It’s time to cover cash back credit cards. There are many great cash back credit cards available, with repeatable earning rates up to 2.6% everywhere. But it gets better if you’re willing to carry a few cash back cards. In that case, you should find one great “everywhere” card, but also add a few cards with up to 5% cash back within your common categories of spend (grocery, gas, restaurants, etc.). Below you’ll find what I think are the best cash back cards that are widely available.
In previous posts, I covered options to earn oodles (yes, oodles) of transferable points by holding combinations of credit cards:
- Super credit card combos: This post covered several great combinations of cards to use when you want to earn points that can be redeemed for outsized travel value by paying for travel or by transferring points to airline or hotel programs to book high value awards.
- Super mixed credit card combo: This post discussed the ideal combination of cards to keep in your wallet if your goal is to earn transferable points, but you’re OK with earning points in multiple programs.
Personally I tend to prefer earning transferable points instead of cash back. Transferable points give you the opportunity to get far outsized value if you manage to snag just the right awards. That said, my current transferable points balances currently count in the millions so cash back is looking pretty good until I manage to spend down my point fortune…
The best “everywhere” cash back credit cards
Everyone should have a great “everywhere” card. Regardless of whether you want just one card for all spend or a George Costanza wallet full of cards so that you can pick just the right card for each situation, it’s great to have a card that earns great rewards everywhere. What follows are my picks for the best “everywhere” cash back cards. You should choose the one that works best for you.
Bank of America Premium Rewards with Platinum Honors Preferred Rewards
2.6% everywhere. $95 annual fee. $100 annual airline incidentals fee reimbursement.
On its own, this card isn’t much use. It only earns 2% back for travel & dining and 1.5% back everywhere else. That said, Bank of America offers their banking customers additional rewards through their Preferred Rewards program. With this program, the more you have invested with Bank of America banking and/or Merrill Edge and Merrill Lynch investment accounts, the more rewards you get. With $100K invested, you get top tier perks as a Platinum Honors Preferred Rewards member. It’s like having elite status with the bank. Note that retirement accounts do count towards this total, so the $100K threshold is not as far of a reach as it may otherwise sound. It’s often possible to move your investment holdings to Merrill Edge without having to sell any shares.
Once you have Platinum Honors status, you get a 75% rewards bonus on certain Bank of America cards. You also get free stock and ETF trades, free out of network ATM transactions, waived fees on a number of banking services, etc.
With your 75% rewards bonus, the earnings on this card become significant:
- 3.5% back for travel & dining
- 2.62% back everywhere else
2.5% everywhere. 3% cash back first year. No Annual Fee First Year, Then $59.
Earn 3% cash back first year, then 2.5% cash back everywhere in ongoing years. No foreign transaction fees. $25 minimum redemption. Note that after the first year, you’ll have to spend approximately $12,000 per year to do better with this card than with a no-fee 2% cash back card.
2% everywhere. No minimum redemption.
There are other good 2% cash back cards (such as the Citi Double Cash), but this is the only one I can think of that’s available nationwide and has no foreign transaction fees.
The Cash Back Credit Cards by Spend Category
Once you have a great “everywhere” card, you may be interested in adding in one or more cards to get even more rewards for the type of spend you do the most. Below are my picks (hyperlinks will take you to more information about each card)…
- Grocery 4.4%: Amex Blue Cash Preferred: 6% cash back at US grocery stores, up to $6K per year, then 1%. After the $95 annual fee, you can net 4.4% back on $6K of grocery spend. Alternatively, a few credit unions offer 3% cash back with no annual fee (details here).
- Dining 4%: Uber Visa Card: 4% cash back for dining, 3% for travel. No annual fee. No foreign transaction fees. Alternatively, the Capital One Savor card also offers 4% cash back for dining, but its $95 annual fee (after the first year), makes this card less valuable than the Uber card.
- Gas 5%: Ducks Unlimited: 5% cash back at gas stations & sporting good stores. No annual fee. There are a number of cards that offer 5% cash back when you pay at the pump (details here), but this one offers 5% at gas stations in general.
- Travel 3.5%: Bank of America Premium Rewards with Platinum Honors Preferred Rewards. $95 annual fee. $100 annual airline incidentals fee reimbursement. A good alternative is the no annual fee Uber Visa Card which offers 4% cash back for dining, and 3% for travel.
- Phone/Internet/Cable 5%: Chase Ink Business Cash: 5% back for phone, internet, cable, and office supply store purchases, up to $25K per year. No annual fee.
- Rotating categories 5%: Both the no annual fee Chase Freedom card and the no annual fee Discover It Card (or Discover It Student Card) offer different 5% cash back categories every quarter on up to $1,500 spend.
Putting it all together
The best combination for you depends upon how many cards you’re willing to carry, where you tend to spend the most money, and whether or not you can conveniently park $100K with Bank of America / Merrill Edge / Merrill Lynch. Here are some example combos that I think make sense:
- One great card: Bank of America Premium Rewards with Platinum Honors Preferred Rewards. 3.5% back for travel & dining; 2.62% back everywhere else.
- Two great cards: Bank of America Premium Rewards with Platinum Honors Preferred Rewards + Uber Visa. 4% cash back for dining, 3.5% for travel, 2.62% everywhere else.
- The two card no-fee combo: Uber Visa + Paypal Mastercard. No annual fees. 4% cash back for dining, 3% for travel, 2% everywhere else.
- The Costanza: Bank of America Premium Rewards with Platinum Honors; Uber Visa; Ducks Unlimited; Blue Cash Preferred; Ink Business Cash; Chase Freedom; Discover It. Altogether you would get 4.4% grocery (on first $6K US spend per year and after accounting for annual fee); 4% dining; 5% gas; 5% phone, internet, and cable; 5% office supply stores; 5% rotating categories; 3.5% travel; and 2.6% everywhere else.
Personally, I’m ready to move to the Bank of America Premium Rewards card as my “everywhere else” card. It’s really hard to beat 2.6% cash back everywhere (unless the Zerocard ever really appears).
If I visited gas stations a lot more than I do today I’d consider getting the Ducks Unlimited card too. Elsewhere, though, I can do just as well or better with transferable points:
- Grocery: I prefer 4X Membership Rewards on up to $25K per year (then 1X) with the Amex Gold Card.
- Dining: Soon we’ll be earning 5X with the Citi Prestige card. Until then, 4X with the Amex Gold Card or 3X with a Sapphire Reserve is excellent too.
- Gas: I’m happy with earning 3X with my Citi Premier card (or 3X with my Altitude Reserve when the gas station takes mobile wallet payments)
- Travel: I’m earning 3X with my Sapphire Reserve and will soon earn 5X on airfare with the Citi Prestige
- Phone/Internet/Cable/Office Supply: The Chase Ink Business Cash card acts both as a cash back card and as a transferable points card when it is paired with a premium Ultimate Rewards card (such as the Sapphire Reserve).
- Rotating categories 5%: The Chase Freedom card acts both as a cash back card and as a transferable points card when it is paired with a premium Ultimate Rewards card (such as the Sapphire Reserve).