The Best Cash Back Credit Cards
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Many people prefer cash back rewards to other credit card perks such as frequent flyer miles. Cash rewards programs are simple to understand and easy to redeem. Unlike points and miles, cash can earn interest when unused and its value is not subject to the constantly changing terms and conditions of credit card issuers and travel programs. (See also: How Cash Rewards Credit Cards Really Work)
My family is a perfect example of how you can use credit cards to receive cash back. Using our cards for day-to-day purchases, we may spend as much as $2,500 on them each month. When we are not looking for travel rewards, we use cash back cards that return between 1%-6% on our everyday purchases in order to earn an additional $80 a month in cash back. That equals a return of $960 each year that we can add to our discretionary spending or apply to our savings.
Just one word of caution — cash back credit cards should only be used by people who can pay their credit card balances in full and on time. To do otherwise virtually ensures that you will owe more in interest and penalties than you will ever receive as cash back.
The Top Credit Cards Featuring Cash Back Rewards
Once you have decided to earn credit card rewards in the form of cash back, you should definitely consider my favorite cash back rewards credit cards.
Bank of America® Customized Cash Rewards credit card
The Bank of America® Customized Cash Rewards credit card offers 2% back at grocery stores and wholesale clubs, 3% back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement /furnishings, and 1% on other purchases. (Grocery store, wholesale club, and choice category bonus rewards apply to the first $2,500 in combined purchases in these categories each quarter, then purchases receive 1% cash back.) Change your category up to once a month, depending on your spending. There is no annual fee.
Bonus offer: $200 online cash rewards bonus after you spend at least $1,000 in purchases in the first 90 days of account opening.
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express offers the highest cash back you can get for groceries. Earn 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, 1% after that), as well as 6% on select U.S. streaming services. 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more). The annual fee is $0 for the first year, then $95. See Rates & Fees.
Welcome offer: Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
Terms apply.
Click here to learn more and apply for the Blue Cash Preferred® Card from American Express today!
While not as exciting as redeeming rewards for travel, the value in getting cold, hard cash is not to be underestimated. There's no value in collecting travel rewards if you don't end up using them. With cash rewards, you know you'll always be able to use your points. Start collecting your cash rewards today!
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
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Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
My whole family uses Vanguard for investments. But I've heard good things about Fidelity as well. Maybe this card reward will give me the incentive to finally give them a look.
Citi Double Cash MasterCard is probably superior to the Fidelity AmEx for most people since both can net you 2% rewards, but MasterCard has wider acceptance at merchants.
There are some other good cash back cards to consider, such as those from PenFed. You might want to try the reward calculator at CreditCardTuneUp. com to see which could pay you the most for your expenses.
"Capital OneLike the Fidelity card, Capital One also offers a 2% cash back rate, but in a Visa that is more widely accepted than Fidelity’s American Express"
It's been a long time since I've run into any merchants who accept VISA but not American Express. I don't think that's a big concern
"Capital One also offers a 2% cash back rate" - for businesses only, right?
I find it interesting that this site is even talking about the use of credit cards. Many Americans are in debt because of the temptations to spend. They were and are able to spend because of the credit-card offers. The attractive logos, reward incentives, initial low interest rates, etc. have all been too enticing for many Americans to resist. I suggest that this site take a stand to "say no" to credit. Or, does "Wise Bread" receive money from the credit-card industry to survive???
Hi Steve,
Your concern is understandable. That is why Jason specifically warned in this article that only people who pay off their monthly balance fully should try cashback cards. He said this twice in the article.
I'm sure some people agree with your view that all credit cards are bad--in fact there are probably some Wise Bread writers who believes this as well, and I look forward to reading their rebuttal articles. =)
But that's the thing about Wise Bread. We're a group blog and we try to bring you a variety of views about personal finance.
I think certain people definitely should "say no" to credit. But that doesn't mean a personal finance website should never talk about the proper ways to maximizing credit card rewards.
Every major personal finance website picks and talks about rewards credit cards. Just a quick Google shows that Time Magazine, US News & World Report, MSNBC, New York Times and Lifehacker have written similar articles. Rewards credit cards is also a popular topic among most blogs.
And like all those news outlets and blogs, yes, Wise Bread is supported by advertising.
But that in no way affects our picks. We ask Jason--a credit card expert--to pick the best cards according to his opinion. We would never ask him to pick a certain card to appease an advertiser.
Do we make money off these articles? Yes. After Jason picks the cards and turn in his article, we then look at each program he picked to see if there are any affiliate links we can insert. Some of them do (like pick #5 Chase Freedom) and some of them don't have affiliate programs (like pick #1 AARP).
This is really no different from writing an article called 5 Best Personal Finance Books, and then adding amazon links to those books after the books have been selected.
I hope this answers some of your questions. It is our goal to help responsible consumers maximize their rewards from all financial instruments at their disposal. But of course we'll continue to write articles to help educate debt-laden readers on how to stay away from credit cards altogether and use cash instead.
Steve, I agree with your assessment of those who spent like children. Like it or not, credit is what makes the world go 'round and it's quite foolhardy not to establish a good line of credit. A person who is irresponsible with credit will be likewise with cash. People pay more and miss out in the long run without it.
You must know nothing about personal finance if you honestly think a discussion about credit cards and their benefits has no place on this site. I've been in finance for 30 plus years and I'll be the first to say that credit cards with incentives and rewards have been one of the best financial tools to ever be. There are many different ways to have a successful financial portfolio in today's economy. I have somewhere around 28,000 clients and I manage and review their financials. I would say the current trend is that easily 8 out of 10 of these clients share in common the proper use of credit. It would be foolish to say all of their success derives from the use of credit, however, it has played a major role in many cases. If you and I both go to the grocery store and spend the exact same amount of money, and you use cash and I use a rewards card, we leave having spent the exact same amount of money, and we leave with the exact same product to show for the money. But I leave having made the smarter financial decision, because I leave actually having spent anywhere from 2-6% less than you on the same stuff from the same store, all because of my method of payment. You say using credit cards is foolish. I say, when used properly, and understanding exactly how the reward program is structured, it's foolish NOT to use them. In summation, this site is pretty well geared towards giving solid, quality financial advise to its followers. I'm THANKFUL, the bloggers have refused to allow the immature, irresponsible behavior of many in regards to the use of credit cards, detour them from presenting the benefits of credit to those who aspire to financial success.
As a CPA with a background in bank audit, I am all about people using money wisely. However, people can blow their cash just as easily as overusing credit cards. Credit cards are a financial tool and taking them off the table is not a real strategy for success.
Credit cards have SECURITY: When I use my debit card, I am betting my bank account balance that the merchant won't be hacked. If I have fraudulent charges on my debit card, money is taken out of my account. Checks and automatic payments can bounce, and I can't get cash from an ATM. My bank will be very sorry and will work with me "quickly," but it could still be a couple of days before anything happens. Then I will have to get open a NEW account and re-do all the automatic transactions. Pain and frustration!
If my credit card is used fraudulently, I notify the credit card company and refuse to pay the unauthorized charges. They issue a new card and I work out of my bank account for a few days. The cash in my bank remains untouched. Much less pain and frustration.
Rewards cards are just gravy. I pay off my account each month (or more often, thanks to the internet) and don't buy what I don't need.
I talk to a lot of clients about saving more and very rarely is the credit card the reason they can't. My list: Cell phone plans, cable bills, eating out, financing a car for more than 3 years, etc. People see something and want it. Credit cards are the excuse.
Steve, this article is fantastic and it's sad that you don't understand the value of it. Many Americans are in debt because of the temptation to spend but that does not have anything to do with anything, and those people probably are not frequenting a site like Wise Bread. I fear you would have been a witch burner back in the day. And, if Wise Bread receives money from the CC Industry, then that's smart too.
I'm proud to be one of the "deadbeats" hated by the credit card companies.
I earn my cash back, never pay interest or late fees, and have zero loyalty towards companies. If I see a better deal I jump ship. Never considered the aarp card before though. Always thought there was an age limit. Thank you for the tip.
Thanks for the detailed choices you mentioned. The AARP will be getting an application from me, 5% is pretty good, better than what I'm using right now.
I am torn on this subject. For someone like me, very responsible with their money since I was just a child buying candy in a store, I could benefit from these cards. Most of my clients though, not so much. They would just be another way for either them or their spouses to dig themselves a bigger hole.
It is actually very easy to be Economically Intelligent if you have the will to resist stupid things. For example: A USB controlled Nerf Missile launcher for the office I seen at Staples the other day.... I mean really $20.00 bucks for that??
Very interesting list. I had never heard of the AARP card before. What is involved with becoming an associate member? Does it cost any money?
Currently I'm using Citibank Cash Back. Once the accumulated cash back reach $50, it will be credited into my credit card's account. Based on my monthly credit card expenses, I'm constantly received $50 in every 2 months. Definitely I will not go back to bonus or rewards type credit card.
The Discover More card isn't listed here, right now they have a 15 month introductory APR offer and a beastly 5% cash back in rotating categories. I've used Chase and Amex in the past, but I gotta say Discover's customer service is on point. The only downside to the More card is you only get .25% cash back outside the rotating categories until you spend $3,000 on the card. At that point you begin to get 1% cash back on all purchases - and of course the 5% cash back on quarterly categories always stays true. Just another card to consider.
I have a spark business card but rarely use it because I don't have many business expenses yet. I do like Capital One cards. Very easy to use.
Do you suggest/advise any CANADIAN credit cards for Cash Back?
I only know of one = RBC MC = Royal Bank of Canada M/C.
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ALSO
do you have an article or section on "Balance Protection" on credit cards?
I'm finding all my credit cards (3), banks, frequently calling for me to sign up. Average cost per month $9.95 + tax (12% in BC Canada).
I never! Carry a balance, so no reason to call I didnt think.
But they put the "SCARE" tactic into you, asking "how would you pay for your c. Credit if you were in hospital & cannot work? Or if you are laid off suddenly?"...
What would you advise?
I'm sure they must have "Balance Protection" or similar in the USA as well.
(they assure you that they will cover the minimum balance paid, to protect your credit score. While hospitalised or unannounced, god forbid!).
Thank you,
Karen Elstone
Vancouver BC
Canada
PS: I read your site all! time time very helpful & forward to my Canadian friends!
I'm reading this article on 3/08/13. The US Bank Cash+ doesn't offer 5% back on airfare. Did it when this article was originally written and posted?
I tried to apply for a better rewards card but many of the high rewards cards have a minimum income that is higher than the 49K that I made last year. I have an excellent credit rating but they only looked at my income not my credit score or my other assets.
I've researched this subject to no end. Here's my NO ANNUAL FEE results, and what I personally use: 1. American Express Blue Cash Everyday 2. DiscoverIT 3. Chase Freedom. Signing up for these cards will get you several hundred dollars in free bonuses as well.
You forgot to add Capital One's Quicksilver, that's the best card as well on the market. 1.5% cashback on each purchase.
I have the Discover It and Chase Freedom. Both cards are great for earning cash back without annual fees. Lately, I've been receiving many balance transfer checks/offers from both cards which I actually used to consolidate my credit card debts without paying any interest for up to 18 months!
I'm trying to compare cards where the redemption basically goes back to your bank account. I use several different credit cards now but would love to consolidate and be able to get money back and funneled back to my savings to add to my kids college fund. A few seemed to be possible contenders: Chase Freedom, Fidelity, and US Bank. Any recommendations between those?
You forgot Fidelity Amex. 2% cash back on all purchases with no limits.
Why is a person resident in London UK unable to apply for any of these credit cards?
There is absolutely no reason to even consider the Capital One Quicksilver when the Citi Double Cash is an option.
It's a Visa card with no annual fee and no foreign transaction fees, so it's a nice card to have when traveling or making purchases in another currency.
You need to do little more research..........Upromise no longer does the exxon/mobile gas cash back as of this past June. I know because I've been a long time card carrier and user and now plan to cancel my card based on the change.
B Ferguson
My one question whenever I see these articles is:
How can rewards be used? I am a long time Discover user, and I am used to being able to convert $40 cashback to a $50 gift card. With the extra 5% from quarterly categories and the extra cashback (up to 15%) when shopping through their site, and the occasional extra cashback offers (like , for example, $100 extra if you spend $2000 every month for 4 months), I accumulate quite a healthy cashback amount each year. Then we take that cashback and get gift cards for places we were planning to shop at anyway, usually with a 20% bonus.
We are looking for a 2nd card, but want to know that it will provide a great deal overall. We were signing up for the Amex, when we saw that it had a foreign transaction fee. So that was a no go. Would love to see the descriptions include more about redemption options!
Thanks.
10/13/2015
There is no better card than the Discover It. None of these other cards lets you use the cash back as anything other than a lousy statement credit. Discover is leaps and bounds better. The BoA cash rewards looks good if one needs a Visa or Mastercard card for international travel that doesn't accept Discover.
When I'm not using my BOA travel rewards card, I love using the Discover it card. Their rotating 5% categories and their Discover Deals portal help me get large cash back amounts than any of these other cash back cards combined. $0.01 redemption minimum. Plus I get a free FICO score, no annual fee, and no foreign transactions fee (too bad only Canada, China, and Japan accept Discover outside of the USA). Only negative is they process their transactions very slowly. Think grandpa speed.
Do you get paid by AMEX? If not, please explain why a card with an annual fee can find it's way on your list? Annual fees completely defeat the purpose of cash back rewards. I noticed your list didn't include the Discover It card. Why? They have cash back rewards that don't have to be used as a statement credit. With their gift cards and/or Discover deals a person can easily double the cash back. This article seems sketchy.
The Blue Cash Preferred is extremely popular and the 6% cash back on groceries will get you more cash back than the no-annual fee version, if you are able to max out on it. For example, if you go up to the $6000 limit, you'll get $360, minus the 95 annual fee you'll still net $265 per year. If you use the Blue Cash Everyday that gives you 3% cash back up to $6000 in purchases, you'll net $180. We didn't put either of the rotating 5% cash back cards (Discover It and Freedom) because the categories aren't set every quarter, so it's hard to know for sure that you'll be able to take advantage of it. We would certainly recommend them for an extra card to carry around, but for someone looking for the most useful cash back cards for everyday purchases, we feel this list covers it.
My favs:
Everyday- USAA limitless cashback CC: 2.5% everywhere, no restrictions
Grocery- Blue preferred cash back-6%
Gas- USAA Amex- 5%