Which Cash-Back Credit Cards are the Best? We Review 6 Popular Options
Cash reward cards are everywhere these days. If you use credit cards on a regular basis, chances are you already have one (or two or three) in your wallet. But if you don’t have a cash-back card yet, or you’re considering upgrading, check out this guide to popular options.
In theory, cash-back credit cards are pretty straightforward – you spend the money, then the credit card company gives you a percentage back. In practice, there are a few more wrinkles to the system; not all cash reward cards are created equal.
Here’s a rundown of six popular cash-back rewards cards and what you can expect from each one.
1. American Express Blue Cash Preferred
The American Express Blue Cash Preferred card comes with the most eye-popping reward on the market: 6% cash back on the first $6,000 you spend at grocery stores each year, and then 1% cash back after that. If you hit that limit in a year, you will have earned $360 in cash rewards! The card also gives you unlimited 3% cash back at gas stations and select department stores such as JC Penney’s and Sears, and unlimited 1% cash back on all other purchases.
These features make the American Express Blue Cash Preferred card quite appealing, but there is a catch. The card comes with a $75 annual fee, but if you’re using it on a regular basis, it’s easy to put aside a portion of your rewards to apply to the annual fee each year.
Where this card really suffers is the redemption process. There’s a $25 threshold to redeem your cash rewards, which is not uncommon. What makes me grind my teeth over this card is you can only redeem cash rewards in increments of $25. Last month, I had more than $40 in cash rewards, but since I didn’t pass the $50 threshold, I could only redeem $25. The remainder is still on my account, but I have no way of accessing it. This is the only card in this article with this restriction.
The other demerit this card earns is that an account credit is the only form of redemption — you cannot take your rewards in the form of a direct deposit or check.
This is still a great card — I’m able to easily meet the $25 threshold each month using it as my primary grocery card — but it doesn’t offer as much flexibility with cash redemption as I’d like.
2. Bank of America BankAmericard Cash Rewards Signature
I’ve discussed the BankAmericard Better Balance Rewards card and how to maximize its benefits on this site before, when we looked at how to get Netflix for free.
The BankAmericard Cash Rewards Signature card is a more traditional cash rewards card. It offers 3% back on gas and 2% back on groceries for the first $1,500 in combined gas and grocery store purchases each quarter, as well as unlimited 1% cash back on all other purchases.
The card also gives you a 10% bonus when you redeem your rewards into a Bank of America checking or savings account. Unfortunately, this doesn’t mean your 3% gas reward becomes a 13% gas reward — that extra 10% is calculated from the cash back amounts. If you take advantage of this program, that improves your rewards to 3.3%, 2.2% and 1.1% for the categories above.
This card also comes with a $25 threshold to redeem, but there are no restrictions on the amount you can redeem. That being said, it can be more of a struggle to reach that $25 threshold with the rewards limits.
3. Capital One Quicksilver
This card needs little in the way of introduction — Samuel L. Jackson has already raised its profile with his ubiquitous television ads.
This is the most straightforward of the cash rewards cards: 1.5% cash back on every purchase, with no rewards categories. Additionally, there’s no minimum to redeem your rewards, so you can get a check or statement credit in any amount at any time.
If you find it’s easier to automate the process, you can set up an automatic redemption preference for a set time each calendar year or when your rewards hit a specific threshold ($25, $50, $100 or $200).
This is a great card if you want cash back and don’t want to put a lot of thought into it.
4. Chase Freedom
The Chase Freedom card works differently from the cards above. In addition to 1% cash back on all purchases, Chase offers 5% cash back each quarter on up to $1,500 in combined purchases in that quarter’s bonus category. The bonus categories rotate throughout the year, and have included cash back at grocery stores, restaurants, gas stations and Amazon.
A significant difference between the categories on the American Express and Bank of America cards listed above and those on the Chase card is that you need to sign up for each quarterly category — the 5% bonus is not automatic.
Chase does have a lower threshold for redemption — just $20 (or 2000 points) — which makes it easier to get your hands on your cash. The big drawback is that you have to chase (no pun intended) rewards throughout the calendar year. While it’s great to have a fourth-quarter Amazon reward bonus, 5% cash back on groceries for three months is less appealing when another card can give you 6% back year-round.
5. Citi Double Cash
At first, the Citi Double Cash card seems to have a clear edge against Capital One Quicksilver. After all, 2% > 1%, right?
While I do like the Citi Double Cash Card and use it as my all-purpose (i.e. non-gas and grocery purchases) card, it is the only card where your reward depends on you paying your bill.
With this card, you get 1% back when you spend, and 1% back when you pay your bill. So when you charge $100 on your card, you automatically get $1 in rewards, but you don’t get the other dollar until you’ve paid off the $100 charge.
This is a great cash-back card, but bottom line, it’s only worth it if you pay your bill in full each month. There’s a $25 dollar minimum to redeem cash, but there’s a convenient direct deposit option for when you do so.
Discover is the grandfather of rewards cards — the upstart card that started the cash rewards trend nearly 30 years ago.
Discover has a lot in common with Chase Freedom: a standard 1% back on all purchases, with 5% back on rotating, quarterly categories.
This card does have its own set of issues. I’ve had to wait multiple billing cycles for a quarterly bonus to appear on my statement, and and some retailers do not accept Discover.
My favorite part about Discover is that, like Capital One, you can redeem your cash in any amount at any time. Having access to my cash rewards is important to me, so I appreciate the flexibility Discover offers.
All six of these cards have their flaws, and what works best for you depends on your personal spending habits. Hopefully this has provided you some guidance with which card (or cards) is the best fit for you!
Your Turn: What’s your favorite cash-back credit card? What do you like about it?
Douglas Clinton is a New Englander, an AmeriCorps Alum, a Kentucky Colonel and a playwright whose work has been performed across the U.S and abroad. He lives in Charleston, South Carolina with his fiancee and three cats.