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:
- 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.)
- 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.
- 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.