How to choose a bonus credit card

A rewards credit card can be an easy way to get something back for the things you buy.

Whether you’re getting cash back on groceries, frequent flyer miles, or points on dining out, it all means the same thing: you’re getting back a portion of what you’ve spent.

But with so many bonus cards, how do you choose the right one? Here are some tips on how to find the best option for you.

Is a bonus card right for you?

Before you start shopping for reward credit cards, first ask yourself if this is what you need.

For example, getting a bonus card might be right for you if you:

• Have a good credit score. A higher credit score may make it easier to get cards that offer premium rewards, features, or other benefits.
• Pay off your balances. Paying off your balance in full each month can help you avoid interest charges. This means that interest does not eat into the value of the rewards you earn.
• Get a signup bonus. Many bonus cards offer an introductory signup bonus. If you can qualify for a welcome bonus, this can be a quick way to earn extra rewards in the first few months after opening an account.
• Expenses in certain categories. Some rewards cards have flat rate rewards, while others have tier rewards, which means you’ll earn more points, miles, or cash in certain categories than others. It may make sense to choose a card with reward levels that suit your spending habits, rather than a card with a fixed rate or no rewards at all.
• Loyal to certain brands. Brand loyalty can work in your favor when you use a rewards card. For example, you can achieve elite status or unlock special discounts or benefits using a co-branded hotel or airline card.
• Plan your trip: Travel isn’t always cheap, but travel credit cards can offer an easy way to save money. For example, earning miles or points for purchases could mean free flights or free stays.

If you can check each of these boxes, opening a bonus credit card might make sense for you.

On the other hand, getting a reward card may not make sense if you plan to use your card only as a backup source of emergency funding or you are not interested in rewards. You may also want to consider a 0% introductory APR balance transfer card if your goal is to consolidate high interest credit cards.

Questions to ask yourself before choosing a bonus card

The field for reward cards is wide and the number of options can be a little intimidating. But you can narrow down the possibilities by asking yourself a few simple questions.

Do you prefer to keep things simple?

As already mentioned, some bonus cards offer a fixed reward rate for purchases. For example, you can get 2% cashback or unlimited Double Miles on everything you spend.

Other cards offer tiered rewards. So you can earn 5 or 6 percent on groceries and 3 percent on gasoline, for example.

And some cards offer rotating bonus categories. With this reward structure, you can earn 5 percent of restaurant purchases up to $1,500 you spend in a quarter. After the start of a new quarter, a 5% remuneration rate is applied to another category of purchases.

If you prefer to keep it simple, fixed rate rewards may be the way to go. Evaluating how much you can earn in rewards per year with each type of card can help you decide which option might work best.

How do you spend your money?

Finding a bonus card that matches how you spend is the key to making the most of your rewards. For example, if you mostly charge for groceries and gas every month, it might not make sense to get a card that rewards you for booking trips.

So, look at how you usually spend. An easy way to do this is to review your bank account or credit card statements for the last 6-12 months.

As you view your purchases, group them into categories. There might be one for groceries, one for gas, one for lunch, one for travel, one for shopping, and one for miscellaneous purchases.

Grouping expenses in this way can help you decide which type of bonus card might work best for you. Depending on how you spend them, you might even think it makes sense to have more than one card (like a cashback credit card for groceries, a miles card for travel, etc.).

Are you a foodie?

Some bonus credit cards are designed specifically for gourmets. Their rewards programs tend to be built around what foodies most often spend money on. This means things like restaurants, food delivery services, and groceries.

If you’re part of a gourmet set, you might want to consider a card that caters to its rewards based on how you spend.

How do you travel?

Travel can be rewarding, but the right rewards card can make those purchases less taxing on your budget. When choosing a reward card, it’s helpful to consider how often you like to travel and how you book your travel plans. If you are new to travel, you can start with a basic travel card.

For example, if you prefer to travel by plane, you might lean towards a rewards card that offers miles or points on purchases. The more miles you earn, the more free flights you can take.

You may want a card that rewards you on all your travel purchases if you rely on car rentals or prefer to cruise or travel by train. Just check for exceptions first, as some cards have a narrower definition of what constitutes a journey than others.

Do you have a preference for certain airlines, retail or hotel chains?

Brand loyalty can pay off if you use a rewards card that offers rewards or other benefits for flying with a certain airline, shopping at certain stores, or booking rooms at certain hotel chains. If you naturally prefer one brand over another, your bonus card selection may reflect this.

On the other hand, you may want to use a card that is not brand-specific if you don’t always select the same airlines, shops, or hotels. For example, you might look for a travel rewards card that offers points that you can transfer at a 1:1 ratio to frequent flyer affiliate programs. This way, you won’t miss a single chance to use your rewards.

Other Bonus Card Benefits You Should Pay Attention to

When comparing credit card rewards, the rewards program may be your main focus. However, it is important to look beyond the rewards and consider any other features the card has to offer.

Below are some of the features and benefits you can get with a bonus card:

The more benefits a card gives, the more value it can have. Whether these benefits are personally valuable to you depends on how likely you are to take advantage of them.

Thus, frequent travelers can appreciate airport lounge access or free luggage check-in. The everyday shopper may be more interested in purchase protection or an extended warranty. By looking at the bigger picture with reward cards, you can appreciate how much this could cost you.

What to look out for

When comparing bonus cards, don’t forget to look at fees and annual percentage rate (APR). The biggest fee you can pay is the annual fee. Some cards waive this or charge $0 the first year, while others apply it straight away.

If you’re considering an annual card, ask yourself how quickly you can get it back as a reward. Ideally, you earn more than enough rewards each year to offset the commission. Or at least the card provides benefits that offset the fees.

Beyond the commission, check the annual interest rate that applies to purchases so you know how much you can pay if you have a balance each month. If the card has an initial annual interest rate for purchases or balance transfers, make sure you know when this promotional period ends. That way, you’ll know how much time you have to pay for purchases or transfers before the normal annual interest rate kicks in.

bottom line

If you want to get something back when you spend, bonus cards can be a great addition to your wallet. The choice shouldn’t be difficult if you ask the right questions and do your research.

CardMatch can help you determine which cards you qualify for without compromising your credit score. The next step is to compare cards to find the best combination of rewards, features and benefits for your needs.