Q: I'm looking for a credit card for everyday purchases, with cash back options that are easy to understand and manage.
Q: I'm looking for a credit card for everyday purchases, roughly $1,000 per month, with cash back options that are easy to understand and manage. Any advice?
A: You're in luck. There's practically a cold war going on between banks over cash back credit cards. Although these accounts come with higher APRs than "plain vanilla" credit cards, setting your rewards and payments on autopilot can save you plenty of cash.
Our favorite cash back credit cards all feature reward tracking websites that enable you to request statement credits or rebate checks without forcing you to pick up the phone:
- Blue Cash Preferred® from American Express. This credit card for people with excellent credit features one of the best reward programs on the market. Despite a $75 annual fee, you can earn 6 percent cash back at US supermarkets up to $6,000 per year in purchases, 3 percent cash back on gasoline at US gas stations and 3 percent cash back at select US department stores, 1 percent cash back on other purchases. Terms and limitations apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. Terms and restrictions apply. With a less lofty credit score, you might still qualify for this card's little cousin, Blue Cash Everyday Card from American Express. That card has no annual fee, with a "3-2-1" rebate structure. Terms and restrictions apply.
- Chase Freedom®. Easy to track, you'll earn 1 percent on your everyday purchases. If you sign up for seasonal bonus offers, you can earn up to 5 percent on promotional categories, subject to spend limits. Just mark your calendar for the four times each year you need to opt-in for each offer. This card is for people with good to excellent credit and has no annual fee.
- BankAmericard Cash Rewards. Bank of America offers 2 percent at grocery stores and 3 percent on gas for the first $1,500 in combined grocery and gas purchases each quarter and 1 percent cash back on everything else you buy with this card. If you deposit your rewards directly into a linked Bank of America checking or savings account, you'll enjoy a 10 percent customer cash reward bonus. This card is for people with excellent credit and has no annual fee.
Getting the most from your cash back credit card requires a little focus and discipline that can actually make your personal finance strategy more smooth in the long run. Funnel as much of your monthly spending to your new card as possible, including any bills that don't charge a premium to pay with a credit card. Pay down your balance every month, treating your account almost like it's a prepaid debit card. That way, you won't sacrifice your rewards to high finance charges.