All rewards credit cards are not created equal. Some cards pay back airline miles good on only one airline, other cards pay points that users can redeem for merchandise or gift cards.
Others pay cold hard cash.
Although frequent flyers obsessed with collecting miles should stick with travel rewards cards, cash rewards credit cards are the best choice for the rest of us. As credit card issuers begin to bounce back from the recession and this year’s new credit card regulations, they’re beginning to get competitive again, which is good news for card users…especially anybody in the market for new plastic. Let’s take a look at the three cards I consider to be the best cash rewards credit cards.
Note: Rewards credit cards are only “rewarding” if you pay your balance in full every month. In other words, you don’t pay interest. If you’re just starting out with credit cards, read how to use a credit card responsibly first.
Discover More Card
Discover was actually the first credit card to offer cash back. Since then, rewards credit cards have become the rule rather than the exception, but the Discover More Card still stands out for a cash back credit card. The More Card:
- Pays a flat 1% cash back on all purchases and 5% cash back on certain categories like gas, groceries or travel (the actually categories change every few months).
- Has no rewards limits and no annual fee.
- For applicants with excellent credit, offers one of the lowest regular APRs among cash rewards credit cards (as low as 11.99% at the time of publication).
Although Discover Cards are widely accepted in the United States, there are still places that only take Visa or MasterCard. Learn more about this card »
Chase Freedom Card
The Chase Freedom Card burst onto the cash rewards credit card scene a few years ago and has been a popular choice for cashbackers ever since. The current Freedom Card offers:
- 1% cash back on all purchases with no limits and 5% cash back on rotating categories like gas, home improvement and department stores.
- No annual fee
- Regular APRs starting at 11.99%
- 0% APR on purchases for six months and balance transfers for 12 months.
In a nutshell: Chase Freedom is a popular choice because it’s a universally-accepted Visa/Mastercard and combines a decent APR with the chance to earn more than 1% cash back in rotating categories. Learn more about this card »
Blue Cash EverydaySM Card from American Express
Probably the best straightforward cash rewards out there comes from Blue Cash EverydaySM Card from American Express, which offers:
- No annual fee, flexibility to pay over time
- Get 3% cash back at supermarkets, 2% cash back at gas stations and department stores, and 1% cash back on all other purchases
- NO spend minimum, NO enrollment, and NO rotating rewards categories
- Get a $25 Referral Bonus for each friend or family member who is approved for the Card
There’s also a $75-annual fee preferred version of Blue Cash that pays 6% back on groceries, 3% on gas/department stores, and 1% on everything else which may earn some card-holders even more cash back even with the fee. Learn more about this card »
Still searching for the perfect credit card? Compare hundreds of cards at America’s most trusted card comparison site: CreditCards.com – Apply for a credit card today
Disclaimer: One way I’m able to support my blogging while helping you is to link to products I like and earn a referral commission if you sign up. I only link to products I trust. That said, you should know that if you click the links to these cards and ultimately apply for and are approved for that card, I may be paid for that. If you choose to support Money Under 30 in that way, thanks!
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I'm David Weliver. At 26, I had NO savings and NO financial plan. I was maxed out, stressed out, and fed up. Then, I changed. I repaid $80k of debt, tripled my income, and bought a home. I'll show you how to get similar results. 
Chase Freedom now has an annual fee and is kicking in for cardholders sometime this year (when this happens is based on when you signed up.) When you sign up you get the first year free.
Discover pays UP TO 1% cash back on all purchases. It is actually less than 1% until you spend at least $3,000 over the course of the year, and then it jumps to 1%. I called Discover last week and learned that lovely fact.
I had the Discover More card about a year ago. In addition to the “up to 1%” trick mentioned above. They also have limits that you quickly exceed for the 5% cash back categories. This may have changed since, but I recall one instance offering 5% cash back on gas and groceries for 3 months… up to $400. After that it went back to 1%. It’s not a bad card, but consider these tricks before jumping over.
Wow, thanks for bringing up those points. That’s really sneaky fine print on Discover’s part; I’ve never noticed that about their rewards program.
And I had heard Chase added a fee to some Freedom users but I thought it was those who had a slightly richer rewards structure; they’re still advertising no annual fee for new members but that would be equally sneaky if they start tacking them on after you sign up.
A note about Chase. I had a card with them for several years and had a limit of $10,000. I did not keep a balance and instead only kept it open for emergencies. I received a letter from them this week telling me they had changed my limit to $500! I called to ask why, and I was told it was because I don’t use it often (I was also told I should have read the letter in more detail as the letter would have explained that-as if I hadn’t bothered to read it…).
I let them know that when I did use it, it was almost always for more than $500 (when have you seen a car repair for less?), and I had always paid the balance in full. Apparently that didn’t matter. I was told my ONLY option was to wait 30 days before I could request an increase, but would not necessarily be reinstated to the original limit. I know that asking for an increase will ding my credit score just as they have altered my score by changing my debt utilization ratio—without my permission. I had them cancel the account.
My cash rewards is great. 2% off all purchases all year long with no limits. The fact that the card company is no longer accepting any other applications is great. That means I’m part of an exclusive group and I can brag about it to my buddies. Good luck finding a better rewards card than the one I have. I haven’t found one better.
I have a Chase Freedom (dates back to 1997), no annual fee, accumulates 1% on everything and 5% on some quarterly categories. When you accum $200, you can get a check for $250 so that’s equivalent to 1.25% for 1% rewards, 6.25% for 5% rewards. For all cards, PAY ATTENTION TO THE REDEMPTION RULES. Some are deceptive, e.g. the Discover “up to 1%”!!
The $200 to $250 rewards is no longer applicable. I had that option for a while and used it every time. Chase changed it so that you could only redeem at 1% rewards rates. 2000 points equal to $20 and only allows you to redeem at that rate.
Every debt free person in America should use cash back credit cards. Pay the debt off every month, and it is free money. In the last three years the credit card companies have personally paid me thousands. I don’t think I’m alone, but sadly I know that I’m in the minority
. I know people who are debt free with a lot of money in the bank that claim that credit card companies are the devil. I completely disagree. Cash back cards are the best.
Just, for god sake, don’t look at it as a license to shop. Ugh!