Cash-back cards, thanks to their simplicity and value, can supplement nearly every rewards strategy.
If you don’t have one already, we’ve ranked what we feel to be the strongest cash-back products on the market for 2016.
As always, review our evaluations carefully — our highest-ranked cards may not be the best for your circumstances.
A word on our ranking standards
While some cards listed below are our advertising partners, our rankings aren’t based on that. Here’s what we did take into account:
- Return on spending: What good is a cash-back card of you’re not earning enough to justify putting most of your spending on it? Some cards give a flat rate of cash back, while others boost your earnings in certain categories, so it can be tricky to compare cards based on this standard. If a card concentrates its highest rate of cash back in a category, we took into account whether those categories matched regular expenses for most families.
- Redemption flexibility: Some cash-back cards are more flexible than others when it comes to redeeming. While some freeze your rewards until you’ve earned a certain amount, others will let you redeem a dollar at a time if you want to. Some cards will even allow you to redeem in real time while shopping online or at certain retailers.
- Reward-boosting potential: Some cards allow you to earn more than the advertised percentage of cash back, either by giving extra cash back for shopping with partner retailers, or by allowing you to redeem in ways that make your rewards worth more. We viewed this potential to maximize and strategize as a plus in our rankings.
- Sign-up bonus: A good sign-up bonus gives you a head start in the first few months of card ownership. Even a card with a higher rate of cash back may lag behind one with a generous sign-up bonus for the better part of the first year.
- Other unique features: Whether it’s a free FICO score or useful apps, a card’s extras helped determine its ranking.
Note: Because we recommend that rewards-seekers don’t carry balances, we did not take APRs into account.
1. Chase Freedom
In addition to 5 percent back (on up to $1,500 in spending per quarter) in rotating shopping categories, this card gives you 1 percent back on everything else.
Why we ranked it where we did: Put simply, this card has a good answer to nearly all our ranking categories (listed above).
Of all the cards we analyzed, it has the most redemption flexibility. You can redeem for bank account deposits, statement credits, gift cards, merchandise, travel, and in real time on Amazon.com. You can even download the Chase Freedom mobile app to immediately redeem points at partner stores, restaurants and theaters.
Want to earn more points? Chase’s shopping portal lets you earn extra cash back if you shop with partner retailers.
If you want to take things up a notch, you can couple the Freedom with its siblings, the Chase Sapphire Preferred or the Chase Ink Plus and attain the ability to transfer rewards earned with the Freedom to various hotel and airline loyalty programs. This potential to build on your rewards strategy is what helped the Freedom finish in first place.
The card’s sign-up bonus has been historically generous for the past several years as well.
Caveats to consider: You have to enroll in the bonus 5 percent categories each quarter, and those earnings are limited to $1,500 in spending per quarter (after which you’ll get knocked down to 1 percent back). You also have to accrue $20 in rewards before you can redeem.
2. Discover it
This card finished right on the heels of the Freedom (see above) and has many of the same benefits, including user-friendly bonus categories and rewards flexibility. With it, you’ll earn 5 percent in quarterly bonus categories (on up to $1,500 in spending per quarter) and 1 percent on other purchases.
Why we ranked it where we did: Depending on your needs, it could be a toss-up between the ‘it’ and the Chase Freedom. What put the Freedom slightly ahead for us was the ability to pair it with one of Chase’s higher-tier cards later and increase your rewards reach. That’s not a possibility with Discover.
But there’s still a lot to recommend the Discover it. There’s also no redemption minimum, so you can redeem any amount (which is an advantage over Chase).
Via Discover Deals, you have the chance to earn more cash back on your purchases (just as you would via Chase’s shopping portal) or even get an instant discount at check-out. The card’s sign-up bonuses have historically been compelling, too, whether it’s a certain amount of cash back after hitting a spending threshold, or the promise to double all points earned during the first year.
The card offers unique features as well, including free access to your FICO score and the ‘Freeze it‘ feature, which lets you temporarily lock your account via an app if your card goes missing.
Caveats to consider: Your 5 percent bonus-category earnings are capped at $1,500 in spending per quarter (after which you’ll earn 1 percent back). Discover also has less acceptance than Visa or MasterCard, especially abroad.
3. Blue Cash cards from American Express (a CreditCardForum advertising partner)
There are two versions of the Blue Cash. The Blue Cash Everyday (no annual fee) gives you 3 percent back at U.S. supermarkets (on up to $6,000 in spending per year); 2 percent back at U.S. gas stations and select department stores; and 1 percent back on other purchases. The Blue Cash Preferred gives 6 percent back at U.S. supermarkets (on up to $6,000 in spending per year); 3 percent back at U.S. gas stations and select department stores; and 1 percent back on other purchases.
Which version is best for you will depend on whether your spending justifies an annual fee.
Why we ranked them where we did: What these cards have going for them is simplicity. The categories don’t change, so you’re getting elevated cash back on groceries, gas and department store purchases all year long. Plus, you get free access to your FICO sore and, if history is any indication, a sign-up bonus may be available as well.
Caveats to consider: We docked these cards for lack of redemption flexibility and lack of opportunities to boost rewards. There’s no shopping portal or deals program tied to these cards, and the only redemption option is statement credits. The redemption minimum of $25 may also keep your rewards under lock-down for longer than you’d like.
The card offers an unlimited 1 percent back on all spending and then another 1 percent back (also unlimited) when you pay charges off.
Why we ranked it where we did: If you’re looking for a low-maintenance card, the Double Cash is worth a look. Beyond paying off your balances in full and on time, there’s no strategizing involved. You also get free FICO score access.
Put another way, though, this card isn’t that exciting. Historically, it hasn’t offered sign-up bonuses, which might cause it to lag behind the cards above for the first year at least. Your redemption options are limited to statement credits, a check or gift cards, and your redemption value is locked at 1 cent per reward point for all of those. There’s also no way to boost your earnings via a portal or deals program.
Caveats to consider: Consistent lack of sign-up bonus and a relatively high redemption minimum ($25).
Why we ranked it where we did: When deciding between this one and the Citi Double cash, it came down to long-term rewards. After you claim the sign-up bonus in the first year (the Quicksilver has, historically, offered one), the Quicksilver probably won’t be able to keep up with the Citi Double Cash, assuming you pay your balance on time. It also does not give free access to your FICO score.
But let’s give credit where it’s due – this card has some features that could make it a more consumer-friendly choice. It waives foreign transaction fees and has no redemption minimum. You also don’t have to wait to pay your bill to get the other half of your rewards, as you do with the Double Cash.
Caveats to consider: You earn and redeem rewards at a fixed rate. While the Capital One is offering every 10th Uber ride free up to $15 when you pay with your Quicksilver card through March 31, 2017, there’s no shopping portal and no rewards program that allows you to get more out of your points for strategic redemptions.
Last updated July 27, 2016