A few weeks ago, we wrote about ways you can earn free travel even if you’re not already a frequent flyer. Instrumental in that saving up enough miles for a gratis vacation is racking up the points using a travel rewards credit card.
Specifically, you need a rewards card that pays generously not just on travel purchases, but on everything.
A recent survey by Capital One revealed the largest ways customers felt credit card rewards programs could be improved. Topping the list at 52 percent was if they could earn the same amount of rewards on everything they bought, every day. Other top responses included:
- If earning rewards were simpler (no sign-ups, special categories, etc.) (42 percent)
- If the limits were removed on the amount of rewards they could earn (27 percent)
- If they were able to track rewards on a mobile device (18 percent)
With the exception for credit cards with particularly low interest rates designed for customers who want to save money on their balances, most credit cards have some kind of rewards component that will pay at least 1 point back on everything you buy.
That 1 percent reward rate is the bare minimum, but many cards are more competitive.
There are cash rewards cards like Chase Freedom and Discover it that pay 1 percent back on all purchases plus 5 percent back at certain stores that change throughout the year. (The amount of spending on which you can earn the bonus rate is usually capped, too). These cards are better than the standard, but the rotating bonus categories and spending caps are frustrating.
Enter cards that pay more than 1 percent on everything all the time. They do exist.
Take the Capital One Venture Cards, for example. The VentureOne card pays 1.5 miles on every purchase, period, with no annual fee. And for a $59 annual fee, the Venture Card pays double miles on everything. You can read a comparison of the two cards and when it makes sense to pay the annual fee here.
The Barclaycard Arrival Plus™ World Elite MasterCard® offers a similar benefit. For an $89 annual fee (waived the first year), you earn 2x miles on every purchase, end of story.
These cards require very good credit scores (you can check yours for free — no catch — here).
If your score is more in the average range, the Barclaycard® Rewards MasterCard® – Average Credit pays 2 points on gas, grocery and utility purchases plus 1 point on everything else, with no annual fee.
Next week we’ll talk about taking advantage of rewards credit cards while taking your credit into account. Contrary to what many people think, having a few extra rewards cards to maximize your points earnings doesn’t necessary have to negatively impact your credit score – but you have to handle the application and card usage right. Stay tuned.