.5 cents a piece, Freedom returns 7.5% value for its quarterly rotating bonus categories! To maximize rewards, you need to remember to sign up each quarter for Freedom's bonus categories and use Freedom for those categories. The last thing to bear in mind is that there is a quarterly $1,500 spending cap for 5x bonus categories on Freedom, so if you do everything exactly right, you will be earning an extra 24,000 UR points a year (1,500 x 4 x 4 = 24,000) by adding this non-fee card to your wallet. In April 2014, Chase introduced the new Freedom Unlimited, which carries no annual fee and earns 1.5x points everywhere. The secret of Freedom Unlimited is exactly like Freedom's - when paired with Sapphire Preferred, all UR points earned with Freedom Unlimited suddenly becomes miles/points transferable and the general spending returns an impressive 2.25% cashback equivalent. When using this combo, you put most spending on Freedom Unlimited while keeping travel & dining on Sapphire Preferred. If you annual general spending is $50,000, by adding Freedom Unlimited to your wallet you will earn an extra 25,000 UR points each year. Lastly, of course, if you don't mind having three cards in your wallet, take all three to make amazing UR triplets.

Best Business Rewards Credit Cards
Until now we have been discussing personal credit cards, and we think we also need a list of for small business owners.

Since we don't have a business card version of Fidelity Visa, Citi Double Cash, or Barclays Arrival Plus WEMC, the best cashback business card is Capital One Spark Cash, which offers unlimited 2% cashback with a $59 annual fee (waived for the first year).
Chase Ink Plus ($95 annual fee, waived for the first year) offers a very strong 5-2-1 earning structure: 5x points on office supplies, wireless services, landline communications and cable services (up to $50,000 in purchases each year), 2x points on gas & lodging (also up to $50,000 each year), and 1x everywhere else.
Amex SPG Business Card ($95 annual fee, waived for the first year) shares all features with the personal version (thus returning 2.25% for general spending) except that it actually adds Sheraton Club access which is a great perk when you stay at a Sheraton hotel with a lounge.
Amex Business Gold Rewards ($175 annual fee, waived for the first year) mimics the popular 3-2-1 earning structure from the personal version. It allows you to select one of the following 5 categories to earn 3x points, up to $100,000 in purchases each year: airfare, U.S. gas, U.S. advertising, U.S. shipping, and U.S. computer (select hardware, software, and cloud computing providers), and 2x points on one of the remaining 4 categories, also up to $100,000 in purchase each year, and finally unlimited 1x everywhere else.
Barclays JetBlue Business Card ($99 annual fee) shares almost the same features as JetBlue Plus Card except that grocery stores is replaced by office supplies in the 2x bonus categories.