Free, helpful information about Card Guides and related Award Credit Card topics.
Get clear and easy-to-understand details about Award Credit Card topics and resources.
Answer a few optional questions to receive offers or information related to Card Guides. The survey is optional and not required to access your free guide.
An award credit card (often called a "rewards card") is a credit card that gives you points, miles, or cash back on purchases you make with it. Instead of earning nothing on your spending, you accumulate benefits that can be redeemed for travel, merchandise, statement credits, or other perks. The goal is simple: reward you for using the card.
When you use an award credit card, you earn currency—typically at a rate of 1 to 5+ points (or miles) per dollar spent, depending on the card and the category of purchase. These earnings accumulate in an account linked to your card, and you can usually redeem them through the card issuer's website or app.
The earning structure varies:
Redemption options differ too. Cash-back cards typically let you apply earnings directly to your statement or transfer to a bank account. Travel rewards cards may let you book flights or hotels through a portal, transfer miles to airline or hotel partners, or claim other travel-related benefits.
| Card Type | Currency | Typical Use | Flexibility |
|---|---|---|---|
| Cash Back | Percentage returned as cash | General spending; simplest to use | Very flexible; easy to value |
| Travel Rewards (Points) | Points redeemable for flights, hotels, etc. | Travel-focused spending | Moderate; depends on redemption options |
| Travel Rewards (Miles) | Airline or hotel miles | Frequent travelers with preferred carriers | Lower; tied to partner programs |
| Flexible Points | Points redeemable for multiple categories | Mixed travel and non-travel needs | Highest; can choose where to use them |
Several factors determine how much value you'll actually get from an award card:
Spending habits. A card with 5% back on dining only benefits you if you eat out regularly. Mismatched categories mean you're leaving rewards on the table.
Annual fees. Many premium award cards charge $95–$550+ per year. You need to earn enough in benefits to justify the cost, which depends on your usage.
Redemption value. Points and miles aren't fixed in value. A travel rewards point might be worth 0.5 to 2+ cents depending on how you redeem it. Cash back is straightforward—1% back equals 1% of your spending.
Introductory bonuses. Many cards offer extra points for spending a set amount in the first few months. These can represent significant value, but only if you'd be spending that money anyway—not to chase the bonus.
Your credit profile. You'll only qualify for an award card if your credit score, income, and credit history meet the issuer's requirements. Premium cards with better rewards typically have higher approval standards.
Before selecting an award card, consider:
Award cards can meaningfully reduce your effective spending if the rewards align with your real expenses. But they're only valuable when the benefits exceed any fees and match how you actually use credit.
