The Best Cash-Back Credit Cards – Kiplinger's Personal Finance

Thinkstock
Looking for a great cash-back credit card? You’re hardly alone. In a survey from personal-finance site WalletHub, 79% of people said they are most interested in earning cash-back credit card rewards, a significantly higher percentage than those who prefer rewards points or miles.
To help you in your search, we have compiled a list of great cards that provide cash back on every purchase (or reward you with points that you can easily trade for cash at a strong value).
For each card, we’ve calculated a typical annual rebate based on spending patterns in the U.S. Bureau of Labor Statistics Consumer Expenditure Survey and assuming $25,000 spent on the card annually (unless otherwise noted). For cards that do not waive their annual fee the first year, we’ve subtracted the annual fee from the cash value of the annual rebate.
These cards provide simple and strong cash-back rewards on all spending. 
This card provides 2% cash back on all purchases, making it a great card to slip into your wallet if you prefer simple, straightforward rewards. Ways to redeem your cash back include as a statement credit, cash at the ATM with a Wells Fargo debit or ATM card (in $20 increments), gift cards ($25 increments), or a credit to a qualifying Wells Fargo credit card, checking account or mortgage. A nice side benefit: You get up to $600 per claim of protection for your cell phone against damage or theft if you pay your monthly wireless bill with the card. You pay a $25 deductible, and you get up to two paid claims per 12 months.
The first year you have this card, you’ll rake in cash back at a rate of 3% on every purchase, with no annual fee. After that, you’ll get 2.5% back—still an outstanding offer—and an annual fee of $99 kicks in. (The amount of spending that exceeds $10,000 each month does not earn rewards.) You collect rewards in the form of points, and they’re worth a penny each for a bank account deposit or statement credit ($50 minimum redemption). Anyone can become a member of Farmers Insurance FCU by joining the American Consumer Council and depositing $5 into a savings account.
Get 1% cash back when you make a purchase and an additional 1% back when you pay the bill, for a total of 2% on everything you buy. Rewards come in the form of Citi ThankYou points, and cardholders can exchange points earned (a total of two points for each dollar spent) at a rate of a penny each for a statement credit, check or direct deposit into a bank account. You can also exchange points for gift cards, travel and other options through the ThankYou program, but point values vary for those redemptions.
Earn top rewards in categories that may change each month or quarter. 
This card may prove lucrative if you spend significant bucks on your wireless plan, utilities, or TV and internet services. Each calendar quarter, pick two categories that earn 5% cash back on up to $2,000 in combined purchases; among the 12 choices are cell phone service providers; department stores; fast food; TV, internet and streaming services; and home utilities (note that some utility providers charge an extra fee if you pay your bill with a credit card). 
You also get 5% back on prepaid travel reservations made through U.S. Bank’s Rewards Travel Center and 2% back in one category of choice among three options: grocery stores, restaurants, or gas stations and electric-vehicle charging stations. All other spending earns 1% back. Redeem cash back as a statement credit, a deposit into a U.S. Bank checking or savings account, or a U.S. Bank prepaid debit card ($25 minimum redemption). Cash back expires after three years.
Earn 5% back on up to $1,500 spent each quarter in rotating categories. In 2022, first-quarter categories included grocery stores and eBay; second-quarter categories were Amazon.com and select video- and music-streaming services, including Disney+, HBO Max, Netflix and Spotify; and third-quarter categories are gas stations, car-rental agencies, movie theaters and select live entertainment. (Fourth-quarter categories have not yet been announced.)
Plus, all year you get 5% back on travel purchases made through Chase’s Ultimate Rewards program, 3% back on restaurant and drugstore purchases, and 1% back on all other spending. Rewards are tracked as Chase Ultimate Rewards points, which you can redeem at a rate of 1 cent each for cash back, travel bookings or gift cards
The card comes with a few extra perks, too, including a $5 Lyft credit when you take three rides in a calendar month, 5% cash back on Lyft rides through March 2025, and a $5 Fandango reward if you spend $20 on Fandango movie tickets or Fandango’s streaming service. You also get three months of free membership to DashPass (regularly $10 a month), which waives the delivery fee and reduces service fees on eligible orders through food-delivery service DoorDash. After three months, you’re automatically enrolled for nine months of DashPass membership at a rate of 50% off (you can cancel membership anytime). 
You choose one category that earns 3% cash back, and you can change your selection each calendar month. The six options are gas, online shopping, restaurants, travel, drugstores, and home improvement and furnishings. Get 2% back on spending at grocery stores and wholesale clubs. Each quarter, a combined $2,500 spending limit applies to the 3% and 2% categories—after that, purchases in those categories earn 1% back, and all other spending gets 1% back, too.
There’s no minimum rewards balance required to redeem your cash back as a statement credit, deposit into a Bank of America checking or savings account, or credit to an eligible Merrill cash management account. A $25 minimum applies to redemptions in the form of a check, automatic deposit into a Bank of America checking or savings account, or contribution to a qualifying Merrill 529 account.
This card is especially appealing for those who have significant balances in Bank of America deposit and investment accounts. Through the Preferred Rewards program, you can get a bonus as high as 75% on card rewards that you earn, depending on your account balances. For more, see the bank’s Preferred Rewards page
You get the best value with these cards if you stash rewards in a bank or investment account. 
This card is a perennial winner for the 2% rewards rate that Fidelity Investments customers can earn on every dollar spent. You get two points per dollar for each purchase, and points are worth a penny each when you redeem them as a cash deposit into an eligible Fidelity account (2,500-point minimum). You can divide rewards among up to five accounts—including a brokerage account, cash management account, 529 college-savings plan, retirement account, donor-advised fund, Fidelity Go robo-adviser account and health savings account—and even direct cash back into the account of a family member or friend (donor-advised funds are excluded). 
For Fidelity Wealth Management clients who use the card, cash-back rates for such redemptions are higher: 2.25% for those with $250,000 to $1 million in eligible assets, 2.5% for those with $1 million to $2 million, and 3% for those with $2 million or more. You can also exchange points for travel, merchandise, gift cards or statement credits, but the points are not worth as much for such redemptions.
If you’re a TD Bank customer, consider signing up for its Double Up card, which provides a total of 2% cash back on all spending when you redeem rewards into an eligible TD deposit account. Here’s how it works: Each purchase you make earns one point per dollar. When you redeem points into your TD account, they are worth a penny each, and TD deposits an additional 1 cent into your account for each point redeemed, producing a 2% return on card spending. You can also trade points at a value of a penny a piece as a statement credit, a deposit into a checking or savings account with another financial institution, gift cards, or travel, but you don’t get a match from TD, reducing your rewards rate to 1%.
Each purchase you make earns 1.529% cash back if you link your Upromise Program account to a 529 college-savings plan. (If your account is not linked to a college-savings plan, you get 1.25% back.) Upromise automatically transfers cash back to your 529 plan monthly if your rewards balance meets a required minimum. You can choose to have each purchase you make with the card rounded up to the nearest dollar and have the difference converted to cash back rewards, too.
These cards offer ample cash back on purchases at gas stations, grocery stores or both. 
This card offers 5% cash back on fuel purchases paid at the pump plus 5% back in quarterly rotating categories. In 2022, the categories are health and fitness (such as fitness clubs and sporting-goods stores) in the first quarter; travel in the second quarter; streaming, phone, cable and internet services in the third quarter; and Amazon purchases in the fourth quarter. Cash back is limited to $100 a month in the rotating categories. After that, you earn 1%, and all other spending on the card gets 1% back. Cash back is automatically credited to your monthly statement.
Anyone nationwide can become a member of Abound CU by joining nonprofit organization USA Cares (no fee), paying a one-time, $10 membership fee to the credit union and depositing $5 into a savings account.
This card offers an unrivaled 6% cash back on up to $6,000 in supermarket spending each year. (Grocery purchases at superstores such as Target and Walmart and at wholesale clubs don’t qualify.) Cardholders also get 6% back on a list of more than 30 streaming services, 3% back at gas stations and on transit (including taxi and ride-sharing services, train and bus fares, and parking fees), and 1% back on other spending. Redeem cash back as a statement credit. 
Cardholders also get a monthly statement credit of up to $10 for membership fees for the Equinox+ health and fitness app as well as a $7 statement credit each month for a Disney Bundle subscription through Disneyplus.com, Hulu.com or Plus.espn.com. 
Citi Custom Cash provides 5% cash back automatically in whichever of 10 categories you spend the most each month, and grocery-store and gas-station spending are among the qualifying categories. (The others are restaurants, select travel, select transit, select streaming services, drugstores, home-improvement stores, fitness clubs and live entertainment. The 5% rebate is limited to $500 in monthly spending.) All other purchases earn 1%. You earn rewards as Citi ThankYou points, which you can trade at a rate of a penny each for a statement credit, direct deposit or check. You can also trade points for other rewards, such as gift cards and travel, but redemption values vary.
 
Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site www.futureplc.com
© Future US LLC, 10th floor, 1100 13th Street NW, Washington, DC 20005. All rights reserved.

source

Leave a Comment