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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 (Discover).
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. 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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Discover More CardThe Discover More Card offers 5% cash back on “Get More purchases” and 1% on everything else. Get More purchase categories change every season but fit a theme. For example, in the summer the categories are usually travel related – like gas, hotels, zoos, bookstores, and theme parks. Other categories include airlines, hotels, car rentals, cruises, home, department stores. If you don’t want to carry multiple cards, Get More is a very versatile program. |
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Miles by DiscoverThe Miles by Discover is one of the only airline mileage loyalty programs that does not charge an annual fee. They will give you 2x miles on the first $3,000 in travel and restaurant purchases and then 1% miles on everything else. They also offer 12,000 bonus miles in the first year, 1,000 miles each month you make a purchase. And finally, they also offer 0% intro APR on balance transfer and purchases for the first six months. |
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TrueEarnings® Card from Costco and American ExpressThe TrueEarnings® Card from Costco and American Express is my favorite credit card because you can get up to 3% cash back on gas and restaurant purchases, 2% back on travel, 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. |
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Citi FORWARD Visa CardThe Citi FORWARD Visa Card is offers 5% cash back points on books, movies, music and restaurants, 1% cash back points 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 5,000 points when you sign up for paperless statements within 3 months of opening. If you satisfy all those requirements, you can get 11,100 points in the first month, worth $111. |
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Citi mtvU Platinum Select Visa CardThe Citi mtvU Platinum Select Visa Card is my second favorite credit card because you get 5% cash back points on books, movies, music and restaurants, 1% cash back points 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. |
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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No Amex Blue Cash? It’s my favorite.
This is the one I use too for 90% of my purchases… I don’t want to have to flip between cards depending on what I buy–except I have a cash back Mastercard for when stores don’t take AMX… Haven’t looked into alternatives for a while…
All your links (at least the last two) go to the same address.
I am ready to change mine, I had the Chase Freedom so I could get the $250 for $200 but they cancelled that right as I passed the $200 so now I can only get the $ for $.
Time to change to another card so this list helps, I will see what other people comment and say they like the most.
I heard the same, but whenever I log into my Chase rewards that option is still available.
Anyone redeem this recently?
I also found this odd. My partner and I have both had the Chase Freedom card for over a year. Chase changed all of his terms, so he no longer earns the flexibly changing top 3 category bonus earnings, and he can’t get the $250 for $200 bonus either. But whenever I log in to my account, nothing appears to have changed. Weird.
I have two on the list. I like my Schwab for the everything else category too.
I use Chase Freedom. I still get the $250 for every $200 earned. Not sure why some people no longer receive the $50 bonus, but I still get it. This is the only card I use and I pay in full monthly.
They changed mine to “Ultimate Rewards” I still have my earning just can not use it for anything. I wish I could get my $250 check, now mine is up to $244 and probably will just pull it as cash instead.
(Yes I am replying to myself)
Y’all have convinced me, I am going to call and see if they will still honor the previous cash back awards for my card.
Let us know what they say!
My new favorite is the Schwab card. It pays 2% back and you don’t have to worry about remembering which card you need to use at each place.
Schawb Cash Back gives 2% on everything no limit and not annual fee
Pentagon Federal Visa Plat Cashback Rewards.
https://www.penfed.org/productsAndRates/creditCards/RewardCards.asp
Keep in mind that the Discover card gives you UP TO 1% back on all purchases, which tends to be much less than 1%. Also, the 5% cashback bonus is only good for certain purchases at certain times of year. I carry two credit cards and only use my Discover card when the 5% applies.
I made the mistake of not reading the fine print on the rewards for the Discover. I was extremely disappointed with the generic 1% cashback and don’t want to deal with the hassle of keeping track of when the categories for 5% are available. The card’s deceiving; Schwab 2% back is much better and less deceiving.
I’m with HuBu, after Chase changed their Cash Back program, we got the PenFed card and now it’s our favorite. These last two months we really have ‘cashed’ in with 5% on airline travel and 5% on back to school, in addition to 5% for gas, 2% for groceries (including Wal*Mart) and 1.25% on everything else. No caps, and the cash is credited each statement, so the money never leaves your savings account (nice bonus)
Man that’s great to know that the 2% applies to Walmart, we are starting to buy our groceries there from now on, with the exception of fruits (Publix always has the best quality). We just switched over to the PenFed from BoA’s amex cash back, which was giving us a 1.25% cashback across the board. But you can only cash out in increments of $50.
For PenFed, do you get ACTUAL cash?! I want a credit card that gives em actual cash. I dont really care about buying plane tickets or unnecessary gifts like watches and golf clubs.
DJ Hams, The PenFed Card gives you a statement credit each month, which is as good as cash, with the added benefit that your cash does not have to leave your high yield (if you can call it that) savings account. It has other nice perks as well, including cell phone insurance if you pay your cell with the card. And 5% promotions that keep popping up. The back to school is a great one, which gives you 5% on huge list of vendors including online vendors. We have made a killing getting 5% on our Amazon.com orders (none of which had anything to do with school) hint, hint…
man i didn’t know about the phone insurance. the insurance i have on our 4 phones right now. that’s a saving of $28/month.
HuBu, Keep in mind that you have to sign up for and then pay our cell phone with the card for that insurance to kick in. It’s totally free and you will see the link when you log in to your account online. You know you are covered when you see the icon of a cell phone in your online account.
I currently have an eBay Mastercard. I get $25 towards eBay for every 2500 points I get, with $1 earning a point. for 9500 points I get $100 towards eBay. They also gave me a free photocard, which I get complimented on by bany cashiers.
Hard to beat the Schwab Card. I get 2% cash back deposited into my Charles Schwab account at the end of every month. I have only had it for a couple months and I already have over $100 in my account. It also has no annual fee and best of all, no foreign transaction charges. So when I travel outside the country I don’t have to get pissed at the 3% extra fee that Visa and Mastercard usually charge. Once I get to $1000 dollars I am going to buy an individual stock and let it role. Since it’s bonus money and not money I really earned I can gamble a little bit on the market without losing any sleep on it.
The Schwab card is the best overall deal right now. I still use my Chase FREEDOM card because they haven’t cancelled the $250 reward for me yet. I actually just cashed one in earlier this summer. I also use Discover Open Road for gas, though as prices rise it’s hard to spend only $100 a month on gas.
Tip on the Schwab card: transfer the money back into your checking account (Schwab, or external) for free and use a bargain trading service (e.g. Sogotrade, $3 a trade). Why waste money trading with Schwab?
I like the Schwab card too, since it’s hard to beat a consistent 2% on everything. I use the monthly cash back together with my own savings to purchase $100 SWTSX total market index mutual fund which Schwab does not charge any fee for purchase. It’s a quick way to get a non-expensive diversified stock investment. And with Schwab’s cash back, it makes it easier to invest.
We are using our Sam’s Club Discover to get 2% cash back on all purchases. The card has a $100 annual fee, which allows two people in the same household a Sam’s Club membership. Having this card costs $65 more per year than a Sam’s Club membership, but the amount we charge on it makes it the best deal for us. Last year our check was about $975. We also have a BP Visa (no annual fee) which gives us 5% cash back on BP gasoline purchases.
In our area, BP is always 5 to 8% higher than the competitive fuel stops, so the BP 5% would actually be a loss after considering the price differential.
I have the PenFed (actual) cashback card! It’s great. I get back 5% CASH on gas; 2% CASH on groceries; and 1.5% CASH on everything else. I use it for everything and pay the bill every month. From what I can determine, the point rewards are not as good. You may earn 5% reward points but when you exchange the points (even for cash) it translates into less money.
I only use Chase Freedom also. I think it’s probably be best card because nearly everything I buy gets 3% and everything else is 1%.
There is a $600 limit on the 3% each month. So that means the max “bonus” you can get is $12/month.
I eat out a lot, so I wanted to find a card that gave good rewards for restaurants. I found just that with Capital One No Hassle Miles Card. If you go to the ‘design-your-own’ feature of their website, you can create a card that gives you triple rewards in a category of your choice. I think you end up having a high APR as a result, but I pay it in full every month anyway. Plus, you can put whatever image you like on your card
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As for the rewards, it may be called “no hassle MILES,” but there are many more rewards than just flights. I’m perfectly happy taking the $100 bonus after accumulating 10,000 points. Since I only use this card at restaurants, I get the full 3% back with every transaction. For everything else, I use Chase Freedom and get triple rewards on most of the other stuff. Not bad, I think
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I use Chase Cash Plus Rewards card, which is, I believe, discontinued. I still get 5% cashback on gas, grocery and drug stores.
I also use Citi Forward card for 5% cashback on dining.
I used to use the Citi Dividends card which had the same rewards. They changed quite a while ago now. I’m surprised they are still doing 5% cash back on anything. Don’t expect it to last forever…
Jim,
I love your blog but do you always need to just tout the products that have affiliate programs? i.e. make you money?
Your advice is great but sometimes it’s just a little excessive with the “advertising”.
The Schwab card, 2% FLAT cash back on every purchase? I’m shocked that’s not in your list. The only thing that comes to mind is that it does not have an affiliate program.
Okie: I appreciate your feedback and I try to put in a good mix of different kinds of posts. This is my full time job now and I need to pay the bills so I do hope you understand.
Does PenFed rebate 5% for gas filled at Costco? Does it rebate 1.25% for regular stuff bought at Costco? I have an American Express cash rebate card and they exclude all Costco purchases.
Costco only allows AMEX and debit cards.
I don’t shop at Costco, so I don’t know exactly and Sam’s does not accept Visa, but I can say that I get 5% for Gas purchases at Sam’s and the lowest rate PenFed pays is 1.25% without any restrictions what-so-ever, so if Costco takes Visa then you would get 1.25%. PenFed does not have the restrictions or caps for warehouse clubs that Discover does.
I had the Chase Freedom, but the cash back on it went down the drain. I am going to be getting the American express Costco card since I shop at Costco so often and it has some good cash back.
I have the Amex blue card, but it only gives me cash back once a year. I barely ever use it because of this. Does the cash back post more frequently with additional use?
> “Does the cash back post more frequently with additional use? ”
Nope. With Amex Blue cash, the agreement fine print says cash back is credited once a year on the anniversary.
The cash back credit is actually 1 month after the anniversary for Blue Cash.
The Blue Cash Back from Amex gives you 1.25 % on your everyday spend (supermarkets, gas stations, cell and landline, post office, drugstores) and 0.50 % on non everyday spend till you reach the threshold of $6500.01, after that you received 5% on your everyday spend and 1.5% on non everyday spend. The cash rebate posts to your account on the following statement of your anniversary date. You can always track your cash rebate online.
I avoid these kinds of cards because it’s just too much work to determine their true value. You need to estimate your spending for an entire YEAR and categorize essentials just to accurately evaluate the card. Not to mention you need to predict gas prices.
You could probably write a program to factor in all these variables, but it gets very complex very fast when you start considering using multiple cards…
Another point to consider is if you decide you find another card you like better, and you’ve already contributed significantly to the $6500 threshold, now you have to deduct that 0.5% cashback loss to determine the value of switching, or wait until the year is up.
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.
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.
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.
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…
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.
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!!!
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…
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.
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!
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