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The Best Cash Back Credit Cards
Not all cash back cards were created equal. And not everyone has the amount of time that we do to sift through and analyze which ones are the best. To help our readers out, we’ve identified the best general purpose cash back cards on the market and reviewed them below:
Blue Cash from Amex
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Pros: Excellent cash back rebates for bigger spenders Cons: Amex not accepted everywhere, rebate received annually vs. monthly |
The Amex Blue Cash card offers a tiered reward structure: For your annual purchases of less than $6,500, you’ll receive 1% cash back on “Everyday Purchases” and 0.5% cash back on all other puchases. For spending that exceeds $6,500, you’ll receive 5% cash back on “Everyday Purchases” and 1.25% cash back on everything else. American Express defines “Everyday Purchases” as those made at supermarkets, gas stations and drugstores.
Provided that you spend enough annually to make up for the substandard cash back at the lower tier of spending, this card is hard to beat. There are no other cards currently available on the market that can offer a 5% rebate on everyday purchases and 1.25% for everything else, especially as a non-promotional rate. Another advantage is that its rewards are uncapped, meaning that there are no limits to the amount you can earn–the more you spend, the more your rebate.
You will receive your rebate annually as a statement credit, rather than monthly, which is a minor negative. Another downside to the card is that it is an American Express, which means you won’t be able to use it in as many places as a Visa or Mastercard-branded credit card. Overall, however, we feel that these shortcomings are more than made up by its superior rebates.
Pentagon Federal Visa Platinum Gas Cash Reward
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Pros: Good rate of cash back, no foreign exchange fees added Cons: Requires membership in Pentagon Federal Credit Union |
PenFed’s cash back credit card offers 5% back on gas, 2% back on groceries and 1.25% 1% back on everything else. It has no tiers or caps, and your rebate is credited monthly automatically.
In addition, PenFed is one of the rare issuers that does not add any foreign exchange fees when making purchases in foreign currencies, making it a good card to carry when traveling abroad.
In order to get a card, however, you must be a member of the credit union. If you are not eligible to join through various military affiliations, you can become eligible by joining the NMFA with a one-time fee of $20.
A final general note: Cash back cards are only valuable for consumers who pay their balance in full every month. If you carry a balance, you are better off finding a low-interest rate card, since the interest you are paying will more than offset any cash back you might receive.
Editor’s Note: This section needs to be updated. Recently, the following 2% cash back credit cards have been introduced: The Fidelity Retirement Rewards Amex and the Schwab Bank Visa Card.
March 31st, 2008 at 8:21 am
[...] instead of selecting a credit card specifically because it is green, you can always choose the best cash back card available and donate the cash rewards to your favorite environmental cause. It is slightly less [...]
June 18th, 2008 at 8:27 am
I am looking for a cashback card……my major expenditures are gas, food, and hotels. Also, I prefer a card that does not charge for foreign exchange.
June 18th, 2008 at 11:09 am
@Gerald
In your case, I would recommend looking at either of the Costco cards if you are a member:
Since the Costco cards are issued by Amex, there is a foreign exchange fee. If you’re looking for a card with low fx fees, then the Penfed card mentioned above is probably your best bet. Cap One cards do not charge forex fees, but their cash back rewards are not as attractive in general.
August 5th, 2009 at 2:27 pm
Where is $20 one-time NMFA membership? All I can see $20 _annual_ fee: http://www.nmfa.org/site/PageServer?pagename=membership_levels
August 5th, 2009 at 2:45 pm
@guest
Once they’ve accepted you, PenFed doesn’t require that you renew your membership in NMFA, so in effect you can treat it as a one-time fee.