Credit cards should always be used correctly, but they also provide unique benefits that the alternatives don’t offer. Some credit cards come with lucrative rewards, including cashback, discounts, reward points, and more.
As long as you avoid carrying a balance, you can save a lot of money simply by using the right credit card for each purchase.
Different cards are better for different people, but a few cards stand out from the rest. If you’re interested in getting a credit card, consider the options on this list for unmatched rewards and cashback. Keep in mind that some cards require a good credit history—if you don’t qualify for the card you want, take steps to increase your credit score before applying again.
Here are the 5 best rewards and cashback credit cards:
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Discover It Cash Back
The Discover it Cash Back card is one of the most effective credit cards for earning rewards, and it’s available for no annual fee. Cardholders earn 5 percent in cashback at various places, including Amazon, restaurants, grocery stores, and more. The 5 percent reward category changes each quarter, so check the calendar every three months to take advantage of the increased rewards.
Discover also offers new users an unlimited match on cashback rewards during their first year. If you earn $500 in cashback, for example, you’ll receive twice that amount at the end of the year. In addition to the 5 percent cashback category each quarter, you’ll also earn 1 percent rewards on all other purchases.
Unlike some other credit cards, the Discover it Cash Back card gives you rewards in cash. This means that there are no restrictions on how you can use the money, and your rewards will never expire. You won’t be charged anything aside from interest, so Discover it Cash Back is one of the top options currently available.
Discover it Cash Back comes with 0 percent APR for the first 14 months, giving you time to finance major purchases without paying any interest. Keep in mind that your standard rate will increase to 14.24%-25.24% after the grace period, so it’s important to pay off your balance before the interest kicks in.
Bank of America Cash Rewards
Bank of America’s Cash Rewards is another popular cashback card that offers unparalleled flexibility. In contrast to cards like Discover it Cash Back, which offer increased rewards on specific items, the Bank of America Cash Rewards card lets you choose your own category. If you make $1,000 in purchases during your first 90 days, you’ll also earn an additional $200 in cash rewards.
Like Discover it Cash Back, Bank of America Cash Rewards comes with 1 percent cash back on all purchases, and there’s no annual fee. You’ll also earn 2 percent at wholesale clubs and grocery stores, plus 3 percent in your chosen category. The available categories are home improvement, drug stores, travel, dining, online shopping, and gas.
After an introductory 0 percent APR for your first 15 billing cycles, you’ll be charged a variable APR of 16.24-26.24% on your balance. If you carry too high of a balance, you could lose more money in interest than earn in cashback.
Like Discover it Cash Back, the Chase Freedom card offers 5 percent cash back on certain categories, higher than is available with Bank of America Cash Rewards. If you activate by September 14th, for example, you’ll get 5 percent cash back at gas stations and certain streaming services on all purchases made during Q3 2019.
There’s no minimum to redeem your rewards, and cashback earned through Chase Freedom never expires. That said, 5 percent cash back rewards are only offered on your first $1,500 in purchases each quarter—after that, you’ll only receive 1 percent cash back on all purchases. Chase Freedom also offers a $150 bonus if you spend at least $500 in your first three months with the card.
Similar to the other cards on this list, the Chase Freedom card comes with a 0 percent APR during an introductory period of 15 months. After that, you’ll be charged 17.24-25.99 percent based on their variable APR. Keep in mind that the 0 percent interest rate also applies to balance transfers, making Chase Freedom an attractive option for anyone looking to pay off credit card balances while being charged the least interest possible.
It’s important to be aware of the risks of credit card debt, but credit cards can be a surprisingly effective way to build wealth. Each of the cards on this list offers valuable rewards along with a long introductory period during which you won’t be charged interest.
By paying off your balance each month and keeping utilization below around 30 percent, you’ll be saving money and building your credit at the same time.
Citi Double Cash
Rather than providing elevated cashback rates on specific categories, the Citi Double Cash card gives you 2% back on everything.
However, you don’t necessarily get the cashback all at once; you get 1% back upon making a purchase and the other 1% back upon paying your balance.
Similar to other cashback cards, this one has no pesky annual fee to worry about, so your rewards are not diminished.
American Express Blue Cash Preferred
If you buy many groceries for yourself and your family, I’d recommend having the American Express Blue Cash Preferred card in your wallet.
With only a $95 annual fee, this card gives a whopping 6% cashback at grocery stores (up to $6,000 annual spend) as well as 3% back at gas stations.
If you don’t spend quite as much on groceries as would merit the $95 annual fee, this card has a younger sibling — the American Express Blue Cash Everyday.
The American Express Blue Cash Everyday card has no annual fee but only gives 3% back at grocery stores and 2% back at gas stations.
Do the math to see which card is better for your spending habits!