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The Best Cash Back Credit Cards

Posted on September 30th, 2011 | admin

Getting Paid for Spending Money: Cash Back Rewards


Best Cash Back Credit Card

Credit cards have become an everyday part of our lives and our financial planning.  Sometimes we want the extra cash flow, sometimes it is for convenience and easy accounting at month’s end, and you can’t use cash to buy things online. Advertising for credit cards has come a long way too.  You can’t watch an hour of television without seeing a credit card commercial, and your favorite magazines are probably full of offers as well.

How do we choose which cards to apply for?  Catchy advertisements may help, but the primary selling tool in recent years is the assortment of rewards associated with using a particular card.  The big selling point years ago was in trying to qualify for higher and higher spending limits, all the way up to unlimited.  Now it is more about frequent flyer miles, low APR, and our favorite, cash back.

Cash back rewards are our favorite because of the simplicity.  With some cards, like Simply Cash from American Express, there’s no effort at all.  The reward amount is deducted from your next statement.  Other cards offer varying percentages of cash back on either a set slate of categories like airfares or hotel stays, and still others have a program that changes the percentages and the categories each quarter of the year.

Payment of rewards may vary according to threshold amounts and frequency (one cash back card associated with Costco pays off only once per year).  The biggest challenge is to identify which type of cash back rewards you prefer.

Most surveys are ranking the Chase Freedom Visa highly right now, with 5% off on up to $1500 spent with the rotating-categories model, and unlimited 1% cash back on everything else.  With solid initial rewards ($200 cash back after spending $500) and no annual fee, this is a crowd pleaser.

Also consider the Discover card.  This was the card that made cash back rewards popular in the first place, and they still hold a prime place in this industry.  The card is currently offering 5% cash back after you’ve spent $3000 (using a quarterly rotation of categories), plus 1% overall on other purchases, and 5 – 20% discounts when shopping online with preferred retailers.  With the amount of e-commerce that most Americans conduct everyday, this can really add up!

For small business owners, Simply Cash from American Express OPEN is a great card, offering 5% cash back rewards on things you have to buy anyway for your business, like wireless service and office supplies.  They offer 3% cash back on gasoline purchases, and there is no annual fee.  It is hard to find a better card for business use, and it carries the outstanding travel protection features that American Express cards have always been renowned for.  You can also save up to 10% with FedEx and Hertz.  Personal credit card users looking for similar advantages can check out Blue Cash Everyday from American Express, offering cash back on supermarket purchases, department store purchases, gasoline, and more.

Cash back rewards cards are here to stay. Which one will you carry?

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