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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 1.5% 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 1.5% 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.
Chase Freedom Cash Visa Card
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Pros: Good cash back percentage on a wide range of purchases, adjusts to your changing spending patterns Cons: Bonus cash back is capped monthly |
The Chase Freedom card is a relatively new offering that provides good rebates in a wide range of categories. Its system divides purchases into 15 categories. Each month, it calculates the amount of spending you have in each category and rebates you 3% in the three categories in which you spent the most. Those categories can change from month to month, depending upon your spending. All other purchases earn a 1% rebate.
In addition, if you wait until you have accumulated $200 in rebates, you can get redeem for a $50 bonus, resulting in a $250 check. This effectively increases your rebates to 3.75% in bonus categories and 1.25% everywhere else.
One issue to be aware of is that you can only earn 3% on a maximum of $600 in a given month. If you spend more than $600 in three categories in a month, you will only earn 1% on the amount that exceeds $600.
Fidelity Investment Rewards Visa Signature Card
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Pros: 1.5% cash back on everything with no tiers and no caps Cons: Need a Fidelity investment account |
For each dollar you spend with Fidelity’s credit card, you’ll earn one point. You can redeem 5,000 points for a $75 deposit into your Fidelity account, meaning you’ll receive a return of 1.5%. With this card, there are no spending tiers, which means you’ll earn a flat 1.5% from the first dollar you spend.
There is also no cap on the number of points you can earn, making it a very useful general purpose card. The only catch is that you must have an eligible Fidelity investment account (which includes most accounts other than 401(k)s).
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% 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.
March 31st, 2008 at 8:21 am
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