The Best Rewards Credit Card of 2018

Rewards credit cards are everywhere.

You’ve got your airline rewards cards, hotel rewards cards, cash back cards, low-interest cards and luxury cars. Then there are the travel cards that get you a mix of all the different cards we just mentioned.

You can Google any of these topics and get the experts’ opinions on which card is best in each category, but what’s often missing is a hardcore ranking of the best rewards cards across all genres.

For example, there’s a credit card from Chase called the Sapphire Preferred that most people say is the absolute best travel rewards credit card. But how does that card stack up against a hotel card or a cash back card?

These are the questions we wanted to answer partly because we have an ever-growing curiosity about credit card rewards, and partly because we know the latest statistics show that if you have credit cards, you usually have four of them.

How do you pick those four? We think this guide will help you make those decisions.

Our methodology is simple. We’re going to judge the winners of our “Best Of” articles from airline rewards, hotel rewards, cash back, low-interest, luxury and travel. Then, we’re going to judge those six cards across five categories. Those categories are:

  1. Intro bonus
  2. APR
  3. Annual fee
  4. Ongoing rewards
  5. Cost savings

If a card finishes first in a category, it gets six points. Second place gets five and so on. At the end of the competition, we’ll add up each cards’ points and then rank them based on their point totals. The winner will be the rewards card with the most points.

So, here’s the list of the cards we’ll judge:

And here’s the chart we used to track each card’s characteristics:

  United MileagePlus Explorer Citi Double Cash American Express Hilton HHonors Surpass Citi Simplicity Chase Sapphire Preferred Chase Sapphire Reserve
1. Intro Bonus 40,000 miles 0% APR for 18 months 75,000 points 0% APR for 21 months 50,000 points 50,000 points
2. APR 16.99%-23.99% 14.49%-24.49% 16.24%-20.24% 14.49%-24.49% 16.99%-23.99% 16.99%-23.99%
3. Annual fee $95 None $75 None $95 ($0 first year) $450
4. Ongoing rewards 2:1 United buys, 1:1 on rest 2% cash back 12:1 at Hilton hotels, 6:1 on dining/grocery stores/gas, 3:1 on rest None 2:1 travel and dining, 1:1 everything else 3:1 travel and dining, 1:1 everything else
5. Cost savings over 2 years -$33.50 +$1,980 +$5,736 +$1,631 +$466 +$816

Context: We’re Talking About the Average American

Credit card rewards rankings tend to rely on things like dollar value per point, how many first-class flight upgrades you can get and which expensive hotels you can snag with rewards points.

While these are great metrics for a high-earning single person – they have the most money and the least expenses – it’s not a great way to judge a card’s value for the average American household that has an average income of around $56,000 and one or two kids.

It is within that context that we’ll judge each category because we believe this , applies to the greatest number of people. Also, when we get into the APR and the cost-savings, we’re going to judge cards based on the average person with a credit card.

According to ValuePenguin’s most recent stats, 41% of people with a credit card carry a balance and the average balance is around $16,000. This is an important thing to keep in mind because that high balance will have high interest charges and those interest charges negate the value of a card’s rewards.

For the sake our ranking system, we’ll assume that the cards in this competition will have an $8,000 balance; half of the average debt of people who carry a balance.

To calculate the cost on that, we’ll assume that you’re carrying an $8,000 balance every day of the year. While not precise, this method provides an average balance when you take into account payments you make as well as charges you put on the card.

And because we’re focusing on the average person, we’re going to double the points in the APR and cost savings categories because they have a tremendous influence on the value of the cards we’re ranking.

1. Intro Bonus Winner: Citi Simplicity

To calculate this category, we’ve determined the cash value of the intro bonus.

If there’s a 0% offer on the card, then we’ve calculated how much money the cardholder would save transferring an $8,000 balance from another card based on the national average APR of 13.76% on interest-bearing accounts.

If the card offers miles/points for flights or hotel rooms, we’ve calculated the cash value based on the average cost of a domestic flight ($351) and a hotel room in North America ($120):

  1. Citi Simplicity: $1,926.40
  2. Hilton HHonors Surpass: $1,800
  3. Citi Double Cash: $1,651.60
  4. Sapphire Preferred and Sapphire Reserve: $1,200
  5. United MileagePlus Explorer: $526.50

You might be surprised here by the results, but remember that we’re focusing on how interest rates affect the average American who has a ton of credit card debt.

So, when you consider how much interest you could save on an $8,000 balance, the Simplicity wins out here because it’s got 21 months of 0%, which saves you a ton of money on interest payments.

The Hilton HHonors comes in second because you can book 15 free nights at Category 1 hotels with your 75,000-point intro bonus. The cash equivalent of those nights escalates pretty quickly since we value each one at $120.

The Citi Double Cash gets third because its 18 months of interest free purchases and balance transfers saves you nearly $1,700.

We bumped the Sapphire Preferred and Reserve down to fourth because, while you get $1,200 in savings on hotel rooms (10 Category 1 stays at a Hyatt, no annual fee the first year), you only get an average savings of $702 when you use the 50,000-point bonus for domestic flights on United.

The United MileagePlus Explorer’s intro points are good enough to get you a round-trip flight and an additional one-way ticket, which totals out to, according to national flight averages, $526.50.

2. APR Winner: Citi Simplicity & Citi Double Cash

To determine the rankings in this category, we chose to go with each credit card’s lowest APR. Here’s the list:

  1. Citi Simplicity and Double Cash: 14.49%
  2. AmEx Hilton HHonors: 16.24%
  3. United MileagePlus Explorer, Sapphire Preferred, and Sapphire Reserve: 16.99%

Both Citi cards have the advantage of being in two genres that tend to have lower APRs than travel/airline/hotel cards.

The thinking is that travel-related cards are giving their cardholders a lot of free perks, so they have to make up for that by charging a higher APR.

This explains the big gap between the Citi APRs and the interest rates on the next four cards.

The Citi cards are, by far and away, the best cards in terms of APR, coming in at 1.75% lower than the AmEx Hilton card and a full 2.5% lower than the Chase cards.

3. Annual Fee Winner: Citi Simplicity & Citi Double Cash

The same principle that was at work in APRs is at work here. Travel-related cards tend to charge higher annual fees as a way of recouping some of the costs of giving out free hotel rooms, flights, and other perks:

  1. Citi Simplicity and Double Cash: None
  2. Chase Sapphire Preferred: $95, first year free
  3. AmEx Hilton: $75
  4. United MileagePlusAnnual : $95
  5. Chase Sapphire Reserve: $450

We decided to rank the Chase Sapphire Preferred above the AmEx Hilton because the free first year puts the card’s four-year annual fee total at $285, whereas the AmEx Hilton’s four-year total would be $300.

4. Ongoing Rewards: Chase Sapphire Reserve

Ongoing rewards is an important category because it influences the long-term benefits of a card. Is a card worth holding on to after the up-front and first-year perks are done?

Here’s our ranking for what each card gives you not just the first year, but in the years to come:

  1. Chase Sapphire Reserve: 3:1/1:1, $300 reimbursement, Priority Pass, Global Entry
  2. AmEx Hilton HHonors: 12:1/6:1/3:1 points, Gold status
  3. United MileagePlus: 2:1/1:1 points, free bag, priority boarding, two lounge passes
  4. Citi Double Cash: 2% cash back on purchases
  5. Chase Sapphire Preferred: 2:1/1:1 points
  6. Citi Simplicity: None

5. Cost Savings Over Two Years Winner: Hilton HHonors Surpass

This final category is one of the most important and that’s why we’ve doubled the scoring here. “Cost savings” is a simple equation: the cash value of the card’s benefits minus fees paid on an $8,000 balance in the first two years.

Even though the equation is simple, the math to get there is a little tough.

First, each of the travel cards has ongoing rewards that have cash value based on how many free flights or nights you can get.

Also, we put average yearly spending at $25,000 based on our research of average American spending habits on one vacation per year ($1,789), eating out ($3,000/year) and everyday expenses ($20,211).

Of course, you aren’t going to start out having an $8,000 balance. If you’re the average consumer, then that balance will build over time.

To calculate this, we assumed the average consumer will add $500 a month to their balance. So, we applied each card’s APR to that increasing balance.

With this methodology in mind, here are the results:

  1. Hilton HHonors Surpass: +$5,736
  2. Citi Double Cash: +$1,980
  3. Citi Simplicity: +$1,631
  4. Chase Sapphire Reserve: +$816 (-$44)
  5. Chase Sapphire Preferred: +$466 (-$1,360)
  6. United MileagePlus Explorer: -$33.50

The Hilton HHonors Surpass from AmEx is the clear winner here because you can earn around 315,000 loyalty points in two years, which equals 62 free nights at Category 1 hotels. Here’s the drawback: Hilton only has two Category 1 hotels in the U.S.

If you want more options, you’ll have to book a Category 2 hotel at 7,500 points. But even when you calculate the value with Cat. 2 hotels, the card still presents an overall two-year value of $3,216.

Citi’s two cards are second and third on the list because of the interest they save you if you transfer a balance of $8,000. The Double Cash gets the edge here because you’re earning cash rewards and that bumps up the value even though the 0% interest period is three months shorter than the Simplicity’s.

The two Sapphire cards landed in fourth and fifth based on their value when you redeem your points for hotel stays. The value of airfare redemptions is in parenthesis and, as you can see, the cards are the worst on the list.

If you choose to use your Chase Ultimate Rewards points for flights, then the Sapphire cards would cost you more money than the United MileagePlus Explorer.

Don’t forget, though, that we’re calculating the value of these cards based on the interest payments you’d pay on an eventual balance of $8,000.

We feel this is supremely important because many expert credit-card rewards sites judge a card solely based on its rewards. They don’t consider that around 40% of Americans carry an average balance of $16,000, making interest rates a crucial part of a card’s value.

The Winner and the Best Rewards Card of 2018: Citi Double Cash

We’re going to give you the straight truth. Most rewards sites will tell you that the Chase Sapphire Preferred or Reserve are the best rewards credit cards out there.

But, based on our calculations of rewards and interest rates and fees, we don’t see these cards providing anywhere near the value that you get with the Citi Double Cash.

Is the Double Cash a glamorous card with travel reimbursements and free entrance into airline lounges? No. But here’s our question: What good are all the rewards in the world if the interest on the card negates the value of any rewards you get?

Here’s the scoring that led to our choice. You’ll notice the bold scores where we double points for APR and two-year value:

Rank Card Points Earned in Each Ranking Category Points Total
1 Citi Double Cash 4, 12, 6, 3, 10 35
2 AmEx Hilton HHonors Surpass 5, 8, 3, 5, 12 33
3 Citi Simplicity 6, 12, 6, 1, 8 33
4 Chase Sapphire Reserve 2, 6, 1, 6, 6 21
5 Chase Sapphire Preferred 2, 6, 4, 2, 4 18
6 United MileagePlus Explorer 1, 6, 2, 4, 2 15

The Hilton HHonors Surpass and the Citi Simplicity tied for second but we think the Hilton card has more value than the Simplicity card because you can book more than 20 free nights a year with the points you earn on purchases.

The two Chase cards finished a distant third and fourth – their APR’s and lack of intro bonus value compared to other cards crippled these two perennial favorites. They’re great rewards cards if you don’t carry a balance, but they’re a cash drain if you do.

The United MileagePlus Explorer’s combination of limited bonus miles and its higher APR destined it for last place. However, keep in mind that both the Sapphire Preferred and Sapphire Reserve would have finished lower than the MileagePlus Explorer if you use those card’s points for flights on United.

Why Are These Rankings Important? Some Final Thoughts

Rewards credit cards are like CrossFit. If you do it the right way, then you can earn yourself a ton of benefits.

However, the average person isn’t ready for CrossFit because their body isn’t adapted to high-impact movements.

In the context of this article, travel rewards cards are the CrossFit of the rewards credit card world. They can produce some insane results and there is a growing number of rewards devotees who swear by all the stuff they get from utilizing rewards cards.

However, the average person isn’t ready for travel rewards cards because the average person has up to four credit cards and a combined balance of around $16,000.

Our rewards card rankings are important because they bring this average American into the light. Instead of recycling that all-too-familiar “Chase Sapphire Reserve and Preferred are the best” mantra, we’ve chosen to provide rankings that reflect the real world. And, in that real world, you probably have credit card debt.

Managing that debt requires dedication and planning. It requires a budget and goals. And once you have your debt paid off, you can take full advantage of travel rewards cards. But, until then, we believe the Citi Double Cash is the best option for your financial situation.

J.R. Duren

J.R. Duren is a personal finance reporter who examines credit cards, credit scores, and various bank products. J.R. is a three-time winner at the Florida Press Club’s Excellence in Journalism contest. He is a member of the Society of Professional Journalists and his insight has been featured on Investopedia, GOBankingRates, H&R Block and Huffington Post.

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