How to choose a credit card to maximize your rewards

Not all cards are created equal.

Not all credit cards are created equal, and it’s important to weigh your options before opening a credit account. First, and most importantly, you should choose a card that aligns with your spending habits and rewards you in a way that matches your lifestyle – you wouldn’t want a card that rewards you heavily in airline miles if you rarely travel, for example. And you probably shouldn’t open a card with a high APR if you typically carry a balance or you’re planning on consolidating your debt through a balance transfer to another card. Consider what you want a credit card to do for you before diving in headfirst. 

Goal: Maximum rewards

Most high-reward credit cards come with annual fees of some sort, ranging from well under $100 to several hundred dollars, depending on the perks of the cards. A card like this is especially great for travelers, as they often come with statement credits for things like TSA, airline baggage fees, or ride services like Uber or Lyft. Maximum rewards cards also typically give rewards on travel purchases like airline tickets, rental cars and hotel stays. It’s worth noting that you need very good to excellent credit to get approved for many of these kinds of cards. Navy Federal Credit Union’s Flagship Rewards Card might be just what you’re looking for here. For a low annual fee of $49, you get 3x points on travel, 2x points on all other purchases, and up to $100 in statement credits for TSA PreCheck or Global Entry. Top that off with no foreign transaction fees or cash advance fees, and you’re primed for travel.

“If you’re a frequent traveler, live on the go or are booking a vacation, you have everything to gain from taking full advantage of the benefits and rewards of your credit,” said Justin Zeidman, manager of credit card products at Navy Federal. “Understanding your credit card’s reward system can help you not only rack up points faster along the way but can also save you money on vacation costs and even everyday expenses.”

Goal: Consolidate debt

If you’re carrying a larger balance on a high-APR card and want to pay it off over time with fewer penalties and interest, transferring your balance to a low-APR card just for that purpose can be the way to go. Many financial institutions offer low APR cards with zero fees for balance transfers, making them an easy way to help you consolidate credit card debt with less risk. These cards don’t generally offer much in the way of rewards, but a lower interest rate can be worth its weight in gold if you’re chipping away at debt.  

Goal: Get rewarded for everyday purchases  

Cards like these are the meat and potatoes of credit accounts. No high annual fees or luxury perks — just simple rewards on your everyday purchases like groceries, gas and dining, and a low APR to boot, generally speaking. These types of cards are great if you’re not working toward any major credit-building goals but want to earn rewards from the things you do every day. Navy Federal has an American Express card that fits the bill. Their More Rewards Card was voted one of the best rewards credit cards by GO Banking Rates in 2019 for its low APR, no annual fee and no limits on the number of rewards you can earn on your purchases. 

“Whether you’re grocery shopping, filling your car with gas, eating out, or ordering in, you’ll earn up to three times the points,” adds Zeidman. “The ideal credit card is one that rewards you for things you’re spending money on anyway, so cards that earn you points on everyday purchases can help you rack up rewards faster than you might think.”

Goal: Keep building your credit

A secured credit card is a great stepping-stone for people who are rebuilding credit or have a limited credit history. Cards like this require a refundable security deposit when you open an account, as collateral of sorts. Your deposit typically serves as your credit limit. Both of these factors make you less of a risk to the institution you’re banking with. Good credit behavior over time may get you approved for a card with a higher credit limit and more rewards. Navy Federal Credit Union’s nRewards card was voted Best Military Credit Card for Building Credit by WalletHub in 2021. Unlike some secured cards, you can earn rewards on every purchase — one point for every dollar you spend. You can turn your rewards back into merchandise, gift cards, or cash. 

It may be tempting to open multiple credit card accounts, especially when you get bombarded with offers and promises of endless rewards. Taking the time to consider how you want your credit card to work for you will help you capitalize on the kind of rewards that you want and continue to meet your financial goals.  

This article is sponsored by Navy Federal Credit Union.