Top Three Cash Rebate Cards

In the February issue of Kiplinger's Personal Finance magazine, they list their selection for the top three cash rebate cards as follows:

• Blue Cash from American Express

• National City Everyday Rewards Visa

• Chase Freedom Cash Visa Card

I'm familiar with #1 and #3 as I have them both. The Amex card helped me earn almost $500 in cash back last year and the Chase Freedom card is part of my new plan to maximize my cash back rewards. But I hadn't heard of the Everyday Rewards Visa.

As a justification for its rankings, Kiplinger's lists that Amex rebates "up to 5%", Everyday Rewards rebates "up to 4%", and Chase Freedom rebates "up to 3%." While these facts are true, there are a TON of details that may make any of these cards a good or bad deal for you. It depends on how much you charge and on what categories.

For your reference, here are the details behind each card:

• For details on Blue Cash from American Express, see Free Money from American Express.

• For details on the National City Everyday Rewards Visa, see their Q&A page.

• For details on the Chase Freedom Cash Visa Card, see Actions to Take If You Get a Chase Freedom Card.

It seems that the one card that appears in every list of "best" cash back credit cards is Blue Cash from American Express (for reference, see American Express Blue Cash Card Named Among Top Cards by Money Magazine). I have used the card for several years now and can vouch for it 100% -- especially if you have a good amount of charges each year. Once you get past the initial $6,500 level, you start to earn some really good rebates.

Comments

[Susan]

The best card I have is the Chase Cash Rewards card that pays 5% back on gas, groceries, and drugstores, but it is closed to new applicants, and for some cardholders, they converted it to the Freedom card. But mine still works with the 5% rewards. The second best card I have is the my Citi Professional Card which pays 3% on all restaurants, office supply stores, and auto rentals (also 3% on gas, but I use the above card for that since it is 5%). For everything else, I use my Chase Freedom Card. The result is that I very rarely get rewards less than 3%.

[MelMoitzen]

Not sure what the Kiplingers were smoking when they came up with the list, but the National City card doesn't seem all that great if you want to use a one-card strategy (clearly we've demonstrated over and over again in these posts how you can milk a lot more out of rebate programs using a multi-card hybrid strategy).

If I were to pick a random stranger off the street without knowing his/her specific spending habits, I suspect 99.99% of them would do a lot better with either the Costco Business American Express (CBA) or the Chase Professional MasterCard (CPM) as their one and only card, both with an unlimited 1% base rebate and bonus categories. Or even the 2% Orchard Bank MasterCard limited to $20K in annual charges.

Let's look at the National City Visa (NCV) card line-by-line:

NCV: 4% on gasoline at the pump (Up to $250 in eligible monthly net purchases).
CBA is offering 5% on gas.
CPM is offering 3%. Sure, 3% isn't 4%, but in conjunction with the advantages on the other categories on which CPM offers bonus rebates, on the whole you'll probably wind up much, much better off. And (given the $250 monthly maximum), NCV might earn you just $2.50 more a month in this one category over CPM.

NCV: 3% on cinema and movie rentals (Up to $150 in eligible monthly net purchases). Isn't this category a little far-fetched for the typical consumer who might go out to the movies once a month and possibly rent two or three (getting the rest from cable or satellite)? This is the ONLY category in NCV's 3% rebate tier. And if you happen to be a movie addict who can rack up $150 in charges a month, the extra 2% (over the industry-standard 1%) you're earning here will add up to $3/month, not enough for a small popcorn in most places.

NCV: 2% on groceries, restaurants and fast food (Up to $750 in eligible monthly net purchases.)
Both CBA and CPM offer 3% on all types of restaurants (including fast food). True, you'll take a 1% hit on groceries, but for many of us who go out for dinner once a week and buy our lunch 2-3x a week at work, you probably won't notice much difference in the overall "food" category by passing on the NCV card.

Now, here's the major dealbreaker with NCV: "Up to 1% on almost everything else," then the fine print: "1/4% on first $10,000 in eligible net purchases each year; 1% thereafter with no limits." If you thought climbing up through the $6,500 tier at 1/2% with Amex Blue would be tough, then this is the Mt. Everest of credit cards tiers. And then to get only 1% back after reaching the summit of Everest? This is costing you $75 (3/4% of $10,000) in lost rebate versus earning the industry standard of 1% on this entire tier.

Other bonus categories that NCV isn't matching: 2% on travel (hotels, airfare, cruises, rail, bus, rental car, travel agencies) with CBA. 3% at office supply, hardware, home improvement stores with CPM.

CBA offers unlimited rebates; CPM offers unlimited 1% rebates and will allow you to earn bonus rebates on up to $2,000 of purchases/month in their 3% categories.

[Amanda @ Me vs Debt]

I have two of the top three: Chase Freedom and NC Rewards.

NC rewards is great for Gas and Dining Out but NOT regular purchases. You are only earning 0.25% for your first $10k in purchases, then it is tiered up to 1%.

Chase is great because its flexible - I utilize the Groceries, Utilities, and the other top spending category might vart.

The under-rated card of the year is Discover. You can easily switch back and forth between the Get More Card and the Open Road Card. I recently switched to the Gas Card because I wasn't interested in the quarterly savings category for Get More: Travel. No problem - switch to 5% back on auto expenses (only up to $100 per month unfortunately) with the Open Road card. You automatically earn 5% for eligible purchases and can save 5-20% on online purchases. Similar to the NC Rewards card it sucks for regular purchases -- only earning 0.25% for your first $1500, tiered up to 1%.

[Tim]

I dislike the tiered rewards system, because it motivates you to charge more than you would normally just to get to the next tier.

i prefer the citi dividend platinum select that gives 1% plus a variable amount at citi dividend merchants and 2% at supermarkets, drugstores, gas stations, convenience stores and utilities including cable. since there are many cards out there that give 5% on drug store, gas, and grocery items without a tier based system, i think amex isn't as good.

[FS]

I'd second the nomination for AmEx Blue Cash. I need a good alternative for vendors that don't accept American Express, so I'll probably sign up for a Chase Freedom soon. It seems to get favorable nods on the web.

[LC]

I already had a Chase Mastercard so I called about switching it to a Chase Freedom Visa to get the rewards. I got to keep the same card number, the same interest rate (5.99%). But they also said it would stay a Mastercard but still get the rewards. Just for those of you who prefer Mastercard for whatever reason.

[Harv]

Want to thank you for all your great ideas I read this site almost every day and it helps me revise my rewards plans from time to time. Will now be looking to get one of my Chase cards converted to Chase Freedom to pick up 3% on a few more categories
I have played the rewards game for at least 7 years and have gotten better each year. Last year I got a little over $800 mostly in cash back rewards. But for me with only about $1000 a month going on credit cards the Am Ex Blue Cash is not for me. I know it is a lot of work but I try to use certain cards for certain rewards. It got so bad that I had to make a cheat sheet for my wife to make sure she uses the correct card.
The best card I have is the Chase Cash Rewards card that pays 5% back on gas, groceries, and drugstores, ($300 rewards per year) but it is closed to new applicants.
The Citi cash return card (5% on EVERYTHING for 3 months) is a great card if you are planning any big purchases I had a few big things to get and have gotten a little over $300 in rebate checks in the 3 month promo period.
FYI : Citi cash return does not show the promo rebates they only show the normal 1% on your online statements but if your rebates add up to $50 in a statement cycle they send a check to you I have gotten all my checks before the due date on each statement.
Citi Drivers Edge which gives 3 points per dollar on gas, grocery & drugstores. (Points are not as good as cash but better than nothing.)
If you have a Citi Drivers Edge they send a promo postcard out from time to time.
I just got one back in October and they offered 5% cash back on gas, groceries, and drugstores reflected on your statement at end of monthly cycle. And I found out they also give the 3 points per dollar real nice deal.
FNBO Direct also offers 2% on all purchases for the first 12 statements (must be FNBO Direct customer)