Best Cash Back Credit Cards

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Update: This offer for Barclaycard Arrival Plus™ World Elite MasterCard® is expired, but there’s currently an opportunity to earn 50,000 miles after spending $3,000 within first 90 days of having the card. Learn more about the special offer here.

I am very fortunate to have been traveling with my family from a very young age, and my love of flying and travel comes from those early transatlantic trips with my parents. We often have different priorities when it comes to travel (if my mother had her choice she would still be booking the first row of the smoking section on Condor), and like many of you probably do for your family, I do my best to help them leverage their spending in a way that makes sense for the way they want to travel. My parents tend to favor a very simple strategy, while my brother has typically been interested in earning points quickly, which has allowed us to take some pretty fun trips together.

He and his wife recently welcomed their first child, and even prior to that his work situation had been severely limiting the amount of time and flexibility he has for travel. It’s a bit inhumane to only have a handful of long weekends off a year, in my opinion, but he thinks it’s ridiculous that I blog from the bathtub, so who am I to judge?

At any rate, he has decided that the best and only option for him is a cash back card. And he won’t shut up about it (this is roughly one of 47 texts I received on the topic):

Brother-Text

For the record, I am not at all opposed to cash back cards in general. I think that they’re a valuable part of a card portfolio, and are a great way to offset some of the expenses of award travel, if nothing else. I prefer to focus the bulk of my energy on earning points in programs that offer more aspirational opportunities, but for some situations (like my brother’s), a cash back card might make the most sense.

So, for those people with new babies who don’t necessarily want to travel internationally in premium cabins in the near future, which are the best cash back cards?

Cash back
What’s actually in my wallet #highroller #happyroomattendantshappylife

Fidelity® Investment Rewards® American Express® Card

This is one of the most lucrative cash back cards out there. It offers a flat 2% cash back on purchases without an annual fee. That’s a pretty darn good return for a no annual fee card, and makes it a “keeper.” 

The card does have foreign transaction fees, but they’re “only” 1%, should you want to use it internationally (that being said, hopefully you have a better credit card for international travel which waives foreign transaction fees altogether). The signup bonus isn’t especially lucrative, but you can earn 5,000 bonus points after you make at least $500 in purchases within the first 60 days (that’s enough for $50 in an eligible Fidelity account). I’m not a huge fan of the fact that the money goes into a Fidelity account, since that’s not who I bank with.

Citi® Double Cash Card

This is a no annual fee credit card that offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases. There are no limits to the amount of cash back you can earn. That makes it as lucrative as the Fidelity Card, with the added bonus of being accepted in more places, given that it’s a MasterCard.

The downsides of the card are that there’s no sign-up bonus, and it does have 3% foreign transaction fees.

Blue Cash Preferred® Card from American Express 

This card offers 6% cash back at U.S. stand-alone supermarkets (on first $6,000 of spend per calendar year, and 1% thereafter); 3% cash back on gasoline at U.S. stand-alone gas stations and at select major department stores; 1% cash back on other purchases.

The Blue Cash Preferred® offers an amazing earnings rate if you spend a lot on groceries and gas, but keep in mind the card does have a $95 annual fee and 2.7% foreign transaction fees.

Blue Cash Everyday® Card from American Express 

For a no annual fee card, the Blue Cash Everyday® is a good option. The card offers 3% cash back at U.S. stand-alone supermarkets (on first $6,000 of spend per calendar year, and 1% thereafter); 2% cash back on gasoline at U.S. stand-alone gas stations and at select major department stores; and 1% cash back on other purchases.

You still pay 2.7% in foreign transaction fees, but if you’re looking for a cash back card without an annual fee this could be a good choice.

Barclaycard Arrival Plus™ World Elite MasterCard®

If you plan on traveling anywhere at all, ever, then this is the best option, in my opinion.

A lot of people would say actual cash back is more valuable than cash back towards travel. For me that’s not the case, and I am guessing for most people reading this blog, that’s not the case either. Unless you spend less on travel than you’d earn in rewards, it’s the same thing. And that’s simply to say that the same amount of cash back would be equally valuable to me regardless of which form it came in.

With the Barclaycard Arrival Plus™ you’re essentially earning ~2.22% cash back towards travel, while with the Fidelity Investment Rewards American Express Card you’d be earning 2% cash back.

The Barclaycard Arrival Plus Card doesn’t have an annual fee the first year either, so you do come out ahead with it, by ~0.22% per dollar spent. After that, the $89 annual fee makes the math more complicated, but I still give the edge to the Barclaycard over the Fidelity card, at least for me personally.

If you’re looking at international travel, there’s additional value in having the Barclaycard Arrival Plus Card, given the waived foreign transaction fees and Chip + PIN technology.

So what’s the difference?

There are pros and cons to each of the above cards. I find the Citi® Double Cash Card to be the most straightforward among these cards, given that it offers a high return on everyday spend and the cash back can be earned in the form of a statement credit (I find that easier than having to open a Fidelity account and depositing the money there). The Fidelity® Investment Rewards® American Express® Card does offer a $50 statement credit, though if you’re going exclusively for a cash back card I don’t think that offsets the two biggest benefits of the Citi Double Cash Card (the fact that it’s a MasterCard and that the cash back comes in the form of a statement credit).

The TrueEarnings® Card from Costco and American Express, TrueEarnings® Business Card from Costco and American Express, Blue Cash Preferred® Card from American Express, and Blue Cash Everyday® Card from American Express can all make sense depending on your specific spend patterns. They’re not as straightforward as the Citi or Fidelity Cards, but can also offer a much higher rate of return if your spend is focused in certain categories.

Even if you’re not big into aspirational international premium cabin travel at the moment, there’s a lot of value in the Barclaycard Arrival Plus™ World Elite MasterCard®. You essentially earn ~2.22% cash back with the card, which is a higher return on everyday spend than the other cards. On one hand it’s tough to justify the annual fee after the first year compared to a 2% cash back card, though on the other hand there’s a lot of value in having a card with no foreign transaction fees and Chip & PIN technology, so I think the value of that shouldn’t be underestimated.

Bottom line

Given my brother’s situation, I would probably go with the Citi® Double Cash Card, which is tough to beat in terms of simplicity and return on everyday spend.

What do you think? Is anyone else switching to primarily cash back products?

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Comments

  1. I have been reading your blog for a few years now and this is the first time I have read that you have a brother.

  2. no reference to the Quicksilver by CapitalOne? It’s admittedly not the greatest cards in the larger scheme of things, but for cash-back specifically, I find it more flexible than the Fidelity Amex. It’s 1.5% cashback on everything, no annual fee, no foreign transaction fees, more universally accepted than the AmEx, and you get cash back directly rather than having it placed in a brokerage account (which admittedly is not a biggie as you can always withdraw instantly). Plus you get a $150 bonus for signing up.

    I live in New York and don’t have a car, and also am not a big food spender. Thus, gas and dining, which are the two biggest categories in the revolving ‘5%’ cards don’t get me much.

    Tangential to the above, Lucky, I know you’re a big fan of both the Chase Sapphire Preferred and the Barclay’s Arrival. If I were to get one of the two, do you have a preference for one over the other?

  3. I think there are better cashback options for normal people, even if don’t want to churn and get several cards a year, such as BoA, Wells Fargo, and TD.

    For long term, and with some decent assets, I think the BoA offer is good for someone like my parents…2.625% back on everything is very good! (previously blogged about by Gary http://viewfromthewing.boardingarea.com/2014/08/16/card-earns-2-6-back-spending/)

    WF and TD have good offers for 6 months, and I’d recommend to your brother to use both back to back for a year, then drop down to 2% with either Arrival or FIA.

    WF is 5% on gas, groceries, and drugstores. If he’s very organized, he can buy 500 gcs from CVS, and then it would be a virtual 5X everywhere.

    For TD Cash Rewards, it’s 5% on gas, groceries, dining, telecom and utilities.

  4. I have the Barclays Arrival and love it. But now I got the Bank of America Travel Rewards card. It is 1.5% cash back when applied to travel expenses, but as a Platinum member with BOA I should get a 75% bonus….1.5%*1.75 = 2.625%…hard to beat…and you get $100 bonus after $500 spend.

  5. You’re screwing your brother out of .625% by not recommending the BofA card. No foreign exchange fee either. I know CC referrals matter but… For your own brother??

  6. Good write up on cash cards if I ever decide to pursue one I now know where to look for guidance, thanks. And BTW thanks also for the comments on what row of seats your mom would pick to fly on, and especially the one about your brother taking issue with ‘where’ exactly you do your work at times; they certainly made me laugh. This post was both informative AND entertaining, nice!

  7. Stvr, your comment is moronic as usual. Do you even realize that, in order to get that .625%, you need to tie up $100K in a BoA account? And even if someone has that kind of money lying around, are you aware of how BoA’s fees compare (unfavorably) to other checking/savings/brokerage accounts, and how much money you’d have to spend to justify the incremental .625%? Apparently not.

  8. I do like how virtually blog that promotes the Blue Cash Preferred/Everyday don’t point out you can still get the Old Blue Cash card (5% on grocery/pharmacy/gas with no cap, unlike the measly $6k cap on BCE/BCP) which is far, far superior to BCE/BCP with any tiny amount of effort expended.
    And @David, according to FrequentMiler, you don’t need to tie that $100k up forever. You need to move it in for 3 months to qualify, and then you can move it out. You’ll remain at that level for another a full year before you need to move it back for another 3 months. So basically, you just need 100k in movable assets, that’s all. And to be willing to put up with that level of hassle.
    Or you can just use the Old Blue Cash (or gift cards purchased with it) on most purchases, get the 4-5% back, and call it a day.

  9. What about Cap One’s Venture Rewards card? It’s basically like cash back as it offsets any travel purchases. 2% cash back and it’s a Visa. It’s a $59 fee but $400 sign up bonus. I just got it and the Fidelity card. If the Citi double had a sign up bonus, I would’ve gone for that. But the venture rewards bonus was too good to pass up.

  10. I have no interest in cash back cards personally (I get far more leverage out of miles and points), but some folks just don’t like to “play the game”. When I learned that my sister (who travels a great deal internationally and domestically) spent 50,000 miles for a domestic United Standard Award ticket she could have purchased for under $500, I recommended she ditch her old United card (which didn’t even give her a free checked bag or last seat Standard Award availability) and replace it with the Barclay Arrival Card. Since the Arrival is a Mastercard, she asked if she should have a Visa card as a backup. I suggested she convert her United card to a no-fee Chase Freedom card. A very good solution for her!!

  11. David, if you don’t want to look like a moron…research before you post. You need to have 100.000 balance at BOA to have Platinum benefits…not only cash deposits but brokerage accounts and retirement accounts balances also qualify. What fees are you talking about? I pay no fees for nothing at BOA. And if you are talking about brokerage fees I get 100 FREE TRADES A MONTH….

  12. One thing not mentioned about Fidelity that you drop it into a cash management account. Its like a checking account and you can write checks against it. Somebody here mentioned more complicated( brokerage accouunt). Far from the reality. You get a ATM card useable anywhere in the world WITH zero ATM fees anywhere. That is nice and I use it all the time when I need cash anywhere. Its a fee free 2% card. I have many cards at 2% for business and personal. I like to work with a large variety of products with different banks. The Arrival card ( I have it) it way overplayed. It was great when you could buy AGC and get the bonus 4%. That deal is over. I have 2 Cap One cards that are 2% for redemptions of gift cards. To me those are as usable for cashwith a wide range of redemptions.

  13. Ben,
    For cash back cards the Sallie Mae Mastercard from Barclays is a great one for me. Each month allows 5% on groceries, up to $250 spend. 5% on gas, up to $250 spend. 5% on bookstores including Amazon.com, up to $750 spend. It’s not good for manufactured spend, but for cash back on everyday spend, for a singleton, it’s hard to beat. Although none of the bloggers push it, it’s the best for me. No annual fee.

    Maybe if your brother and his wife had one each, his family could profit.

  14. Amex Simply Cash Biz card is 2% with no AF and public $250 signup bonus. 5% at office supply and Telecom up to $25K per year.
    CapOne has the Spark Biz card 2% with $59 AF (waived first year) and $300 public bonus (or $500 targeted/waived first year). CapOne has very easy redemption process for any amount (no scummy $25 mins like some other cards).

    The Arrival is grossly over hyped. If you’re into the miles/points game, you don’t have that many cash expenses. Ive stopped doing MS on it because I’ve got more rewards than I can use. All the 2% spend goes on the Spark as I can pay anything or redeem for cash in any amount. Also, CB posts as soon as charges post, so no waiting for statement to close.

    That said, 95% of all my CB is on 5% cards.

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