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, 3% back on gas, and 1% on other purchases. (Grocery store and gas bonus rewards apply to the first $1500 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.
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 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. There is no annual fee.
There is currently a sign-up offer of $100 cash bonus after you spend $500 on purchases within the first 3 months. There is also a 0% intro APR on purchases and balance transfers until November 2016. (After the promotional period, there is a 13.24%-23.24% variable APR; a 3% fee applies to each balance transferred.) This card comes with the Capital One Credit Tracker, which allows you to easily monitor your monthly credit score anytime, anywhere — for free! Plus, you get 20% statement credit on all Uber rides purchased with this card through April 2016.
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. Get 6% cash back at US 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 $75 annual fee.
As a sign-up offer, you can get $150 back in the form of statement credit after you make $1,000 in purchases with your new card in the first three months. You also get 0% APR on purchases and balance transfers for the first 15 months. After that, your APR will be a variable rate, currently 13.24%-22.24%, based on your creditworthiness and other factors. Terms and limitations apply.
Citi Double Cash
The Citi® Double Cash Card 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 and purchases for 15 months. After that, the variable APR will be 13.24%-23.24%, based on your creditworthiness
Discover it - Double Cash Back your first year
Discover it® - Double Cash Back your first year offers 5% cash back in categories that change each quarter up to the quarterly maximum when you sign up, plus 1% cash back on all other purchases. As an exclusive offer to new cardmembers, Discover will double 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. Their new Freeze ItSM on/off switch allows you to prevent new purchases, cash advances and balance transfers in seconds by mobile app and online. There is no annual fee.
As a sign-up bonus, you can get 0% intro APR for 6 months on purchases and 18 months on balance transfers. The 18 months 0% intro APR for balance transfers is one of the highest offers available. Then a variable purchase APR applies (currently 11.24% - 23.24%). A 3% fee applies to each transferred balance.
TD Cash Visa Credit Card
You may not have heard of the TD Cash Visa® Credit Card, but this card is certainly worth talking about. This card offers 2% cash bonus on dining purchases from your local deli to fast food, coffee shops, casual restaurants and fine dining, and 1% on all other purchases — no categories or gimmicks — and earn points that never expire*. Redeem your cash rewards for over 400 options — cash back, electronics, gift cards, travel rewards and more %mdash; starting at $25. There are no foreign transaction fees, and there is no annual fee*.
As a sign-up bonus, new cardmembers can earn $200 cash back when you spend $1,500 within the first 90 days of account opening*. In addition, they can enjoy a 0% introductory APR on balance transfers for 12 billing cycles and 13.24%-23.24% variable APR thereafter; based on creditworthiness. (A 4% balance transfer fee will apply for each transfer.) Currently, this card is only being offered in 15 states along the east coast of the U.S.
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.
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.