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Best Cash Back Credit Cards

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A few years ago, cash back credit cards were everywhere. Today, the offers are harder to find as company hunker down and deal with the financial crisis we’re facing. Despite the economic climate, cash back credits are still out there and you can still get a little cash back on your purchases.

How do cash back credit cards work? Each credit card company does it differently but the basic idea is the same. Every time you make a purchase with the credit card, your cash back or rewards account goes up in value. When you reach a certain threshold, you can cash out your cash back. Some companies will write you a check (Citi), while others will directly credit your account balance.

Is cash back worth the hassle? The answer is it depends. Some cards offer high cash back percentages on certain purchases and you can optimize your cash back by using several cards. Many of the best credit cards have rewards. I don’t recommend using more than two or three cards because the return on your time will decrease as you get more cards (you may find it helps to write down the cash back categories on the card itself).

Best Cash Back Credit Cards

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Citi FORWARD Visa Card

The Citi FORWARD Visa Card is offers 5 points per dollar on books, movies, music and restaurants, 1 point per dollar on everything else. You get 6,000 points once you make $250 in purchases within the first three months, 100 points each pay period when you pay on time and stay under your limit, plus 2,500 points when you sign up for paperless statements within 3 months of opening. If you satisfy all those requirements, you can get 8,600 points in the first month, worth ~$86.

Citi® mtvU™ Platinum Select® Visa® Card

Citi mtvU Platinum Select Visa Card

The Citi mtvU Platinum Select Visa Card is my second favorite credit card because you get 5 points per dollar on books, movies, music and restaurants, 1 point per dollar on everything else. You also get up to 2000 points for having a good GPA and 25 points a month when you pay on time and stay under your credit limit.

TrueEarnings® Card from Costco and American Express

TrueEarnings® Card from Costco and American Express

The TrueEarnings® Card from Costco and American Express is my favorite credit card because you can get up to 3% Cash back at US gas stations and on gasoline at Costco up to $4,000 per year in purchases, then 1% everywhere with no annual limit, and you get a $25 bonus after your first purchase. It is also accepted at Costco, which makes their already affordable products even cheaper. The best part? There are no cash back games or gimmicks, they send you a check.

Schwab Bank Invest First™ Visa

Schwab Bank Invest First™ Visa

Finally, the Schwab Bank Invest First™ Visa, much lauded by readers in the comments, offers a 2% cash rebate credited directly into a Charles Schwab brokerage account every month. There are Schwab brokerage accounts with no minimums and fees so if you’re willing to take an extra step, having the cash back deposited into a brokerage account, then you can be rewarded with 2%. 1% is the standard cash back percentage so 2% is really good.

Some of the cards listed offer the cash back in the form of reward points and they are included only if you are able to convert those reward points into a statement credit or a check.

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64 Responses to “Best Cash Back Credit Cards”

  1. Matt says:

    Schwab all the way. I made $100 in my 1st 2 months.

    And with Discover you have to spend X-thousands of dollars each cycle year before they begin the up to 1% cashback.

    And when you can use the Discover 5% it’s only for up to $400-800 purchases over the 3 month period.

  2. Sheri says:

    Tried filling out Miles By Discover & twice it got locked up at the question of housing (do you rent or own). Couldn’t get beyond that question. :(

  3. Erin says:

    Question..Is the PenFed and Schwab cash back cards only good for 1 year? With Citicards their offers are only good for 12 months or less. Just wondering.

  4. Dan says:

    It’s now official for me. Chase Freedom is dead, effective October 30. No more $250 for $200 option, and no more top 3 categories. Now you have rotating categories. The card will now be retired into my stack of unremarkable cards alongside the once venerable Citi Platinum Dividends card…

  5. Ian says:

    Ok, I also received the notification from Chase Freedom that their policy on the $250 for $200 will be changing October 30th 2009. My initial thought was “that sucks”, because I have used it to generate some nice cash back. But… my looking for an alternative now to the Chase Freedom card (because it will be virtually worthless in a month)revealed some interesting findings. I ran some comparison numbers from what I was getting from Chase Freedom card compared to what a standard no frills 2% would look like.

    First, my family filters everthing (that won’t tack on fees to charge)through our Chase Freedom card(s). And I don’t have two cards to take advantage of the 3% for more than the $600 limit. We pay the balance off every month, so interest rates could be 100% as far as I’m concerned. This is what you could expect for cash back from the Chase Freedom card prior to their reduction of Cash back benefits…

    purchases rewards %return %return adj.
    ($250 for $200)

    $2942 $41.69 .0141
    $2369 $35.67 .0150
    $2301 $35.03 .0152
    $2082 $33.06 .0158
    $5245 $64.76 .0123
    $1981 $31.46 .0159
    $3506 $47.31 .0135
    $4538 $54.61 .0120
    $2160 $31.99 .0148 (best)
    $1509 $27.27 .0180 .0226
    $5782 $58.33 .0101 .0126
    $1669 $28.83 .0173 (worst)
    $5464 $66.95 .0123
    $4913 $61.17 .0125
    $3075 $43.00 .0140
    $2720 $39.24 .0144

    $52256 $700.37 .0134 .0163 ($850)

    $850 is better than paying with check or cash, and if you could limit your credit card purchases to $1500/month you could make .0226% return… I wish. When one gets into the $5000′s your return is barely 1%. Those same purchases using a straight 2% cash reward card like Schwab Visa would render these returns…

    $52256 $1045.12 (cash back)

    So thank you, Chase Freedom, for changing your rewards benefits… had you not, I would still be under the impression that I was doing a good job taking advantage of the rewards of using a credit card. Now I know there are significantly better options.

    Thanks also to the others here, for sharing their thoughts on different cards, which have be very helpful.

  6. Alex says:

    Lets be clear about one thing. The Citi Forward is NOT 5% cash back. It is 5 Thank You Points for every dollar spent at,,, let’s say restaurants for the sake of simplicity. In the Thank You system to get $50 cash back you must redeem 8,000 points and that means one point is worth .00625 cents. If you spend $100 at a restaurant, you get 500 Thank You points which equals $3.125 or 3.125% NOT 5%. You did call them cash back points so you’re not wrong, it’s just a little misleading a skill which bankers and credit card companies excel. And 3.125% beats the 3% that AMEX gives us so this is a great card to use when the restaurant says they don’t accept AMEX!!!

  7. Dan says:

    Just got more bad news today. My Discover Open Road Card is going from 5% to 2% cash back effective Jan 1, 2010. It’s nice of Discover to give me more than a one month notice, but the card is still dead to me. On the bright side, it looks like I am back to a single card to rule them all again (Schwab 2%).

    This is not a good time for rewards credit cards…

  8. Julio says:

    I just got an advertisement from Chase touting their new Ultimate Rewards Cash Back program. They sent me an entire magazine full of benefits, ok maybe not a magazine, but it’s the most advertising I’ve seen for a Cash Back Card yet. And after it’s all said and done, it’s a mere 1% across the board. I think they eliminated the 3% rotating categories, unless somehow I missed it amongst all the hype on how you could redeem the cash you wont be earning.

    I’m not dusting that card off and putting it back in my wallet any time soon.

  9. Abe says:

    Chase Freedom has been cutting it’s fairly good program (3% cash back from top 3 categories –> 3% on 3 set categories; no more $250 when you reach in rewards $200).

    The most detailed discussion of this change I’ve seen is at Slickdeals.net:
    http://slickdeals.net/forums/showthread.php?t=1352959

    Many people use an American Express (AmEx) or Discovery card for some categories (i.e., using the Costco Small Business card for 5% back on gas, etc) and used the Freedom card for any other categories to get 3% back as much as possible.

    Assuming you use AmEx/Discover where you can and pay the full balance each month here is a list of some alternative Visa or MasterCard replacements for the Chase Freedom:

    (1) Citi Forward [citiforward.com] Visa
    5 “points” back for books, restaurants, 1 point on everything else. 6000 bonus points after $50 spent

    (2) Schwab Visa – 2% back if you have a brokerage account with them.

    (3) Penfed rewards card [penfed.org] – 5% on gas “at the pump”, 2% on supermarket purchases, and 1.25% on everything else. (+ fee/donation to sign up for an applicable organization)

    I haven’t received a cancellation letter of the Freedom benefits, but when / if I do, I will be deciding between the above cards – the gas benefit of the PenFed card is huge, but it’s the same as the Costco Small Business card (5%). The Citi cards points are worth about $.00625 / point (as opposed to a cash reward card at $.01 / dollar spent). The Schwab card is easy (2% for everything) but it requires some significant action to get the cash out of their account and into your own checking account.

    As others have mentioned, the Chase Freedom card 3% on the top 3 categories is not as much of a benefit as I anticipated, but it is more the 2% overall as the Schwab card would be given the $50 bonus when saving up to the $200 in rewards.

    No easy answers unless you don’t have a Costco Small Business card (any one can get one – just include your business as your name). If you don’t have the costco card, the PenFed card seems like the best option – check it out!

  10. Susan says:

    I have been using reward/cash back credit cards for years. I liked Citi’s Thank You points until the last couple of years when it came down to less than 1% back. I’ve gotten a Schwab card for the 2% back and I couldn’t be happier. I still have Discover and capitalize on their 5% categories, but that is about all I use it for.
    Susan

  11. Matt says:

    I tried to find the Schwab card online today to apply and couldn’t locate it. Does anyone know if this card is still available and if so, where I could apply for one. If it’s still out there, I would really appreciate a link. Thanks guys

    • Erin says:

      I had the same issue too! I would like to sign up for one but can’t find the site for the cc.

    • zapeta says:

      I checked all the links I had to information about the card and they all appear to be dead. Sorry!

  12. My personal favorite is the American Express Costco TrueEarnings card because I get a minimum of 1% cash back and up to 3% cash back in certain categories (that don’t rotate).

  13. aua868s says:

    after some research…my vote to the schwab’s card.

  14. Liberty says:

    For my use I have two cards: Schwab and PenFed.

    PenFed is my gas and airline card and other promotions. Schwab is for everything else.

    Both cards have a “no games” policy for crediting the cash back – monthly.


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