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 are 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 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 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® Cash Rewards Credit Card
The 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: $150 online cash rewards bonus after you spend at least $500 in purchases in the first 90 days of account opening.
Blue Cash Preferred® Card from American Express
The 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), 3% at U.S. gas stations and select U.S. department stores, and 1% on other purchases. There is $95 annual fee for this card.
Welcome offer: Earn $200 back after spending $1,000 in purchases within the first 3 months. Terms apply. See rates and fees.
Citi® Double Cash Card - 18 month BT offer
The 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. There are 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.
Chase Freedom Unlimited®
The is one of the newest cash back credit cards on the block, offering unlimited 1.5% cash back on every purchase - it's automatic! Earn a $150 bonus after you spend $500 on purchases in your first 3 months from account opening. The cash back does not expire and can be requested at any time with no minimum requirements. There is no annual fee for this card.
Barclaycard CashForward™ World Mastercard®
The offers 1.5% unlimited cash back on every purchase. Cardholders also get a 5% redemption bonus. The minimum redemption requirement is $50. As a bonus, new cardholders can earn $200 after spending $1,000 in purchases in the first 90 days of account opening. There is no annual fee.
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!
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