Best Cash Back Reward Credit Cards

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I’m often emailed by readers to list what I feel are the best reward credit cards currently available. I personally think that “best” is such a subjective term, the best set of reward credit cards really depends on your spending profile. If you spend a lot in a particular category, you’ll want to get the best card for that category and make sure it has a place in your wallet. If you don’t know what you spend a lot on, you might as well save yourself the hassle and get one that works in all scenarios.

The best cash back credit card is the one that maximizes your reward earnings and converts those rewards into cash or products that you would buy at a favorable exchange rate. Many cards offer high reward points on the front end and then effectively reduce your rewards by converting them at a horrible exchange rate when you redeem them. It’s important to look at both sides of the equation.

My personal strategy has always been to get three cards – two that give me high cash rewards on the categories I spend on and one that is for everything else. Any more than three cards and it becomes a bit difficult to manage and remember, plus I hope not to spend so much that having more than three cards is actually worth my time. I also avoid annual fees whenever possible because you can get a great card with great cash back without paying an annual fee, so why bother?

Best Overall Cash Back Reward Card

The Discover® More Card is my choice for best cash back rewards card because the Discover More rewards program is so versatile. Every quarter the category that earns 5% cash back rewards changes to a grouping that most likely matches your own spending habits. During the summer months, they’ve typically given 5% at gas stations and hotels, travel related expenses. In the winter months, it’s more standard everyday purchases like at grocery stores, restaurants, etc. When you are spending outside the 5% category, you get unlimited 1% cash back bonuses on everything else with no tiers, no requirements. No annual fee and you may be eligible for a 0.00% promotional APR rate.
Blue Cash® from American ExpressSecond Runner Up: Blue Cash from American Express is a solid runner up for the best all around reward card because they offer 5% cash back on “everyday purchases,” which includes supermarkets and gas stations. It’s a tiered reward card meaning you don’t get 5% immediately, you have to spend more to get the maximum rewards ($6,500 during the year gets you to the highest tier). What’s nice about this card is that you get unlimited cash rewards, so there is no annual cap on your rewards like some other cards, there is no annual fee, and you can get a 0.00% introductory APR for up to 12 months.

Best “Dinner & A Movie” Card

Best Student Credit Card

Citi® mtvU™ Platinum Select® Visa®The card I use for restaurants is the Citi mtvU Card which gives 5% cashback on purchases at restaurants and the movies (and bookstores too!), in the form of ThankYou Network points that can be converted into gift cards. It’s the only card that I know of that gives 5% cash back at restaurants and movie theaters on a regular basis and so it’s always in my wallet for that very reason.

It’s also my pick for the best student credit card because of all the benefits it offers to students. Many “student” credit cards are marketing gimmicks, they are student cards in name only and really offer little in the way of education and rewards specifically tailored for students. The Citi mtvU card is different. They give you points for getting good grades, paying your bill on time, staying under your credit limit, and high rewards for typical student purchases like at bookstores, restaurants, etc. Rewarding a cardholder for good behavior is something that’s rare in the credit card business.

This card also offers 0% APR on purchases for seven months if you qualify and no annual fee.

Best Gas Card

Blue Cash® from American ExpressI profiled some of the best gas reward cards a while back and the American Express Simply Cash Card, recently discontinued, lost its place as king of the hill to its brother, Blue Cash from American Express. The Blue Cash card offers 5% cashback at gas stations (and grocery stores and drugstores), which makes it one of the best gas cards out there. There is one downside, the 5% doesn’t kick in until after you’ve spent $6500 that year based on your anniversary date. After the first $6500, where you earn less than 5%, the 5% kicks in. Also, no annual fee and they’re offering 0% APR for up to 12 months on purchases.

Best Airline Card

The best airline card is the one that’s run by the airline you use the most. If that’s American Airlines, you want an American Airlines branded card. If it’s JetBlue, you’ll want a JetBlue card. If it’s Southwest, you’ll want a Southwest card. closest to you. The programs are all pretty much modeled after one another so the differences are minor. If you fly all sorts of airlines, I guess the best one for you is probably the Citi PremierPass card because you get a points bonus and you can apply the points to any airline. The current offer is 20,000 bonus points after $600 in purchases within 3 months for the Citi PremierPass Card – Elite Level and $10,000 bonus points after $300 in purchases within 3 months on the non-elite level card. The Elite Level card has a $75 annual fee and the non-Elite card has no annual fee. I don’t have either but I have some friends who love it because you earn points for the miles you are actually flying!

What do you consider to be the best reward credit card? Did I miss a category?

{ 17 comments, please add your thoughts now! }

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17 Responses to “Best Cash Back Reward Credit Cards”

  1. jim says:

    JB: Some people have mentioned the Penfed card but since it does have some membership requirements (albeit low ones, like you can join the NMFA to become a member) I left it out of this list. It would’ve made for a great “everything else” card in addition to a great gas card.

  2. JB says:

    Pentagon Federal Visa Platinum Rewards Card

    Best all-around card, period:


    – 5.00% cash-back, gasoline
    – 2.00% cash-back, groceries
    – 1.25% cash-back, everything else

    – No minimum or maximum spending limits.
    – No waiting for rewards to hit a certain threshold – the money is credited back to your account every month, on your bill.

    You have to be a member of Pentagon Federal Credit Union (one of the largest in the country and easy-enough to join if you look around a bit).

    Honestly it’s the best one hands-down, and looks like it beats almost everything listed above. I use the Chase Freedom for bars/restaurants (for the 3%) and everything else goes on PenFed.

  3. saladdin says:

    I’m with JB.

    I don’t buy the “membership requirement” reason for exculsion. All cards have some type of “requirement” from annual fees to needing to have a FICO above a certain score (700 for example) or even salary mins.

    I say any card that only allows max rebates to kick in only after $6500 should be excluded. The Penfed card is just a better deal all around.


  4. jim says:

    saladdin: Yes, all cards have a membership requirement but I think that it’s very clear on the Penfed card that you need to be a Penfed member. You can’t just walk in and join, you have to get in through other means (albeit simpler means).

    As for the Blue Cash, I do think the $6500 sucks but I’ve gotten a bunch of emails from people who recommended the card after my best gas card post, which is what put it on my radar.

  5. JB says:

    Oh and I forgot to mention:

    Thanks for the site Jim. Always a pleasure to read. 🙂

  6. Blue Cash rocks, especially if you have a big family. The 3% difference on groceries vs. the PenFed card is actually a pretty big deal in my house.

  7. Ceo Reom says:

    Doesn’t the Chase or Discover card already offer unlimited 1% cashback on everything else? Why the need for the CashReturns card?

  8. Scott says:

    SPG AMEX is the best airline card now that they just opened their own direct flight booking service with no blackout dates: I just got the email on this service this morning. Of course you can always redeem 20,000 StarPoints for 25,000 airline miles (minus United and Continental who require more) whenever you want. Only downer is the annual fee is $45 (first year is free and you get 10,000 points for signing up) but I’ve found it to be well worth it.

    I did a quick check on how good their new airline booking service might be and found that I could get a Northwest flight from home to my wife’s family’s home for only 20,000 points but NW listed the same flights on their site for 50,000 miles! (I did a quick check on an international flight and the deal was not so good though – I guess your miles will vary.)

    FYI, anyone can join the SPG program for free. The credit card just makes it easy to rack up points quick.

  9. Kenny says:

    In you comment about the cards there is an ERROR. You said “There is one downside, the 5% doesn’t kick in after you’ve spent $6500 that year based on your anniversary date. After the first $6500, where you earn less than 5%, the 5% kicks in.”

    The meaning above is has a bit of controversy. If someone reads the 1st sentence, it means that 5% does NOT kick in AFTER the $6500 is spent. The 2nd sentence says that 5% kicks in AFTER the $6500 is spent.

    Please correct it, or correct me……English is my 2nd language so I may be wrong in the interpretation.

    For readers, basically, you are better off with Citibank Diamond card that give 5% or 5 ThankYouPoints from your first $1. I like that card, but that card has a catch where this promotion expires every 12 months. So, I get a card in my name, add another card, give the 2nd one to my wife, and the following year, apply for a card in my Wife’s name and get an additional card, which I use. Of course, I close the card in my name.

    This gets around the $6500 issue and also the special promo.



  10. jim says:

    Kenny… you are entirely correct, I’ve made the correction.

  11. LAL says:

    How do you become a member of NMFA? Is it worth it? And you can get mortgages with PenFed and CC?

    I have Citibank Simplicity Cash Back CC, no longer offered. I’m grandfathered in. 5% back on cash, groceries, drugstores. 1% on everything else and there is a $300/limit annually.

  12. jim says:

    You can simply join by paying the membership fee ( signup). There are other perks like a GEICO discount (it’s their organization-related discount, so if you already get that then this isn’t going to give you more of a discount).

  13. lili says:

    USAA Cash reward american express card:
    5% cash rebate on your first $650 of gas, grocery and dining purchases each month for the first year.

    Ongoing cash rebates up to 1.25% on your USAA American Express Card purchases.

  14. SCTrojan says:

    A comment on the Chase Freedom card….if you wait until you accumulate $200 in points, you can trade it in for $250 in cash. It’s a nice bonus on top of the 3% cash back for your top 3 categories and 1% cash back for everything else. And, this summer (2009), they’re having a promotion where if you register & spend $1500 in the travel & dining categories, all of your purchases will receive 3% cash back, regardless of whether they were your top 3 or not.

  15. Vicky says:

    Sctrojan, Did you have any problem with Chase Freedom card? Do all the stores/restaurants take it? I looked at it before, but since it does not have a Visa/MasterCard/Discover written on it was not sure if it works everywhere. Jim, do you know anything about this card? Thanks

    • Jim says:

      Hi Vicky, I don’t know if it’s a Visa or a Mastercard but it’s one of those so you won’t have any problems with acceptance.

  16. Doug says:

    The Schwab Invest First credit card gives you 2% cash back on EVERYTHING. No gimmicks, annual fee, tiers, and no categories that change constantly. I’ve had it for 6 months and love it. So if you spend money on a bunch of things 2% across the board is better than 5% on some and 1% on the rest.

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