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The cash-back credit card market is heating up

By , CardRatings contributor
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    Cash-back credit cards make you money as you shopThere's nothing like getting rewarded every time you swipe.

    The market is flooded with cash-back credit cards for consumers to choose from, but several companies recently have made moves to make cash-back rewards even more appealing to new applicants. Discover it® - Cashback Match™, Chase Freedom®, Chase Freedom Unlimited® and Blue Cash Preferred® Card from American Express (American Express is a CardRatings.com advertiser) are just a few of our picks for best cash-back credit cards that have stand-out programs designed to appeal to the serious cash-back credit card user. Here's how their sign-up bonuses and earning potential compare.

    Discover it® - Cashback Match™

    Like many cash-back cards, Discover it® - Cashback Match™ has no annual fee. You get 5 percent cash back in categories that change quarterly and 1 percent cash back on all other purchases. Check the 5 percent cashback calendar for a road map to how to maximize your rewards. From April to June 2016, for example, you can earn 5 percent cash back on up to $1,500 in purchases at restaurants and movies. The next quarter, July to September 2016 (July 1 - Sep 30) the categories change to home improvement stores and Amazon.com purchases.

    Your rewards never expire and you can redeem them for cash any time, but new cardholders also get another perk, one that really makes this card stand out: Discover it® - Cashback Match™ matches all the cashback you earn at the end of your first year. This sign-up bonus basically means you earn twice the cash back for every dollar you spend, regardless of whether you're spending in a 5 percent bonus cateogry or just making a standard 1 percent cash-back purchase. The card also comes with benefits such as zero fraud liability, the ability to freeze your card if it's lost or stolen, no foreign transaction fee, no late fee on your first late payment and free FICO® score tracking.

    Maximizing your rewards with Discover it® - Cashback MatchTM takes some strategy, as is the case with all rotating category cash-back cards. It's not worth getting if the 5 percent categories don't align with your buying preferences or if you aren't the type to strategize when it comes to your spending. But, with a little legwork, you can stack up some serious rewards with this card.

    Chase Freedom®

    Like Discover it® - Cashback MatchTMChase Freedom® offers 5 percent cash back in rotating categories, but it also has a cash bonus sign-up offer: New cardholders earn a $150 bonus after they spend $500 in the first three months, so it's a relatively quick cash-back bonus as compared to the Discover it® - Cashback MatchTM card which matches your cash back from the first year at the end of your first year. Chase Freedom®'s intro offer also includes a 0 percent APR on purchases and balance transfers for the first 15 months, making it an attractive option if you currently have a high-interest rate balance on another card or need to make a major purchase.

    Cardholders earn 5 percent cash back on up to $1,500 in purchases at grocery stores and wholesale clubs until June 30, 2016 (Walmart and Target aren't included) and an unlimited 1 percent cash back on all other purchases, for up to $75 cash back that's redeemable as cash, statement credit or electronic deposit. Like Discover it®, earning rewards with Chase Freedom® takes diligence because you must activate new 5 percent cash-back categories every three months (check the calendar here). The requirement is designed to keep customers informed of quarterly category changes so they can maximize their rewards. If you miss the activation period, you'll have to wait until the next quarter, but signing up for Chase's text message or email reminders can help you avoid missing out.

    Chase Freedom® has the same benefits as Discover it® - Cashback MatchTM -- no annual fee and zero fraud liability -- but there's a 3 percent foreign transaction fee and a 5 percent balance transfer fee (it's 3 percent for Discover it® - Cashback MatchTM). Even with these potential fees, you're more likely to maximize your rewards with Chase Freedom® because the cash-back categories are more comprehensive -- groceries, gas, restaurants and holiday shopping from October to December 2016.

    Chase Freedom Unlimited®

    Chase Freedom UnlimitedSM also has a $150 cash sign-up bonus and 0 percent purchase and balance transfer APR offers. The big difference here is that Chase Freedom Unlimited® is a flat-rate cash-back card. You earn unlimited 1.5 percent cash back on every purchase, every day and there's no annual fee that will cut into your earnings. Other benefits include zero fraud liability, price and purchase protection and rental car insurance.

    There's a 3 percent foreign transaction fee and 5 percent balance transfer fee, but it's flat-rate rewards system is perfect for consumers who'd rather not track a calendar or think too hard about which credit card to use in each situation. It's also a great option if you are an existing Chase® cardholder. As part of the Chase® Ultimate Rewards program, you can transfer rewards points from one card to another if you carry multiple Chase® cards.

    Redeem your Chase Freedom Unlimited® rewards for cash back or Ultimate Rewards points (worth 1 cent each for cash back and travel), which you can combine with points earned through Chase Freedom® card's 5 percent cash-back rewards opportunities. Or, transfer your points to your Chase Sapphire Preferred® card and get more value for your points when you redeem them through Chase®'s travel portal. You won't find this flexibility with most cash-back cards, but it's a smart strategy to amass rewards -- and cash in on their value -- more quickly.

    Blue Cash Preferred® Card from American Express

    With Blue Cash Preferred® Card from American Express, there aren't rotating rewards categories, but it does have a tiered rewards structure. You earn 6 percent cash back at U.S. supermarkets on up to $6,000 a year, 3 percent cash back at U.S. gas stations and select U.S. department stores  and 1 percent cash back on all other purchases. Though the Blue Cash Preferred® Card from American Express card works if you prefer more straightforward rewards, it has drawbacks. There's a $95 annual fee, a 2.7 percent foreign transaction fee and 3 percent balance transfer fee (with a $5 minimum). The annual fee alone will eat into your rewards if you don't spend at least $105 a month on groceries, so this card is best for everyday spending if you pay off your balance in full every month. Terms apply. See Rates and Fees

    The best cash-back credit cards cater to both types of consumers: those who enjoy the gamesmanship of maximizing their rewards and those who'd rather avoid all the fuss. Decide which category you fall into and thoroughly research the rewards structure and redemption options before you get lured in by an attractive sign-up bonus. Doing this due diligence will help you find a card that will work for you long after the flashy intro offers expire.

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