5 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 has the advantage of being simple to understand and universally accepted. Unlike points and miles, cash can earn interest when unused and are not subject to the constantly changing terms and conditions of corporate loyalty 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 with them each month. When we are not looking for travel rewards, we use a card that returns 2% on all purchases in order to earn an additional $50 a month in cash back. That equals a return of $600 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 5 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 cards.
BankAmericard Cash Rewards™ Credit Card
The BankAmericard Cash Rewards™ Credit Card offers 2% back at grocery stores and wholesale clubs, 3% back on gas, and 1% on other purchases. (Grocery store, wholesale club, and gas bonus rewards apply to the first $2500 in combined purchases in these categories each quarter.) Bank of America customers get an extra 10% bonus when redeeming rewards directly into a Bank of America® checking or savings account (instead of a statement credit). There is no annual fee.
Bonus offer: $100 online cash rewards bonus after you spend at least $500 in purchases in the first 90 days of account opening. Also get a 0% introductory APR for 12 billing cycles on purchases, and any balance transfers made within the first 60 days; after that, a variable APR that's currently between 13.24% and 23.24% will apply. A 3% fee (minimum $10) applies to balance transfers. See terms.
Discover it® Cashback Match™
With the Discover it® Cashback Match™, you earn 5% cash back in categories that change each quarter up to $1500 per quarter when you activate, plus 1% cash back on all other purchases. As an exclusive offer to new cardmembers, Discover will match all the cash back you've earned at the end of your first year — automatically. Besides being a great cash rewards credit card, it offers free monthly FICO credit scores on statements and online. There is no annual fee.
As a sign-up bonus, you can get 0% intro APR for 12 months on purchases and balance transfers. Then a variable purchase APR applies (currently 11.24% - 23.24%). A 3% fee applies to each transferred balance.
Capital One® Quicksilver® Cash Rewards Credit Card
Don't want to bother with rotating quarterly categories? The Capital One® Quicksilver® Cash Rewards Card will get you unlimited 1.5% cash back on all purchases. There is no limit to the amount of cash you can earn, and no minimums to redeem the cash back. The cash back doesn't expire, either! You can get cash back in the form of an account credit, check, or gift card. Plus, every 10th Uber ride is free (up to $15) when you pay with this card through March 31, 2017. There is no annual fee.
There is currently a one-time bonus offer of $100 cash after you spend $500 on purchases within the first 3 months. There is also a 0% intro APR on purchases and balance transfers for 9 months. (After the promotional period, there is a 13.24%-23.24% variable APR; a 3% fee applies to each balance transferred.)
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), 3% at U.S. gas stations and select U.S. department stores, and 1% on other purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. There is a $95 annual fee ($75 if your application is received by 8/3/16).
As a bonus offer, you can earn $150 back in the form of statement credit after spending $1,000 in purchases in your first 3 months. You also get 0% intro APR on purchases and balance transfers for the first 12 months. After that, your APR will be a variable rate, currently 13.24%-23.24%, based on your creditworthiness and other factors. Terms and conditions apply.
Citi® Double Cash Card - 18 month BT offer
The Citi® Double Cash Card - 18 month BT offer from our partner Citi stands out from other credit cards offering cash back rewards in that you earn cash back not once, but twice on every purchase. You get 1% cash back when you buy, plus another 1% cash back as you pay for those purchases. No need to wait until you pay off a purchase to earn the additional cash back — you'll get it whether you can pay in full or over time, as long as you pay at least the minimum amount due. Unlike many other cards, the Double Cash card has no category restrictions, no enrollments in rotating categories, and no limits on the amount of cash back that you earn. There is no annual fee.
There is a 0% introductory APR on balance transfers for 18 months. After that, the variable APR will be 13.24%-23.24%, based on your creditworthiness
Fidelity® Rewards Visa Signature® Card
The Fidelity® Rewards Visa Signature® Card makes it easy to earn cash back and save for your goals at the same time. You earn unlimited 2% cash back on all purchases when redeemed for a deposit into an eligible Fidelity account. There are no rotating categories or caps on your rewards, and the points never expire. There is no annual fee.
Capital One® QuicksilverOne® Cash Rewards Credit Card
The credit cards with the best rewards tend to require an Excellent credit score. While cards designed for people with Fair or Average credit are easier to get approval for, they don't offer the highest rewards. But with the Capital One® QuicksilverOne® Cash Rewards Credit Card, you have the opportunity to earn decent cash back even if your credit is on the lower end. Like the Quicksilver version, this card offers unlimited 1.5% cash back on all purchases, with no rotating categories to keep track of or sign ups for enrollment. You also get every 10th Uber ride for free (up to $15) when you pay with this card through March 31, 2017. Plus, you can get access to a higher credit line after making your first 5 monthly payments on time. There is an annual fee of $39.
New cardmembers get a 0% intro APR on purchases for 9 months. (After the promotional period, a 23.24% variable APR applies.)
Within the credit card industry, the term "deadbeat" is used as slang to describe customers who always pay their balances in full and on time. These customers don't provide the banks with any profits from interest payments or late fees, but they are still valued customers due to the merchant fees their spending generates and their impeccable payment history. If you are a proud member of this group, and you have no interest in travel rewards, you should be using one of these cards that offer the maximum cash back for your spending.
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Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.