Americans love their credit cards. This phenomenon has created a highly competitive industry of banks, service providers and merchants that are issuing credit cards in record numbers.
Due to the competitive nature of the industry, card issuers are forced to include value added incentives in order to attract customers.
As time goes by, credit card issuers are getting more creative with the offers. Customers can get frequent flier miles, discounts on concert tickets, free card memberships and free merchandise.
The most popular incentive in the marketplace today is the cash back incentive. People are always on the prowl for the best cashback credit card.
How Do Cash Back Cards Work?
Credit card companies issue a card that provides one of two types of cash back incentives. The first type comes in the form of a small percentage rebate on specified purchases, usually with restrictions. The second type is a cash bonus for a certain level of usage. Credit card issuers can afford to do this because they charge merchants processing fees for credit card charges.
What Are Some of the Best Cash Back Credit Cards?
There are literally thousands of credit cards that offer cash back incentives.
The best cash back credit card is the one that offers the highest rebate percentage, the largest cash bonus on the lowest usage levels, or the one that offers the widest range of categories that are eligible for the incentive.
Based on this criteria plus other factors such as APR and other benefits, here are some of the best cash back credit cards available today.
- Chase Freedom® – This card starts with a 5% cash back rebate on all relevant purchase categories. However, the categories are divided into calendar quarters. The rebates are only applicable for charges made within the designated quarter for each category with a spending cap of $1,500 per quarter. The second cash back incentive is a cash bonus of $100 if $500 of charges are made within the first three months of the card’s validity.
- Discover It® – With this card, the customer will earn a 5% cash back rebate using the same methodology as The Chase Freedom. The card also gives an unlimited 1% cash back rebate on all charges not covered within the quarterly categories.
- Citi® Dividend Platinum Select® Visa® Card – This card offers the same cash back rebate program as the Discover It with one caveat. Instead of instituting a $1,500 spending cap per quarter, Citibank has chosen to cap the customer’s total earnings per calendar year at $300.
- Capital One® Quicksilver® Cash Rewards Credit Card – With this card, a $100 cash bonus is available for $500 spent during the card’s first quarter. The base cash back rebate amount is 1.5% on all purchases with no caps or restrictions.
- PenFed Platinum Cash Rewards Visa® Card – PenFed is offering an unlimited 5% cash back rebate on all gas charges made at the pump. A very low APR helps make this card highly competitive.
- Blue Cash Preferred® Card from American Express – This card also gives a $100 cash bonus, but it requires $1,000 of charges in the first quarter. The applicable rebate rates for each quarter are 6% for grocery stores and supermarkets, 3% for gas and selected department stores, and 1% for everything else. The $1,500 expenditure limit is in force with this card.
