The Best Rewards Credit Cards

Avoiding reward credit cards just because of annual fees might be a mistake for certain types of consumers who could benefit because of their lifestyles, according to a new analysis.

Avoiding reward credit cards just because of annual fees might be a mistake for certain types of consumers who could benefit because of their lifestyles, according to a new analysis.

Unfortunately, figuring out how much cash or rewards you earn on a rewards credit card is beyond most people because of the complexity of the credit card companies’ formulas. Luckily Consumer Reports Money Lab surveyed 53 cards and evaluated them.

Consumer Reports’ survey took into account the total costs of carrying and transferring a balance and estimated the rewards consumers could earn based on spending patterns and picked the best cards for three types of users: those who want cash rewards, those who want travel rewards and those who carry a balance.

In the cash rewards category, Consumer Reports assumed that families were spending $400 a month on gas, $600 on groceries and $1,000 elsewhere. For travel cards, it was assumed families were spending $400 a month on gas, $600 on groceries and $1,000 elsewhere. For the balance-transfer/low-rate cards, Consumer Reports picked cards that were good deals for consumers who wanted to transfer a balance of $10,000.

Here are the three best cards in each category, according to Consumer Reports.

Cash Rewards

Card type: American Express Blue Cash Preferred

APR on purchase: 0% for 12 months, 17.24% to 22.24% after

Cumulative rewards over 12/24/36 months: $770/$1,390/$2,010

This card also offers 6% back at supermarkets, 3% back on gas and at department stores and 1% back everywhere else. This specific card has an annual fee of $75, but there is a version with no annual fee that pays lower rewards.

Card type: Fidelity Rewards American Express

APR on purchase: 13.99%

Cumulative rewards over 12/24/36 months: $480/$960/$1,440

Consumers will get 2% back and points not only be redeemed for merchandise or cash, but can also be deposited into a Fidelity IRA, 529 college-savings plan, or brokerage account.

Card type: Capital One Cash Rewards

APR on purchase: 0% for 12 months, 12.9% to 20.9% after

Cumulative rewards over 12/24/36 months: $460/$820/$1,180

Travelers will enjoy the fact that this card has no foreign-transaction fee. You get 1% back on all purchases, but you also get a 50% cash bonus at the end of the year, which equates to 1.5% back on all purchases.

Travel

Card type: Chase Sapphire Preferred

APR on purchase: 15.24%

Cumulative rewards over 12/24/36 months: $850/$1,200/$1,560

For every $1 spent for travel and dining, consumers get two points and one point for every $1 spent elsewhere. The $95 annual fee is waived the first year (there’s a no-annual-fee version that pays lower rewards) and there are no foreign transaction fees.

Card type: American Express Blue Sky Preferred

APR on purchase: 0% for 12 months, 17.24% to 22.24% after

Cumulative rewards over 12/24/36 months: $760/$1,320/$1,880

Two points are rewarded fro each $1 spent on dining, hotels and car rentals, and one point is rewarded for each $1 spent on flights and elsewhere. The annual fee is $75 and there’s a version without an annual fee that pays lower rewards. Consumers get $100 annual airline allowance for baggage fees, leg-room upgrades and in-flight purchases.

Card type: Capital One Venture Rewards

APR on purchase: 13.9% to 20.9%

Cumulative rewards over 12/24/36 months: $580/$1,000/$1,420

Every $1 spent gives two points and the $59 annual fee is waived the first year. The no-annual-fee version pays lower rewards, but includes 0% purchase APR for one year and 10,000 bonus points. Both versions have no foreign-transaction fee.

Balance-Transfer/Low-Rate Cards

Card type: Chase Slate

APR on balance transfers and purchases: 0% for 15 months, 11.99% to 21.99% after

Transfer fees and interest costs over 12/24/36 months: $0/$910/$2,110

According to Consumer Reports, as long as you pay off your balance within 15 months, this is the cheapest balance-transfer card. Any transfers within the first 60 days aren’t subject to any fees, but there’s a 3% fee on later transfers.

Card type: Citi Diamond Preferred Card

APR on purchase: 0% for 18 months, 11.99% to 21.99% after

Transfer fees and interest costs over 12/24/36 months: $300/$910/$2,110

For the first 18 months there is no balance transfer fee, and after that the fee is 3%.

Card type: PenFed Promise Visa (membership in Pentagon Federal Credit Union required)

APR on purchase: 7.49% for 36 months, prime rate after (currently 9.99%)

Transfer fees and interest costs over 12/24/36 months: $500/$1,000/$1,500

Plan on taking more than two years to pay off your card? This is the best option since it offers 4.99% on balance transfers for life.

Read more:

The Best Credit Card for You