What Credit Card Earns the Most Rewards? Part 1: Introduction

The standard credit card usually offers 1% cash back or 1 point per dollar spent. Some credit cards can earn even more. Given that the average family spends over $48,000 each year and let's estimate that 2/3 of those expenditures are paid with credit cards, then earning 1% more on purchases can add up to an additional $320 each year. Below I'll discuss what cards are out there for those that want to maximize the card rewards you earn.

Beware! Hunting for additional credit card rewards only makes sense if you're paying your credit card bill on time and in full as the average APR for credit card debt is about 15% and frequently can be more than double that, while credit card rewards don't get much higher than 2%.

What cards do I use? I use to keep 4 credit cards on me to fully maximize my rewards as much as possible. I've since decided to go with 2 as the hassle of carrying more items in my wallet, paying more credit card bills each month, and managing additional card rewards redemptions wasn't worth the slight increase in payout.

I use the Fidelity Investment Rewards American Express card and Chase Freedom Visa card.

The Fidelity AMEX is my daily spending card as I earn 2% cash back rewards on all purchases with it. As long as the merchant accepts American Express I don't have to think about how many rewards I'll earn on my purchase. Each month in which my rewards total is over $50, the rewards simply deposit into my Fidelity Checking Account. That's potentially the only extra step for this card, is that to earn the rewards you need a Fidelity Account to deposit it in, but you can choose between a Checking Account (Fidelity calls it a Cash Management Account), Brokerage Account, 529 account, or a Retirement account - the first 2 of which I know are free to open up and maintain. There's no annual fee either for this card.

The Chase Freedom Visa is my backup card for all merchants that don't accept American Express or if I make a purchase in a spending category that's part of Chase's 5% rewards for that season. Each season Chase will rotate what categories earn 5%. Currently, those categories are Gas Stations, Theme Parks, and Kohl's. You can see what future categories are here. Note that before each new category period you do have to activate these 5% rewards by clicking an activate button online, though you can sign up for an email or text reminder so you don't miss out. Additionally this is a Visa Signature Card which offers other benefits such as additional warranties on purchases, travel benefits or even buy one get one movie tickets in the summer. This card also has no annual fee.

In my next post I'll delve deeper into high rewards cards that are currently available.