What is a cash back card?

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AMEXPlatino86
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Location: New York, NY

What is a cash back card?

Postby AMEXPlatino86 » Tue Feb 26, 2013 4:51 pm

Sorry for the ignorance but majority of my cards are rewards based (so I have the points system). Can someone explain to me what how the whole cash back system works?
What kind of situations they are best used for?
What are good cards to get cash back? :money:
Wells Fargo Platinum 2.100 (5/2011-cld 7/12/14)
AmEx Platinum (6/12)
Barclays Apple (6/12)
AMEX Gold Delta (5/13)
Marriott Rewards (7/14)

My credit score :cool:
EQ: unknown
EX: 762
TU: 752


Sevenfeet
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Postby Sevenfeet » Tue Feb 26, 2013 6:57 pm

Cash back cards are a pretty simple concept. Instead of acquiring points or miles for purchases, you just get cold hard cash back. So if your card gives you 3% cash back on gas, and you spend $500 on gas in a month, then you get back $15. How you get the money back depends on the card. Some are issued as statement credits while others transfer the money to a linked savings or credit account. So my Bank of America Cash Rewards card is linked to my Bank of America savings account and I see the money that way. Finally, if there is no linked savings/checking account, some allow you to redeem with prepaid Visa/MC gift cards.

Discover pioneered the cash back card back in the 80's but nowadays, everybody has some version of one.
Cards:
American Express Platinum (NPSL)
Penfed Platinum Reward Visa ($28K)
Chase Freedom Visa ($25K)
Fidelity American Express ($20K)
American Express Blue Cash Preferred ($20K)
Bank of America Cash Rewards MasterCard ($20K)
Citi Thank You Preferred Visa ($9.5K)
Chase Sapphire Preferred ($7.5K)
US Bank Cash + Visa Signature ($7K)
Discover IT ($4K)

AMEXPlatino86
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Postby AMEXPlatino86 » Tue Feb 26, 2013 7:53 pm

So what is good to use for? What types of cards are good?
Wells Fargo Platinum 2.100 (5/2011-cld 7/12/14)
AmEx Platinum (6/12)
Barclays Apple (6/12)
AMEX Gold Delta (5/13)
Marriott Rewards (7/14)

My credit score :cool:
EQ: unknown
EX: 762
TU: 752

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bisbicos
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Postby bisbicos » Tue Feb 26, 2013 9:18 pm

Discover "it" card probably has the best cash back program out there. Chase Freedom Card is also a very popular cash back credit card.
Credit Cards
American Express: Fidelity Rewards (2% cash back) 9.5k
Zync NPSL
Discover: Discover More (5% rotating categories) 12k
Mastercard: Chase Freedom (5% rotating categories) 4.6k
Visa: Citi Forward (5x pts on restaurants) 15.7k
Citi Dividend (5% rotating categories) 5.6
Capital One Journey (1.25% cash back) 1.25k
BofA AAA (5% on gas) 2.5k
PenFed Platinum Rewards (5% on gas 3% groceries) 7.5k

Future Cards
US Bank Cash +
Chase Ink

hollisacooke92
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Location: New Jersey

Postby hollisacooke92 » Tue Apr 02, 2013 7:46 pm

Citi Dividends Platinum Select

Scoach
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Location: Florida, United States

Postby Scoach » Tue Apr 02, 2013 10:23 pm

bisbicos wrote:Chase Freedom Card is also a very popular cash back credit card.


I thought the Freedom card was a points card? Am I missing a perk I don't know about?
AmEx - Platinum, Gold, Bluebird
Chase - CSP, Freedom
HSBC - Orchard Bank (1999)

Gamma
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Location: Los Angeles, CA

Postby Gamma » Wed Apr 03, 2013 12:04 am

Scoach wrote:I thought the Freedom card was a points card? Am I missing a perk I don't know about?

Freedom points can be redeemed for cash back. 1 point=1 cent.

Scoach
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Postby Scoach » Wed Apr 03, 2013 1:11 am

Gamma wrote:Freedom points can be redeemed for cash back. 1 point=1 cent.


Right, I was aware of that. The initial post in the thread seemed to acknowledge points/rewards cards, so I was confused by the suggestion of the Freedom as a cash back card.

Thanks.
AmEx - Platinum, Gold, Bluebird
Chase - CSP, Freedom
HSBC - Orchard Bank (1999)

tigerowl06
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Postby tigerowl06 » Wed Apr 03, 2013 1:32 am

AMEX Blue Cash (Everyday and Preferred) are nice cards. You might try for one after your Gold card turns 1 year old.

There are no "situations" in which a cash back card is necessarily better than a rewards points card. Often they can be the same. It is just a little more straightforward and thus harder for the issuer to devalue the rewards system without it being obvious. If you're working on points, the issuer can adjust or eliminate redemption options to reduce their real value. Also, if you cannot redeem for cash (at least not at a favorable rate), then you will spend some time fishing around their rewards site to figure out how to get the best bang for your buck. Much simpler with the cash rewards system.

Basically, people like them because they are minimum B.S. cards.
Chase Freedom ($2.5K, 10/2009)
Discover it ($6K; 03/2011)
Amex BCE ($19.5K; 02/2013 - 2011 BD)



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