Cash-back credit cards aren't as exciting – or profitable – as other reward cards. But if you're frustrated with figuring out all the rules that govern your points, it might make sense to opt for one of these.
Many consumers are angry that their hard-earned points and miles are virtually impossible to redeem for free travel. Their frustration is justified, since many loyalty programs have lately been severely devalued.
For reward credit-card users who are fed up with their travel cards, cash-back rewards offers a welcome alternative to the rules and restrictions of frequent flier programs. Here are my picks for the top five cash-back credit cards on the market today…
For those who are looking for an automatic way to add some money to their investments, Fidelity sets the gold standard with 2-percent cash-back rewards that are deposited each month into your eligible account. There’s no annual fee, and it also comes in versions that contribute to either your retirement savings or a tax-free college savings program.
This product offers 1-percent cash back on most purchases, 3 percent on gasoline and department stores, and a whopping 6 percent at grocery stores. Smart shoppers will purchase gift cards at their grocery store to extend their cash back to other merchants. Unfortunately, this card has a $75 annual fee.
This card is offered by the Pentagon Federal Credit Union, which was originally established to provide financial services to members of our armed forces and their families. With a one-time $15 donation to a military charity, anyone can join and earn 1 percent cash back on most purchases and 5 percent cash back on airfare. There’s no annual fee for this card, making it a must for employees who book company-reimbursed travel on their own cards.
This new product almost matches the standard set by Fidelity. It offers businesses and sole proprietors 2 percent cash back on all purchases, but there’s an annual fee of $59 that’s waived the first year. As with all Capital One cards, there are no foreign transaction fees.
Call it a travel card or call it a cash-back card, but it earns two “miles” in their rewards program – which are easily redeemed for statement credits toward any travel-related purchase. So long as you spend at least 2 percent of charges on any airfare, hotels, or rental car purchases, this is the same as having a cash back card.
There’s no need to endure another fight with your airline or hotel company when the award reservations you want are not available. By switching to a cash back credit card, you can enjoy impressive rewards without the rules and restrictions.