The Best Cash-Back Credit Card

Update (March 2009): Moved to a one-card option -- the SINGLE best cash back credit card.

Update (September 2007): There may be an even better option -- to use a combination strategy with the Blue Cash card and the Chase Freedom card.

Update (May 2007): I'm revising the last statement in this post, the $330 was nothing. I made almost $500 in 2006 with my card (1.8% overall -- a great return) and I recommend the Blue Cash from American Express card as the best cash-back credit card.

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Kiplinger's held a competition to pick the best cash-back credit card. They started by assuming the following spending patterns:

To determine which cards are most rewarding, Kiplinger's assumed that you spend $35 a week on gas, $100 a week on groceries and $1,000 a month on everything else, including $100 at the drugstore and $100 to watch movies, at home or at the theater.

Here are their results:

• Winner: Chase Rewards Plus Visa (5% rebate on all the basics -- gas, groceries and drugstore items -- plus 1% on other purchases.) Total annual rebate in our scenario: $493.
• Second Place: Citi Dividend Platinum Select. (5% rebate on purchases of gas, groceries and drugstore items, plus 1% on everything else.) Annual rebate cap of $300.
• Third Place: National City Everyday Rewards Elite Visa. (rebates 4% on gas, 3% on movies and video rentals, and 2% for food-related spending at grocery stores and restaurants. Everything else earns a 1% reward -- but only after you spend $10,000. Below that, you earn a measly 0.25%.) In our scenario, you'd pocket $281.

I thought that I was getting a good deal with my American Express Blue card in earning over $330 last year, but it appears that I could have done much better with the Chase card. I spent just about what they spent in their scenario (with the only difference being I don't think we spend $100 a month at a drugstore) yet they made almost $500. I'm going to have to check it out. It could net me a couple hundred more dollars a year!

Comments

[FMF]

Joy --

I got 1.8% on the Amex Blue Cash Card. See the link at the top of this post.

[bill]

After doing some research last year, I, too, settled on the the American Express Blue Cash as my primary card, and I use the Citi Dividend card for all those places that won't take Amex. I wonder if the Fidelity Investment Rewards Visa Signature card or Investments 529 College Rewards card - both of which offer a straight 1.5% - might be a better choice for my Visa/MC backup. Any thoughts on those? Thanks.

[bill]

Oops, I see the 529 card is also an Amex, so that won't work....

[riise]

The Amex blue cash reward is the best so far. It gives you 5% on grocery, gas stations, drug stores, Yet, 1.5% for any other general expenses, such as bills. Moreover, it doesn't have cap unlike the citi dividend.

And i figure out that the Capital One is not as good as their commercial sounds. Since it only gives you 1% on cash reward, so the 25% bonus will be meaningless. A 2% cash reward card will generate more green notes for you. Although most of them do not allow you to accumulate the money on calender year, applying a few more cards will overcome the situation.

[FMF]

Riise --

Check back in a week or so -- I have a faceoff betweent the Amex Blue card and one other card. The results are quite interesting. (Though I can tell you your thoughts are accurate.) :-)

[MAM]

There must be a way to pay tuition with a cc. Don't most cc offer checks? Can't one write a check to the school even if the school doesn't take ccs? If the school is not in the USA, you still write the check in US dollars, correct? Who does the exchange, the cc company or the recipient bank and will they charge a fee?

[Chris]

Well, yes, most credit cards companies offer checks, and there's no reason the school would not accept a check drawn on a credit card if it accepts other checks. It shouldn't really matter to them. The ramifications to the payer, however, are quite different. Typically, such a check would be considered a cash advance, in which case:

1. The cardholder would pay a cash advance fee (often around 3% of the check amount)
2. The cardholder would begin to pay interest on the cash from the time the check clears (as opposed to using the card, where if you pay off the balance when it comes due you pay no interest), and
3. The cardholder would earn no cash-back rewards, as one would by using the card.

The form of payment and the currency in which it can be paid is up to the school. I would imagine that in most cases, payment is expected in the local currency. So, a school in Germany would expect payment in Euros, a school in Australia would expect payment in $AU, etc. In certain areas, for example the Caribbean, it is common to accept the $US at least as readily as local currency for certain transactions. In any event, if an institution accepts payment in a currency other than the local currency, it would then be their responsibility, through their bank, to make the exchange, and absorb all associated fees. One would assume that the institution would build this fee into whatever they quoted as the amount due in $US, but that would be entirely at their discretion.

A transaction using a credit card (as opposed to a credit card check), on the other hand, would typically be presumed to be always in the local currency, thus the cardholder's bank would make the exchange, sometimes charging a fee, or sometimes building their fee into the exchange rate they use to make the conversion.

Chris.

[cash back cards]

Wow great blog, and yeah to the other guys just use a CC check, but becareful using them, remember its credit not your own cash!!!

[Lisa]

Hi all - I've heard you can buy gift cards at the Grocery Store, and get the 5% back on them as well as the rest of your groceries. Does anyone know if this works? If so, you could buy Home Depot or other retail cards & get 5% in these additional categories.

[Chris]

That's actually a great idea, and as far as I know, it will work.

I know when I had the Chase 5% rewards card, I used to go to the "super" stores (Super-WalMart, Super-Target, Super-KMart, etc.) and buy gift cards, earning the 5% cash back, then use those cards at the non-super WalMart, Target, KMart, etc., so I was effectively getting 5% off at those places, versus the 1% I would have been getting otherwise. Even better, Sam's Club accepts the WalMart gift cards as payment, and at the time, the only credit card Sam's accepted was the Discover Card, on which you only ever get a maximum of .25% at a warehouse store. 5% sure beats .25%! 'Course, Chase caught on and stopped considering superstores as grocery stores, and thus I only got 1% at the superstores. Then Sam's started accepting MasterCard, and I could get 1% there directly on my MasterCard, so there was no longer any point to that game.

But AFAIK, you still should get 5% (or if like me you've been unwillingly 'upgraded' to the Chase Freedom card, effectively 3.75%) for buying gift cards at the grocery store. I'll have to try it some month when I'm not running close to my $600 rebate limit.

Chris.

[Ryan Simmen]

I don't see the 2% Bake of America card you're talking about. Maybe it's not available anymore. What is the best "everything else" card available today? Is there really one out there that earns 2% ??

[Chris]

Ryan:

I'm also unable to find a flat out 2% cash card. I also have heard people talking about 2% cards from Bank of America and HSBC, but I can't find them online. Even spoke with a live operator at BoA, who asserted that BoA "has no 2% cash back cards at this time." As near as I can tell, these cards are on an invitation-only basis.

If anyone can provide a link to a 2% on everything card that anyone can apply for, I'd love to see it.

While it might not work for you (you have to be a pet owner), I do have an "everything else" card which gives me 4% on pet-related purchases and 2% on everything else. You can get it without an invitation [edit: at the Bank of America site.]

It's the PetRewards card from Bank of America. The catch is, to get the 2% (or 4%), you need to spend money at the veterinarian, then you send in your receipt and get the total reimbursed. To me (we have five cats), this is as good as cash, because I know I'll go to the vet eventually.

It's hard to tell from the card description, but the way it works is, you get two points for every $1 in pet-related charges, and one point for every other $1 in net charges. Then, once you've paid a vet bill, you download a rebate form and send in the form with your vet receipt, using your points to get a rebate, at the rate of $20 per 1,000 points. So, cash to cash, that works out as 4% back on pet-related purchases and 2% on everything else. There are other redemption options, but they are only one-to-one. The only way to achieve the 2%/4% is with vet rebates. So if you have a pet, it's worthwhile.

Bank of America has like a zillion + 1 different cards. It's likely they have some other special interest card which provides the same type of deal for some other category.

Happy hunting!

Chris.

[Chris]

By the way, if that link doesn't work for you, just go to the BankOfAmerica website, select Credit Cards, select Personal Interests from the dropdown box, hit Go, and PetRewards should be the third or so down.

Chris.

[Elizabeth]

I've got the AmEx Blue already and have spent my $6500. I get 5% of gas/groc/drugstores and 1.5% on everything else. I'm looking for a card to use for charging college tuition since my childrens' school doesn't take AmEx. I used tp use CitiCard when they had 5%, but the $300 max got to be a hassle. After reading your blog, I went to the Chase website and they're offering a $50 sign-up bonus, plus a $50 reward bonus for every $200 in reward. This seems to be a great deal, especially with the 3% on the top 3 categories each month. If I used this for charging other than ggd, do you think that'd be the best way to go? Also, is there a good rebate card for students? Thanks.

[FMF]

Elizabeth --

See this post and let me know if it answers your questions:

http://www.freemoneyfinance.com/2007/09/how-you-can-ear.html

[Chris]

Elizabeth:

Look at the link FMF indicated.

I think you'd be a good candidate for the AmEx Blue Cash / Chase combination. Get the Chase and pick three of the fifteen categories (other than grocery, drug and gas). Use the Chase for the three categories you choose, plus anywhere AmEx is not accepted (like the school). Use the AmEx everywhere else, and you'll be on your way to a nice rebate. And there's no limit on the Chase rebate, so worst case, you're making 1.25% on anything you put on it. The $50 Chase bonus is just icing on the cake.

Chris.

[Elizabeth]

Thanks! I applied for the Chase this morning. Would we do even better if my husband got his own card and he chose 3 different categories than me ... Also, my college kids have the CitiCard with 2%/1% rebate. Is there anything better?

[FMF]

Elizabeth --

There has been some talk that multiple Chase cards could work even better. See the discussion here (in the comments) for details:

http://www.freemoneyfinance.com/2007/09/how-you-can-ear.html

As for your kids, can't they get the Chase card too?

[Chris]

Elizabeth:

Good thinking. I just applied for (and got) a second Chase Freedom card in my wife's name yesterday. Don't know if we'll get the $50 bonus, as my wife is sort of on my Chase Freedom I already had. But it'll be nice to have the additional three categories anyway.

Because my wallet and my wife's wallet are already exploding from the number of cards we already carry, I've decided to dedicate one of the Chase cards to automatic payments - telephone, satellite, tolls. That way, we won't have to carry that one, and can use the other Chase card for categories where we spend on the spot.

Whatever works for you!

Chris.

[Elizabeth]

Chris,
Good for you! I noticed when I was reading your post dated 8/21/07 that you used Chase Visa for grocery/drugstore. Why not use your AmEx for those since they give 5% back on g/g/d? Then use your ChaseVisa for 2 other categories of your choosing. Just a thought...

[Chris]

Elizabeth:

Yeah, you caught me. Much as I tout the benefits of the AmEx Blue Cash card, I don't actually have one! I got on this discussion a couple of months ago, and it was FMF that brought the AmEx Blue Cash to my attention. I already used quite a collection of cards, and knew I was doing pretty well cash-back wise, so I was skeptical at first. But after I ran the numbers, I came to see that the Blue Cash is a pretty good deal. Still, by my calculations, I eek out a slightly higher overall cash back % by using a combination of cards that get 5%, 4%, 3.75% or 2%. The lowest % I get on anything is 2% (except for CostCo and Sam's, where the best I can do is 1%). As I often disclaim, there's no best solution for everyone; everyone's spending situation is unique, and a method that works the best for one person might not be the best for someone else.

I'm still contemplating getting an AmEx Blue once I get done refinancing the house, redoing our HELOC, paying down a few 0% balance transfers, etc. But the problem with throwing the AmEx Blue Cash into my mix is that it'd take so long to get over the $6,500 hump, I'd lose out overall. What I'd be gaining on the AmEx is 1.25% on groceries and drug stores (5% minus 3.75%), plus I'd have a few more categories I could earn 1.75% more on (3.75% minus 2%). But on that first $6,500 on the AmEx, I'd be only earning .5%/1%, and the loss at that low end exceeds the gain at the upper end.

This is due in part to the fact that most of my groceries (and some of our pharmacy) come from Sam's Club and CostCo. Sam's doesn't take AmEx, and CostCo (afaik) does not qualify as a grocery store for the AmEx. So, I'd get less out of the grocery rebate than most people. Plus, the fact that I use so many other cards means it takes a long time to get to the $6,500 tier on the AmEx Blue Cash. The more you divert from the AmEx, the less of a good deal it becomes, until finally it becomes a negative.

So, I can't come up with a scenario where *adding* the AmEx Blue Cash into my mix increases my cash back. I have considered chucking the many-card approach and going simple. I could simply carry three cards: the Chase Freedom for three of the categories and for places that don't take AmEx, the AmEx Blue Cash card for g/g/d and most everywhere else, and a Discover card for the few places that only take Discover (Dollar Tree, Aldi, and Sam's [since I wouldn't be carrying a MasterCard]). I could even keep the second Chase card and use it only for automatic payments, and I wouldn't have to carry that one. This approach would have a few advantages. I'd have fewer credit card bills to pay. I'd stop looking like Mr. Magoo at the checkout stand (I remember him always having a huge fanfold of credit cards). My friends would stop teasing me about my "George Castanza wallet." But could I stand walking away from $156.11 in cash back rebates (that's what I figure as the difference between my current eight-card approach and the simple 3-card carrying approach)? For now, I'm sticking with the complicated approach. But I'll check in again the next time I accidentally leave my wallet sitting on the back bumper of my car and drive away from a gas station, causing my wallet to disgorge its stack of credit cards, littering them along a half-mile stretch of highway, so that I have to scramble through traffic to retrieve every last one of them. Don't laugh, it's happened. Oh, OK, go ahead and laugh. It was pretty dang funny (in hindsight). :)

Chris.

[eliss]

Great recommendations. I used to have the rewards plus card as my daily card. But redeeming those cashback rewards is kind of a pain so I've been looking for ones that automatically credit your statement every month. Instant gratification! Are there any specific credit cards you recommend for making the most money in cashback and also automatically credits your acct?

[Chris]

No personal experience with it, but I'm told the Chase Perfect Card is pretty good:

Earn rebates at any gas station when you use the Chase PerfectCard™ MasterCard®.

* 6% rebates on ALL eligible gas purchases at ANY gas station for the first 90 days
* 3% rebates on ALL eligible gas purchases at ANY gas station after the first 90 days
* 1% rebates on ALL other purchases made anywhere else
* 0% Intro APR for up to 6 months*
* No Annual Fee

Earn rewards wherever the road takes you with the Chase PerfectCard.
Rebates are automatically credited toward future purchases made on your card.

Chris.

[Connie]

I also was searching for a credit card that would give more than 1% cashback on tuition. I do have the Chase Freedom Card which will give effectively 1.25% as noted in several posts above. I recently applied for and was approved for the Chase World Wildlife Fund Platinum Visa. The description of this card says: “With the WWF Platinum Visa® card you can enjoy great financial benefits while helping to save endangered species and protect endangered habitats. Every time you use your WWF card to make a purchase, WWF receives 1 percent of the sale. Chase will also contribute $50 for each new WWF account opened online. Since 1995, WWF has received more than $10 million from this program.” In addition the cardholder gets 1 point per dollar spent, and the points can be redeemed through the Chase Flexible Rewards program. I don’t have the card yet, so I don’t know whether the Flexible Rewards program will actually net me 1% of my purchases. If it does, then this card will effectively be earning 2%, half for me and half for wildlife. Chase has another card, the Audubon Nature Institute Platinum Visa, that pledges to pay 1.1% of the cardholder’s spending to the Audubon Nature Institute. This card also offers the Flexible Rewards program to the cardholder. If the Flexible Rewards program approximates 1%, then this would be another card that effectively earns 2%, half for the cardholder and half for Audubon. I should be receiving the card in about a week, so then I will be able to report back about how good the Flexible Rewards program is. I see an advantage to having a specific credit card dedicated to my son’s educational expenses. This is the advantage of having all of his expenses that may be qualified expenses for the Lifetime Learning Credit (a federal income tax credit, see IRS Publication 970) all on one specific credit card. This simplifies the recordkeeping chore. Every year at tax time all of the information will be summarized on one credit card that contains that information and only that information. We won’t overlook any qualified expenses for the tax credit. The tax credit can be worth 20% or 30% or more depending upon one’s income bracket. Being sure not to overlook any expense that qualifies for the credit can be valuable. In addition to tuition, certain college fees also qualify for the credit. Textbooks that must be purchased from the University Bookstore (and cannot be purchased anywhere else) will also qualify for the credit, as will any course related equipment that must be purchased from the University. If you are paying an accountant to do your taxes, you might save some on the fee for his time.

[sam]

Interesting info

For most of the college students, getting a credit card is a necessity rather than a luxury. There are many things which a college student will need to buy for educational purposes.A credit card is much like a weapon in responsible hands it can be useful, but in the wrong hands it can be misused. Compared to regular credit cards, a student credit card is issued to students that usually have no previous credit history.
Student credit cards have low credit limits because they are designed for expenses like books, stationery and other expenses a student is expected to encounter on a daily basis. Student credit cards offer ready cash, discounts and specialized reward point programs that are beneficial to students.

[Jack]

I've read all above posts and saw no comments about the Sams Club Discover Card, issued by GE Money Bank for SC. You pay an extra fee, about 50.00 as I recall, for the card. It has tiered levels for cash back but when you get to 5,000 (I think), you get 2% on everything (except other warehouse club, etc purchases) for the rest of the account year (to Feb 1 I think).

2% is great but GE Money Bank is about the worst outfit to do busines with I've run across in a long time. They don't seem to want to help customers, just quote their policies. For example, I've paid 3,000 and 6,000 in one month by Electronic Funds Transfer from Fidelity Investments' Bill Pay account, and GEMB won't give me credit for 21 days after receipt. Have to wait to be sure the payment is good!

Another hassle is they twice declined the card, both time for questionable reasons. And yesterday I couldn't access my online account. The phone rep said because I'd tried to access it that day 3 times, when I had only once.

And they only gave me 7500 credit limit (increased to 8500!) which has created problems several times when we want to charge larger amounts (they did give my wife 12,500 but we cancelled that account so we wouldn't have to charge up past the lower level rebate tiers).

Has anyone else had poor experiences with GEMB, or am I being too demanding?

In regard to some of the prior comments, I use the Costco AX for 5% gas (except other warehouses and grocery store gas pumps), 3% meals except the short term old Discover Card current 5% program, and 1% all else where a merchant doesn't take Discover (Sams 2%).

Just our (Florida) homeowners ins and auto ins is about 4-5,000 a year and Hartford takes Discover.

If any readers are over 50, through AARP, Hartford Ins offers a non-cancellable HO policy, which is of great value in Fla. I don't think they're taking new business now but eventually will, and surely are in other states. Keep in mind if u live in Fla - try to avoid Citizens Ins!

I enjoyed all the posts. It's a tricky business!

[Paul]

This is MY idea of CASH BACK!!!
I did a credit card transfer on an American Express credit card which has zero percent for a year and no transfer fees for $30,000 to second credit card (Discover Card(s)) that don't have a balances. I've noticed that when you do a balance transfer that the source bank(American Express) doesn't check the destination bank(Discover Card) to see if there is actually a negative balance. I then called Discover Card and had them transfer the money to my checking account once it cleared their system. I did it in multiple transfers on multiple cards (not the whole $30K to to one card at once) Next I transferred it into my my Etrade Complete savings account to collect 4.7% interest on it. I also got another $6500 from a CitiCard. I just pay the minimum payment until it comes due (or get 6-9 month CD's). I should make roughly $1700 in free interest for few minutes work per month to make the payment. I use mint.com to monitor all my credit cards (in addition to setting up email alerts on the cards I owe on) and they'll send me emails if I forget to pay any card. This is my second year of doing this.... Free money as long as you don't miss a payment(AND DON'T MISS ONE!!!!!). IF YOU'VE EVER MISSED A PAYMENT OR HAVE BAD CREDIT DON'T DO THIS. Then I cancel the cards, wait a month and start it again. It hasn't appeared to have impacted my credit score negatively since it just jumped from 759 to 806 ( free daily up to date credit score is shown on the online account of Washington Mutual credit cards). My goal is to borrow 100K to get 4-5K in free interest per year while the 0% credit cards still exist. The reason you have to do a balance transfer with American Express is that they won't send you the money for deposit into a bank account unless it's a cash advance and that's NOT something you'd want to do with all the fees involved in addition to they don't give you the promotional 0% rate. Citibank will send you the money directly in a check that isn't considered a cash advance so you don't have to do the balance transfer nonsense. After a couple months my credit scored dropped back to 786 because of the new higher debt ratio but I don't care because it will go backup when I'm done with THEIR money.
The top few on this list have 0% and NO transfer fees.

[ram sham]

Hi,

Is there some card which gives cashback on college fees?

thx.

[FMF]

Ram --

Your best bet is to ask your college what cards they accept. From there, you can pick the best card from that provider (Amex, Visa, MC)

[Felix]

do you know of any card that includes online marketing in any of their categories for cash back? like google adwords

[FMF]

Felix --

The Amex Blue card gives you 1.5% back on everything once you get to its second tier.

[arunas]

I was doing research for a while on cash back credit cards, looking to get an extra card, because I work abroad a lot and many times my current card is being blocked by dumb Visa security system just for purchasing gas abroad - go figure.

I now have Chase BP VISA, and I could not find anything better than this gem. I get 5% for gas, 2% for travel and dining (most my purchases fall there), 1% on rest.

Chase Freedom sounded good, but once I checked 15 categories, I saw that those are basicaly a scam, since I would not typicaly spend money in any of those categories:

grocery stores (that are not affiliated with or departments of superstores, warehouse clubs or discount stores)
gas & convenience stores
quick service payment/fast food restaurants
telecommunications
cable/satellite TV/Internet Service Providers
video rentals
department stores
dry cleaners
drugstores
movie theatres
local and suburban commuter passenger transportation (including ferries, bridges, tolls, parking garages, taxis/limos)
pet supply stores and veterinary services
utilities
beauty shops (salons and spas)
gym/recreation memberships.

Does anybodey here knows something better than BP VISA?

[jewelrycharity]

Credit card that gives you 2% cashback on everything for 1 year. So I would say get this and when done in a year then go with the Amex Blue.

[Amy]

The problem with rewards cards (gas or department store card) is that to actually beneifit from the reward you need to carry no balance, the higher interest rates often do more then just negate the percieved reward.

[FMF]

Amy --

You shouldn't be carrying a balance on a credit card at all -- even if you don't get rewards or cash back.

[Tom]

I agree, regardless of your credit card, you shouldn't hold a balance at all espeically with a reward card. Don't people realize that if you're not paying off the bill in time, you're not getting the full reward?

[Wen]

Hi all, is the Amex Blue card better than Amex Costco rebate card? Thanks! :)

[FMF]

Wen --

It depends how much you spend and in what categories, but generally the Blue card is better for most users.

[Robert]

Best combo I have so far...
BP gas card for fuel and road purchases. Unlimited earnings and a 5% cash back on all fuel and BP store purchases. $110 in the last 12 months...
Chase Freedom Card x2. One for myself and one for the wife.
We use her Chase Freedom card for the Cell phone bill, utilities, gym membership and some others. Mostly the bills that we consider utilities that we have set on auto-pay. Around $120 annual but we haven't cashed it in yet (see later).
We use my Chase Freedom card for EVERYTHING else. So far this year...$478 earned BUT you have the option of waiting to cash in and when you earn $200 you can get a check for $250. So actually that $478 is $578. Awesome difference.
TOTALS = 110 Bp + 120 Freedom + $578 Freedom = $708 in a year.
YAAAAY CHASE!
I'll be back in another 9 months to give you the two year averages.

[dave]

Any anyone ever tried to build a house with a credit card (AMEX Blue)? Using a construction loan and really high line of credit are there any catches?

[dave]

Any anyone ever tried to build a house with a credit card (AMEX Blue)? Using a construction loan and really high line of credit are there any catches?

[Nick]

Question about the Blue Cash Amex card

Do you get 1.5% (everyday purchase) and .5%(everything) back for the first $6,500, then once you get over $6,500.01 minimum you get the 5%(everyday) and 1.5%(everything), or is it once you hit the 6,500.01 mark you get 5% and 1.5% on all total purchases?

For example I spend $10,000 over the year I either get:
.5% and 1.5% on the first $6,500 and then 1.5% and 5% on $3,500
OR
5% and 1.5% on all 10,000

[FMF]

Nick --

You just get the higher amounts on the amount over $6,500 charged. That's why for lower levels of charging, the Chase Freedom card is better. See my analysis here:

http://www.freemoneyfinance.com/2007/09/how-you-can-ear.html

[FMF]

Dave --

Creative idea, but I havn't tried it.

[Joy]

Chase = Poor customer service (including supervisors/managers) = charging you late fees although you are paying on time and in full = missing points/ you have to be houdini to cash your rewards = tricky way to do business = cheating! After almost 2 years of using chase for purchasing everything everday, I am fed up. Good bye Chase!! I will let all my colleague, family, and friends know about the real truth of having a Chase reward card!! I shall go get my self a CITI/HSBC/or BAnk of America reward credit cards!

[Chris Paynter]

Joy:

Well, I guess everyone's mileage may vary.

I've been a Chase cardholder for over three years and have never been charged a late fee. Did get one overlimit fee, legitimately, as I was over limit, and spoke to a cheerful and competent customer service rep who reversed the overlimit fee and assured me that my 0% interest rate would not be affected (which it wasn't). Beyond that, I've not had to deal with customer service much.

I calculate my points every month, and they come out to the penny; only times I've "lost" points is when I've reached a monthly (formerly annual) reward limit, or when a vendor whom I expected to be coded one way to get the 3% was not and I only got 1%. No biggie, and not Chase's problem.

Have to be a Houdini to cash rewards? No. At most, I'd say it requires better than a two-digit IQ to redeem rewards. You log on to the website, click the button that says you want to redeem rewards, check the box for the reward you want, click a couple more buttons to check out, and wait 3-4 days for the check to arrive in the mail. It only seems like magic, but it's much easier.

Citi, HSBC and BoA all have good rewards cards, and I use my Citi and BoA rewards cards for certain purchases. But 3% on phone bills, satellite, commuting expenses (parking, train, etc.), movies, and dry cleaning (to name a few) is something that no other card in my stable can offer. So I'll continue to use my Chase Freedom for those categories.

Chris.

P.S. Those with Chase Freedom cards can participate in an extra promotion right now: make three Blink transactions before June 30 and get an extra $10 in rewards.

[John Dowling]

Mine is simple. AMEX BLUE for 5% gas/food, 1.5% on EVERYTHING else. Then hybrid it with HSBC Weekend card for 2% on EVERYTHING purchased during the weekend. On top of this, stay aware of specials like the CITI-CASH REWARD special which gave me 5% on ALL PURCHASES for the first 3 months (NO LIMITS). I am doing an addition to the house and purchased everything I could on the CITI-CASH reward and simply paid it off daily. I got 5% on everything and got over $600 in rebate checks. I still want to find something that pays over my AMEX BLUE 1.5% on ANY purchase (not gas/food). Any ideas?

[Chris Paynter]

John:

Yeah, that's a bit of a tough nut to crack. I don't know of many cards which give more than 1.5% true cash back. One is the HSBC weekend card you've got. There's also another HSBC card, issued through HSBC's Orchard Bank division, which gives 2% cash back, though I understand they issue pretty low limits. If I can find the link, I'll pass it along.

I do have a card which works for me as a 2% card. It's the BankOfAmerica PetRewards card. It gives 2% on pet-related purchases and 1% on everything else, BUT if you redeem your cashback as rebates on veterinary services (incurred at any vet), you can get 2-for-1 cashback, essentially giving you 4% off pet-related stuff and 2% off everything else. I've been using this card for a little over a year now, and have redeemed about $200 in cash back. I use this as my card for pet-related purchases, and everything else that I don't get at least 2% cash back on otherwise. We have six cats, so there always seem to be vet bills to use for rebates. YMMV.

Chris.

[Christi]

Now Chase has dropped their 5% cashback to 3% cashback on gas, groceries & drugstores. Is there any card out there that still gives 5% cashback, without having to "step up" gradually like Discover?

[Ian]

So I'm looking for a new credit card...any recent analysis on what the best one currently out is? I don't hold a balance, so just looking for rewards. Right now I have an Alaska Airlines card with BofA and just hit 40k miles. I plan to use the miles and then switch to another card that has better rewards.