The best rewards credit cards

Sep 06, 2012 6:15 AM by Kat Robinson

Posted in Living / Money and finance

Ah, living the good life. Imagine vacations filled with free airfare, hotel suites paid for with credit card points and a concierge at your fingertips to fulfill your every need. With the following rewards credit cards, we are fairly certain your wish can be granted. We break down the best rewards credit cards currently on the market and give you our verdict on each one. All three are drool-worthy. But if you find yourself with a good-to-excellent credit score, one of these rewards credit cards may just be the right addition to your wallet.

American Express Platinum Card

The American Express Platinum Card could be described as the Bentley of rewards credit cards. Its exorbitant annual fee wards off most consumers but for those who remain the American Express Platinum Card offers luxurious travel benefits, pristine 24/7 concierge service, and exclusivity in addition to typical American Express benefits like purchase protection and baggage insurance. Most of the rewards from this card come from the fabulous travel benefits for those who demand luxury.

Pros

Complimentary and unlimited first-class airport lounge access
Immediate and complimentary hotel room upgrades, complimentary breakfast for two and a $100 resort credit at many four-and-five star resorts across the globe
Complimentary companion tickets on first-class international flights
Complimentary Global Entry
$200 annual airline fee reimbursement on most charges like checked baggage fees, food, etc.
Flexible spending limit

Cons

Must have an excellent credit score and high income
1 percent conversion ratio of points to dollars
Charge card: Balances must be paid in full each billing cycle
Annual fee of $450/NOT waived for the first year

Bottom Line: The benefits for the American Express Platinum Card center on its luxurious travel rewards. Those who travel in style — even lightly throughout the year — will likely see a return on their annual fee investment with hotel room upgrades, first-class lounge access and airline fee reimbursements. However, this card requires an excellent credit score, a high annual income and that you pay off all charges in full each month. If you meet all three criteria and love to travel the American Express Platinum Card is an excellent choice.

American Express Premier Rewards Gold Card

The American Express Premier Rewards Gold Card is a bit like the younger sibling of the American Express Platinum Card. With a much lower annual fee, the American Express Premier Rewards Gold Card attracts consumers with its substantial rewards points that are great for the every day consumer. As with the American Express Platinum Card, the American Express Gold Premier Rewards Card offers additional and extremely valuable features like purchase protection, additional baggage insurance and 24/7 access to a dedicated concierge team. Most of the rewards from this card come from the quick accumulation of points.

Pros

25,000 bonus points after spending $2,000 in the first three months
Triple points on airfare/double points on gas and groceries
Exclusive travel, concierge and retail benefits
Flexible spending limit

Cons

Must have a good-to-excellent credit score
1 percent conversion ratio of points to dollars
Charge card: Balances must be paid in full each billing cycle
Annual fee of $175/waived the first year

Bottom Line: The American Express Premier Rewards Gold Card is meant to attract consumers with great credit who desire higher-end benefits but are unwilling to pay the extremely high annual fee of the American Express Platinum Card. The American Express Premier Rewards Gold Card is a great choice for those willing to pay a fairly high annual fee and their balances in full each billing cycle. If that sounds like you then be prepared to reap the many benefits that come with the American Express Premier Rewards Gold Card.

Chase Sapphire Preferred

The Chase Sapphire Preferred card is administered through Chase bank and is a Visa Signature credit card. Fans of the Chase Sapphire Preferred credit card highlight its generous new account bonus and higher rewards points conversion rate of 1.25 percent. The Chase Sapphire Preferred credit card comes close to the benefits of the American Express Premier Rewards Gold Card but maintains its account type as a revolving line of credit, which allows account users to pay for purchases over time. However, a major detractor of the Chase Sapphire Preferred credit card is its high interest rate on purchases despite applicants’ excellent credit scores. Most of the rewards from this card come from the quick accumulation of points without having to pay off balances in full each billing cycle.

Pros

40,000 bonus points after spending $3,000 in the first three months
20 percent return in points when redeemed through Chase Ultimate rewards website
7 percent points dividend on annual purchases
Double points on airfare when purchased through Chase Ultimate rewards website
Visa Signature with access to premier benefits in travel, entertainment and shopping
No foreign transaction fees

Cons

Must have an excellent credit score
1.25 percent conversation ratio of points to dollars
High interest rate
Annual fee of $95/waived the first year

Bottom Line: If you are hesitant about a charge card, then the Chase Sapphire Preferred credit card is a good choice. Its benefits come very close to that of the American Express Premier Rewards Gold Card but with the option to pay charges over time rather than in full at the end of each billing cycle. The low annual fee and generous sign-up bonus are attractive to consumers who look to make the most cost-effective decision when it comes to selecting a rewards credit card. On the other hand, if you plan to pay off your purchases in full every month then you lose out on the unparalleled benefits of American Express.

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Tags: credit cards financial planning

Comments

Comments on "The best rewards credit cards"

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The Chase card seems ok, but all the other seem too expensive with all the fees and what not. The most important thing to remember with credit cards is to pay them off every month. If you do that, you don't have to worry about interest rates (since you won't be paying it)...just make sure you do it!