Credit cards have become the preferred method of payment for many people. However, not all credit cards are created equal. Some are better than others and this is usually (though not always) reflected in the relative popularity of any given credit card. One of the most popular credit cards is the cash-back rewards credit card. These credit cards give us a discount on many of the things we buy most often, such as groceries and gasoline. If you use your credit card a lot, using a card with an excellent cash-back rewards program will stretch your spending dollars.
The great thing about many of the best cash-back cards is that they have no annual fee. However, you’ll need to keep in mind that most of these no-fee cards are only given to customers with excellent credit.
Search the internet and you’ll find many different offers for cash-back cards. However, we have done some of the work for you by compiling the cash-back cards that have made most of the 2012 best-of lists.
Chase Freedom Visa
This card, issued by JP Morgan Chase, is considered by some to be the best of the cash-back cards. It offers a 5 percent cash back quarterly rotating discount on gas, groceries, department stores, travel, home improvement, restaurants, movies and more. When you use it to shop online, you get a whopping 10 percent back. And new card-holders receive a $200 check after spending just $500 within three months after opening the account. This $200 cash back is the largest of its kind, and it is not advertised on the Chase web site. And it is for a limited time.
Blue Cash Everyday
This American Express card offers 3 percent cash back on purchases in supermarkets, 2 percent on gas and department store purchases and 1 percent on all other purchases. The best thing about it is there are no rotating categories and no minimum spending limit. And it offers a 0-percent annual percentage rate for a year. Its signing bonus isn’t as good as the Freedom Visa, but it’s not bad: You receive $100 cash back if you spend $1,000 within the first three months.
Discover it (TM)
This card from discover features 5-percent cash back in various categories, like restaurants and movies, which change throughout the year at a maximum quarterly allowance. Any other purchases will earn an unlimited 1-percent cash back. There is 0-percent APR on purchases and balance transfers for 14 months, with no annual fee, no overlimit fee, no foreign transaction fee, and no late fee on your first late payment. There is also an 18 Month Balance Transfer version of the card, which features 0-percent APR on balance transfers for 18 months, and 0-percent APR on purchases for six months.
Citi Dividend Platinum Select
This card gives you 5-percent cash back on quarterly rotating categories, such as gas, groceries, department stores and travel, and 1-percent cash back on all other purchases. It also offers 5-percent cash back when you shop with Citi’s partner merchants. And also like many of the other best-of cards, customers get 0-percent APR on purchases and balance transfers during the first 12 months. (For more information on credit card balance transfers, see How To Get The Best Deal On A Credit Card Balance Transfer.)
PenFed Visa Platinum
This card stands out for offering 5-percent cash back on gas year round, a great benefit for those who drive a lot. This card also offers no annual fee. Unlike the other cards mentioned here, this card isn’t free, but it’s not expensive either. You can get one by paying $20 to join the National Military Family Association or join the Voices for America’s Troops group for a $15 one-time fee or donate (money or blood) to the American Red Cross. If you are a federal employee, a member of the U.S. military or a Red Cross employee, it’s free.
Before you make a decision about which cash-back credit card to choose, do your homework. That means reading the fine print – as painful as that may be -- and understanding the terms for different types of purchases. Failure to do so may lead to some unpleasant surprises later.