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  • Comparison of Cashback Credit Cards

    Posted by Frugal on May 8th, 2006

    The credit card issuers got more competitive again since the last time I shopped around. Because the average cost for Visa/Mastercard transactions is about 1.7%, and can be almost 3% for small merchants, I always thought that getting mostly 1% cashback out of 1.7% total on my Citi Dividend Platinum Select Card is pretty good already. I just found out an even better cashback credit card offered by Emigrant Direct. Here is the summary of some credit cards (all zero annual fee) that I think are worthwhile mentioning:

    1. Citi Dividend Platinum Select Card: 5% cashback on gas/drug/grocery, and 1% on everything else. $300 max rebate per year. Cash rebate can be paid out once it’s more than $25. I currently have two cards because I usually run out of the $300 yearly limit. At 5%, you only need to have $6000 of gas/grocery bill to reach $300. (The term of this card has been changed, and I have replaced this card by two other cards in another post.)
    2. TrueEarnings Card from Costco and American Express (AMEX): 3% for restaurants, 2% for traveling, and 1% on everything else. Annual fee waived with Costco renewal. Since Costco does not accept Visa/Mastercard, I also have this card. Two other American Express (AMEX) credit cards, AMEX Costco Cash Rebate and Blue Cash have tiered structure, and you will need to spend $11000 and $13000 a year separately to beat a flat 1% cash rebate card. Above those spending levels, you get only 0.5% extra back.
    3. EmigrantDirect Platinum MasterCard (issued by Juniper Bank): this is my new find. It will pay a flat 1.40% cashback if your average daily balance of your EmigrantDirect Savings Account is at least $10000. Otherwise, it’s 0.50% cashback. It pays every six month, and goes into your saving account directly. I called EmigrantDirect, and have confirmed that the cashback will not be lumped in as part of the bank interest money on which you will need to pay tax. Since EmigrantDirect Savings Account earns 4.65% APY, this is really a no brainer deal.

    Why is that I’m only interested in cashback credit cards? Other credit cards such as airline credit cards may end up giving you a slightly better value. However, accumulating airline miles or reward points is simply not straightforward enough. The credit card company can always change the reward schedule of airline or redemption point to their benefit. I prefer a simple straight deal of simply getting cashback.

    P.S. I got most of my pointers from www.creditcards.com. It’s a pretty easy website to navigate, if you are interested in any other kinds of credit cards.


    More related posts:
  • Over $200 cashback on my credit card
  • HSBC cutting my credit line to $3000

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    38 Responses to “Comparison of Cashback Credit Cards”

    1. ccwatcher Says:

      You might also consider the following cards:

      Pentagon Federal Visa Platinum Cash Rewards – A flat 1.25% cash back card
      Fidelity Investment Rewards Card – 1.5% on all purchases, credited to your Fidelity account once you accumulate $50
      Fidelity Investments 529 College Rewards Card – 2% on all purchases
      Bank of America Power Rewards – It’s a points based system, but if you spend a lot (redeem 50,000 points at $1 spent/1 point), you can get up to 2% cash back (not publicized on the site)

      I probably will be doing a write-up at some point on these options. Considering that Emigrant pays 4.5% and requires a $10,000 balance, you’re also sacrificing some return there since GMAC bank is currently at 4.75%.

    2. frugal Says:

      Boy, Ccwatcher,
      I have to give credits to your findings. I look forward to your write-up. Isn’t there some inconvenience associated with Fidelity credit cards? I always knew about that 2% reward card from Fidelity, but I can’t remember what inconvenience that caused me not to apply for it. Oh, I think it was because the money can only go towards the 529 plan, and you cannot take it out. I don’t really trust 529 plan which you don’t have much controls, since my investment is far from the standard stock market investments.
      Please do trackback to this article when you have your write-up ready. If my readers don’t find it useful, at least I think I will find your article useful.
      Thanks for all the pointers.
      frugal

    3. jackrterrier Says:

      Hey, I signed up for the Emigrant Direct account yesterday. I was looking through some of the Finance Blog links you have posted on your website. I want to sign up for a couple of these cards (and cancel a couple that I don’t use) – it’s now Aug 1st, are there any new, better deals out there? I charge a lot, pay my balance off every month (sometimes I send in 3 payments in a single month). Don’t do much travel at all, care more about getting cash or ‘points’ (I guess these can be converted to cash, or gift cards, or can be used in some way in lieu of cash)?

      Currently checking out credit cards- if someone has done their own independant research and has found a great deal, and is willing to share that info, I’m all ears. thanks!

    4. frugal Says:

      Jackrterrier,
      The above three cards are the best that I can find, and I haven’t heard anything better. I will use the 5% citi card on gas/grocery/drug, and then 3% AMEX card on restaurants/Costco, and then 1.4% EmigrantDirect card on everything else. That way, you can essentially extract all possible cashbacks.

    5. Daniel Says:

      For anyone who can claim “student” status, the Citi MTVu card is great.

      It uses “thankyou points,” which cash out to gift cards (including Amazon.com) at 100/$1 once you reach the 5000 point, $50 level.

      1% cashback on all purchases. 5% back on restaurants, bookstores (including amazon.com), “entertainment” (movies, CDs, etc). Also 25 points for paying bills on time, up to 2000 points for good grades.

      Additionally, check out http://www.cardoffers.com for cash bonuses for applying for new cards.

    6. frugal Says:

      I think there is a 2% cashback credit card that credits your IRA account for Fidelity account holders(?). I’m not sure about the details. There are many PF bloggers that have mentioned this credit card. One could search through pfblogs.org for it, or maybe Google search.

      However, call me cynical, I only like the ones that can give me cash back upfront and right away. That’s why I’ve only included the above 3 cards.

    7. Tom Says:

      For restaurants, I use the Citi Professional Cash card: 3% back cash paid the same way the Dividend card pays out.

    8. Joel Says:

      The recent changes to the cash back rewards of the Citi Dividend MasterCard prompted me to do some personal analysis to find the best mix of cash back cards for my spending patterns.

      That personal analysis inspired me to build a general-purpose tool to help anyone determine the single best card or mix of N cards that will maximize their cash back rewards. You just plug in how much you spend each month (broken out by categories for best results) and you’re presented with a list of recommended cards sorted from best to worst by your expected annual reward. If having more than one card and using each card to its strengths could yield a greater total reward, then each combination of the Best N cards is presented as well.

      You can see the tool at http://www.creditcardtuneup.com/ .

      The tool does address college student cards and business credit cards.

    9. Frugal Says:

      Wow, that’s cool. But I don’t think I want N cards. I want as few as possible. Keep it simple. Don’t make a mess of your wallet.

    10. Joel Says:

      Thanks for the feedback Frugal.

      The very first version of the tool only showed the results for 1 card. I’ve hung out in forums with some fairly hardcore credit card users and they’re often discussing their strategies that involve more than one card. Admittedly, those folks probably aren’t the majority, but I was thinking I could at least show the “incremental reward for using one more card” and let each person decide how they want to balance the reward/mess tradeoff.

      +Joel

    11. Alexis Edwin Says:

      Impressive stuff. I thought it would help me in fetching a good deal of Credit cards. Although I am still in the process of analysing other offers, I was able to get some more insight regarding the same. Thanks a lot. Got an opportunity to compare and analyse what this new cashback portal offers for credit cards and they present you a fair deal. Check it out and I would be grateful to share your opinion.

    12. Alexis Edwin Says:

      Impressive stuff. I thought it would help me in fetching a good deal of credit cards. Although I am still in the process of analysing other offers, I was able to get some more insight regarding the same. Thanks a lot. Got an opportunity to compare and analyse what this new cashback portal offers for credit cards loans and they present you a fair deal. Check it out and I would be grateful to share your opinion.

    13. Frugal Says:

      Thanks Alexis for your compliment.

    14. Alexis Edwin Says:

      Thanx frugal

      you can check upcoming cashback portal http://www.ukonlinemarket.co.uk

      it covers everything from mobiles to finance, business, clothing everything

      Regards

      Alexis

    15. Zigzo.com Says:

      Frugal,

      This post is really great. I just wanted to say that i personally have had the Costco AmEx for about 1 year. It’s a great card, the AmEx website is really nice and one thing i REALLY LIKE about it is when you use quicken or something to download your transactions, AmEx has it all itemized already.

      So if you spend the $$$ eating out or something when the statement is downloaded all the items are categorized nicely.

      Anyways, i am going to subscribe to your blog’s RSS feed. Great info here, thank you.
      zigzo dot com

    16. Frugal Says:

      Zigzo.com,
      Really appreciate your encouragement.

    17. WhiteMarker Says:

      Hey This is a very informative forum. Thanks for all your contribution. I use The Chase Free Cash Rewards Visa card with intro 0%APR for 12 month, with no annual fee. Additionally, you can compare credit card offers at http://www.bestcreditoffers.com

    18. ASAP Credit Card Says:

      Unfortunately, the Citi Dividend card dropped from 5% to 2% cash back. The only credit cards which still offer 5% cash back are the AMEX Blue and Discover Platinum cards.

      If you’re looking for a Visa or Mastercard, the next best offers are the Chase Freedom and the Chase Perfect cards which offer 3% cash back. To find these offers and more, feel free to visit: ASAP Credit Card.com – Low Interest Credit Cards

    19. Mike Says:

      Some online mobile phone shop in UK does very good Cash Back programme and gifts.

    20. Andy Says:

      Frugal, I was looking all over the web for great deals too. I noticed that the Amex has a Blue Cash plan that offers 5% UNLIMITED cash back. I know there are probably some restrictions/conditions, but is this better than the Costco Card?

    21. cash back credit card enthusiast Says:

      The AmEx Blue Cash is usually better than the Costco card. *However*, the Blue Cash card is *tiered* and doesn’t really get good until your year-to-date spending exceeds $6500. So if your annual charging doesn’t go way over $6500 or you spend a lot in categories other than gas, groceries, and drugs, then other cards could be a better deal for you.

      I’d suggest using the calculator at Credit Card Tune-Up: Maximize Your Cash Back Rewards to find the card that’s best for your spending profile.

    22. cash back credit card user Says:

      “Other credit cards such as airline credit cards may end up giving you a slightly better value.” But ordinary rewards credit cards don’t help to save, they may actually encourage to spend more than you would without the reward bonuses. So I prefer cashback credit card. I like to use my Amex Blue cashback credit card. For total annual purchases of $6,500.01 to $50,000, I earn 5% back on everyday purchases (purchases made at gas stations, supermarkets, drug stores) and 1.5% back on all other purchases. For total annual purchases of $0 to $6,500, I earn 1% back on “everyday” purchases and 0.5% back on all other purchases.
      http://www.credit-land.com

    23. fred Says:

      Check these cards out—–
      1.Citi Drivers Edge Card

      0% APR on balance transfers for 12 months. Balance transfer fee applies with this offer.
      • 6% rebate for purchases made at supermarkets, drug stores, and gas stations for 12 months, 3% after that; 1% on other purchases
      • NO Annual Fee
      • Redeem rebates on new or used car, ANY make, ANY model, purchase or lease!

      2.Chase PerfectCard

      Earn a 6% rebate on all gas purchases for first 90 days your account is open
      • Earn a 3% rebate on all gas purchases after the introductory period
      • Earn a 1% rebate on all purchases everywhere MasterCard® or Visa® is accepted
      • All the rebates you earn are automatically credited toward future purchases

    24. Frugal Says:

      Thanks for your input, Fred.

    25. Aaron Lewis Says:

      I recently rebalanced my wallet’s plastic holdings and reported similar overall findings in a post on my blog, weworkharder.typepad.com. Post can be found at here.

      (See my linked post for links to these cards directly.)

      A few thoughts:

      (1) I found the Citi Dividend card redemption levels were lowered since your post, so I crossed if off my list. What I was happy to find in its place though was the Direct Rewards card from HSBC Bank, which offers 5% cash back on grocery, drug store, and gas purchases (and with no annual fee).

      (2) While I found a similar level of aversion to the restrictions from the Fidelity 529 College Rewards card, they have another one from Fidelity, the Fidelity Investment Rewards Card. As a consumer, I have recently come off the rewards-program bandwagon and have reverted to a simple “show me the money.” However, this card does both. With no annual fee, you get a straightforward 1-point-per-dollar rewards program that uses the WorldPoints reward network. But the reason I really like it is because every 5,000 points can be converted to a $75 deposit into an eligible Fidelity Account (equates to a 1.5% redemption rate).

      (3) Finally, the saver in me likes the One from American Express. At the end of each month, 1% of your net purchases are deposited into a high-yield savings account at American Express that is currently offering a 5% APY. It’s FDIC insured and good for the conservative investor who likes a savings account more than an investment account that can lose value. $35 annual fee after the first year, no minimum savings account balance required.

      (4) Stay away from MBNA/Bank of America cards. I worked in the credit card industry briefly several years ago. At the time, MBNA was really seen as a leader, pioneer, and innovator in the industry. They were well respected for great customer service and loyalty as well. No longer. They were acquired last year by B of A and I noticed an immediate and precipitous drop in their customer service levels and program redemption fine print. I dumped everything MBNA.

      (5) Playing the multiple-cards-for-different-purchases starts to hit diminishing returns in terms of sanity (and credit rating) beyond 2-4 cards. I understand taking advantage, but the ones I’ve chosen cover about every base I need. Other comments have listed over a 1/2 dozen. Please.

      Anyway, keep up the good work. Too many people try to find their way to riches by the get-rich-quick schemes, when the principles of financial independence really lie on living on less than you earn and making prudent decisions with your investment dollars. Thanks for sharing your living example.

    26. Apex Credit Cards Says:

      Mr. Frugal,

      This is a question in regards to the Citi Dividend Card. Do you know if we are required to report these dividend rebate checks when we file taxes?

      Thanks,
      Steve
      Credit Card Offers & Reviews

    27. Frugal Says:

      As far as I know, you are NOT required to report the rebate checks because they are considered as price reduction from the merchandise that you purchased.

      But do consult your own tax advisor. My advice is not legally binding, and just my opinion.

    28. Credit Card Deals Says:

      Good recommendations! Although the Citi Dividend card used to be one of the best cash back credit cards available, there are many other options (not mentioned above) to consider.

      I would suggest taking a look at the Discover Platinum Card. If you don’t find it necessary to carry a Visa or Mastercard, this might be one of the best options out there!

    29. credit card organizer Says:

      Blue Cash from American express is also a good option if you are looking for a cash back credit card. It gives up to 5% cash back with unlimited cahs rewards.

    30. Steve-O Says:

      The Amex SimplyCash Card is currently offering 5% cash rebate on gas(non supermarket or club stores)/cellular services/Office store purchases(eg: OD,staples) and 1% on all other purchases. It’s a pretty solid card w/ no annual fees, but it is a business card.

    31. Steve B Says:

      Correct me if I’m wrong but if a business card is set up with your social security than you can still be held personally responsible for the debt not just your company.

    32. WOW! Credit Cards Says:

      Now that the Citi Dividend Card has been reduced to 2%, there are only a few offers left with 5% cash back. The Discover More and AMEX Blue Card still offer 5%. And the Chase Freedom offers 3%.

      You can see an up-to-date list of cash rebate credit cards at WOW!CreditCards.com.

      Online Credit Card Applications

    33. still looking Says:

      I use the Emigrant Direct card. The savings rate is up to 5.05%. Again with 10K in savings, you receive 1.4% and it automatically deposits in your savings account for you. Very easy. I currently have the citibank card that dropped from 5% to 2% so I’ve been looking for another card for the gas, groceries, etc, however I use the Emigrant for “everyday purchases”.

      http://www.emigrantdirect.com

      I’ve also found another credit card via the internet. Although I like the platinum card I found this one, http://www.nationalcity.com, called “everyday rewards visa” with:
      Up to 4%* cash back
      4% on gasoline at the pump
      Up to $250 in monthly purchases
      3% on cinema and video rentals
      Up to $150 in monthly purchases
      2% on groceries, restaurants and fast food
      Up to $750 in monthly purchases
      Up to 1% on everything else
      .25% on first $10,000 each year, 1% thereafter with no limits

      Once you’ve accumulated $100 in rebates, we’ll automatically send you a check attached to your next monthly statement

    34. Robert The Debt Settlement Insider Says:

      Business credit cards typically hold the individual business owner personally liable for payment, but it does vary depending the terms of the contract.

      As a debt settlement insider, I can assure you that Citibank, MBNA, and Discover are the least compassionate companies when it comes to consumers being in a financial hardship. I would consider this as well when choosing a credit card—you never know when you’re going to be in bind some day.

    35. steve Says:

      Good recommendations! Although the Citi Dividend card used to be one of the best cash back credit cards available, there are many other options (not mentioned above) to consider

    36. fenphedra Says:

      Impressive stuff. I thought it would help me in fetching a good deal of credit cards. Although I am still in the process of analysing other offers, I was able to get some more insight regarding the same. Thanks a lot. Got an opportunity to compare and analyse what this new cashback portal offers for credit cards loans and they present you a fair deal. Check it out and I would be grateful to share your opinion

    37. Westpac Says:

      I am still looking for a good credit card offer that will suit me. This post got me thinking about getting a cash back credit card.

    38. Coles Myer Says:

      I’m very interested in this post because I have always wanted to know the comparison of cash back credit cards.