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Best Cash Back Reward Credit Cards

Posted By Jim On 09/03/2008 @ 3:26 pm In Credit | 17 Comments

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.
Second Runner Up: Blue Cash from American Express [6] [3] 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

The card I use for restaurants is the Citi mtvU Card [4] 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 [5] 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

I profiled some of the best gas reward cards [3] 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?


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[3] Second Runner Up: Blue Cash from American Express: http://www.bargaineering.com/articles/cards/amex-blue-cash.php?tag=bestrewardscardBNR

[4] The card I use for restaurants is the Citi mtvU Card: http://www.bargaineering.com/articles/cards/citi-mtvu.php?tag=bestrewardscardBNR

[5] best student credit card: http://www.bargaineering.com/articles/best-student-credit-cards.html

[6] Blue Cash from American Express: http://www.bargaineering.com/articles/cards/amex-blue-cash.php?tag=bestrewardscard

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