There are two main types of credit cards with rewards: cash-back cards and travel cards. Cash-back cards pay a percentage of the value of any purchase back to you. For every dollar you spend, travel credit cards award you points or miles; you redeem those rewards for free flights, hotel stays, and more. For everyone, no single rewards card is right. All is about how you spend money and what kind of incentives you value.
How cash-back rewards work
You receive rewards with a cash-back credit card equal to a percentage of the amount you spend. Depending on the card you use and where you use it, cash-back rewards vary from 1% to 6%-that is, 1 penny to 6 cents per dollar spent. Your monthly statement will show you the rewards you have received so far; online, you can also track your rewards.
There are three main categories of cash-back cards: flat-rate, tiered and bonus-category.
FLAT-RATE CARDS
For any order, the easiest cash back cards receive the same percentage no matter where you use your wallet. Examples are:
Quicksilver Cash Rewards Credit Card from Capital One, which earns 1.5% cash back on transactions.
The Citi® Double Cash Card-18 month BT bid, receiving 2% on purchases-1% for each dollar you spend and 1% on each dollar you pay back.
TIERED CARDS
In those types, certain cards pay a higher premium and 1 percent back on all else. Each card has a structure of its own, designed to appeal to a particular category of customer. For instance:
A decent card for families is the Blue Cash Preferred® Card from American Express. It earns 6% back on U.S. retail spending of up to $6,000 a year (1% after that); 6% back on chosen U.S. streaming services; 3% back on U.S. gas stations and transportation expenditures such as taxis, tolls, trains and buses; and 1% elsewhere (terms apply).
For people who want a night out, the Capital One SavorOne Cash Rewards Credit Card is a nice option. It costs 3% for catering and entertainment, 2% for grocery stores and 1% for all other transactions.
CARDS WITH ROTATING OR CHOOSE-YOUR-OWN BONUS CATEGORIES
Cards that change from time to time with bonus categories need more effort from you. The bonus categories online must be “opt in” or “activate”. Some cards also let you pick your own categories (or make you, depending on your perspective). If you have opted in, a higher rate is received by spending in the bonus categories, but the amount of spending available for the bonus rate is usually restricted. Examples: Examples:
In incentive categories that adjust every three months, The Chase Freedom® pays 5 percent cash back, for up to $1,500 in spending per quarter. 1 percent is paid on all other spending. Supermarkets, gas stations and restaurants have traditional quarterly categories.
You can configure your categories via the U.S. Bank Cash+TM Visa Signature® Card. In combined quarterly spending on two categories you select from a fairly comprehensive list, you receive 5 percent back on up to $2,000, plus 2 percent in one “everyday” category you choose, such as gas stations or grocery stores. All other transactions offer a refund of 1 percent. Class options are subject to change, and every quarter you must make your choices.
How to redeem cash-back rewards
Most individuals don’t necessarily take their cash-back incentives in the form of, well, cash back, despite the word “cash back,” Applying your rewards to your account as a statement credit is the simplest and most common thing to do. The amount you owe is directly reduced by this. (For example, if your balance is $80, and you pay $30 in cash back, your balance becomes $50.) You’re not getting the issuer’s literal cash back, but less cash is going to come out of your wallet to pay the bill, so the result is the same.
You could also have your rewards deposited directly into your bank account or collect them as a check in the mail, depending on the card. Some cards set a minimum amount, usually $20 or $25, to be redeemed. Other cards do not have a minimum redemption limit.
Cash back — high flat rate
Citi Double Cash Card – 18 Month BT Offer
$0
Rewards Rate
1%-2%
Cashback
Intro offer
$0
Rec Credit Score
720-850
Excellent
Pay at least the minimum due on time, to earn cash back.
Offer for Balance Transfer: 0 percent intro APR on 18 month balance transfers. After that, based on your creditworthiness, the variable APR will be 13.99 percent – 23.99 percent.
Transfers of balances do not earn cash back.
If you transfer a balance, interest on your purchases will be charged unless you pay your entire balance (including balance transfers) each month by the due date.
There is a balance transfer fee, whichever is greater, of either $5 or 3 percent of the amount of each transfer.
Based on your creditworthiness, the standard variable APR for the Citi Flex Plan is 13.99 percent – 23.99 percent. At the discretion of Citi, Citi Flex Plan offers are made available.
Cash back — bonus categories + high ongoing rate
Chase Freedom Unlimited
$0
Rewards Rate
1.5%-5%
Cashback
Intro offer
$200
Rec Credit Score
690-850
Good – Excellent
Earn unlimited cash back of 1.5 per cent on all your transactions.
Earn 5% on travel purchased by Chase, 3% on restaurant and drugstore dining, and 1.5% on all other transactions.
No yearly tax.
0 percent Intro APR on transactions for 15 months after account launch, then a variable APR of 14.99 – 23.74 percent .
No minimum for cash back to be redeemed. As long as your account is open, Cash Back rewards do not expire.
Cash back — bonus categories + cash-back match
Discover It Cash Back
$0
Rewards Rate
1%-5%
Cashback
Intro offer
Cashback Match™
Rec Credit Score
690-850
Good – Excellent
Earn 5% cash back on daily transactions at various locations per year, such as Amazon.com, grocery stores, restaurants, gas stations, and when you pay via PayPal, when you enable, up to the quarterly limit.
Plus, you immediately receive unlimited 1% cash back on all other transactions.
Redeem cash back, at any time, in any number. Never expire incentives.
At the Amazon.com checkout, use your rewards.
According to Investor’s Company Daily, #1 Most Trusted Credit Card
No yearly tax.
99 percent of the locations that earn credit cards accept Discover nationally.
Travel rewards — bonus categories
Chase Sapphire Preferred Card
$95
Rewards Rate
1x-2x
Points
Intro offer
60,000
Points
Rec Credit Score
690-850
Good – Excellent
2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
With Pay Yourself BackSM, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash’s subscription service. Activate by 12/31/21.
Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.
Cash back — up to 5% in multiple categories + cash bonus
Chase Freedom Flex
$0
Rewards Rate
1%-5%
Cashback
Intro offer
$200
Rec Credit Score
690-850
Good – Excellent
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drugstores, and 1% on all other purchases.
No annual fee.
0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 – 23.74%.
No minimum to redeem for cash back. Cash Back rewards do not expire as long as your account is open.
Flexible foodie rewards + no annual fee
U.S. Bank Altitude Go Visa Signature Card
$0*
Rewards Rate
1x-4x
Points
Intro offer
20,000
Points
Rec Credit Score
720-850
Excellent
Earn 4X points on takeout, supply of food and dining
Earn 2X points at grocery stores, grocery distribution, gas stations and streaming services
$15 voucher for annual purchases of streaming services like Netflix and Spotify
No Yearly Fee*
On all other qualifying transactions, 1X point per $1
Low Introductory APR on sales and transfers of balance
Non-expiring points
Travel rewards — no annual fee
Wells Fargo Propel American Express Card
$0
Rewards Rate
1x-3x
Points
Intro offer
20,000
Points
Rec Credit Score
690-850
Good – Excellent
$0 annual premium and no fee for conversion to foreign currency
Earn 3X points when you eat out and order in
On popular streaming services, earn 3X points
On gas stations, rideshares and transit, gain 3X points
Earn 3X travel points, including airlines, hotels, homestays and car hire.
On other transactions, earn 1X points
To learn more about the product functionality, terms and conditions, click “Apply Now”
Cash back — families (groceries, gas, commuting, streaming)
Blue Cash Preferred Card from American Express
$95
Rewards Rate
1%-6%
Cashback
Intro offer
$250
Rec Credit Score
690-850
Good – Excellent
6 percent Cash Back at U.S. supermarkets on purchases of up to $6,000 per year (then 1 percent ).
6 percent Cash Back on select U.S. subscriptions for streaming.
3 percent Cash Back (including taxis/rideshare, parking, tolls, trains, buses and more) at U.S. gas stations and on transit.
On other purchases, 1% Cash Back.
Low intro APR: 0 percent on purchases from the account opening date for 12 months, then a variable rate, 13.99 percent to 23.99 percent .
Plan It® offers the opportunity to select purchases of $100 or more with a fixed fee to be split into monthly payments.
In the form of Reward Dollars that can be redeemed as a statement credit, Cash Back is obtained.
Relationship rewards
Bank of America Premium Rewards credit card
$95
Rewards Rate
1.5x-2x
Points
Intro offer
50,000
Points
Rec Credit Score
690-850
Good – Excellent
Earn unlimited 2 points for each $1 spent on purchases for travel and dining and unlimited 1.5 points for each $1 spent on all other purchases
If you are a member of Bank of America Preferred Rewards, you can earn 25% to 75% more points on every purchase.
The points you can earn are not limited and your points do not expire.
Redeem to the Bank of America Travel Center for cash back as a statement credit, deposit into eligible Bank of America® accounts, credit to eligible Merrill® accounts, or gift cards or purchases
Get up to $100 per year in incidental airline credits and up to $100 in TSA Pre®/Global Entry Statement Credits every four years.
No Fees for Foreign Transaction
Low annual $95 fee
Travel rewards — flat-rate rewards
Capital One Venture Rewards credit card
$95
Rewards Rate
2x
Points
Intro offer
60,000
Points
Rec Credit Score
690-850
Good – Excellent
Earn on every purchase, every day, unlimited 2X miles
Miles will not expire and there is no limit to how much you can earn for the life of the account.
Receive an application fee credit of up to $100 for Global Entry or TSA Pre®
Fly any airline, stay in any hotel, any time; no dates for blackouts. Plus transferring your miles to over 10+ loyalty travel programs
No Fees for Foreign Transaction
