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Here at The Points Guy, our focus may be earning and spending points and miles, but sometimes you need to diversify your rewards with a good cash-back card. TPG Senior Points & Miles Contributor Jason Steele shares five interesting options below.
While they can’t rival the top points- and miles-earning cards when it comes to earning free trips, cash-back rewards cards can figure into your award travel strategy. You can use them to pay taxes and fees on award tickets, for example, and they can also cover other expenses to reduce your travel costs to almost zero.
With the holiday shopping season upon us, I want to introduce you to five cash-back credit cards that you might not be familiar with, all of which offer returns on select categories of purchases.
TD Bank isn’t known for offering travel reward credit cards, but its latest cash-back offer is quite competitive. New applicants receive $200 cash back when they use their card to spend $1,500 within the first 90 days of account opening. In addition, you can earn two cents per dollar (2% back) on dining purchases from your local deli to fast food, coffee shops, casual restaurants and fine dining. You’ll earn 1% cash back on all other purchases. Another benefit to new applicants is a 0% introductory APR on balance transfers for 12 months and 13.24%-23.24% variable APR thereafter based on creditworthiness. There is a 4% balance transfer fee (minimum $10) for each transfer, minimum balance transfer request amount is $250. Plus, the card doesn’t come with an annual fee and no foreign transaction fees.
This card also comes with Visa Signature benefits, including lost luggage reimbursement, a $500 purchase security policy and travel accident insurance. For more information on these benefits, check out my post, Comparing Visa Signature and World Elite MasterCard Benefits.
Disclaimer: Note that the TD Cash Rewards Credit Card is only available in the following states: Connecticut, Delaware, D.C., Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont and Virginia.
This card offers new applicants $100 cash back after spending just $500 within 90 days of account opening, as well as 12 billing cycles of interest-free financing on both new purchases and balance transfers (with a 3% balance transfer fee). You’ll also earn 3% cash back on gas and 2% cash back on groceries, but only on your first $1,500 of combined grocery and gas spending each quarter, and 1% cash back for all other purchases.
In addition, Bank of America offers significant bonuses to those who have other accounts with the retail banking giant. You get a 10% bonus just for redeeming your rewards with a Bank of America checking or savings account, and even higher bonuses when you’re a Preferred Client. A 25% bonus is offered to those with a combined balance of $20,000-$50,000, including Merrill Lynch or Merrill Edge investment accounts. Those who have combined balances of $50,000-$100,000 will receive a 50% bonus, and those with $100,000 or more will get a whopping 75% bonus. So in the best case scenario, you could earn 5.25% cash back on gas each quarter and 3.5% cash back on groceries. There’s no annual fee for this card. For more information, see my post, How to Earn Bonus Rewards through Your Banking Relationship.
3. American Express Blue Cash (Everyday and Preferred)
This card is offered in two versions, the Blue Cash Everyday and the Blue Cash Preferred, and each features competitive cash-back rates. The Blue Cash Everyday has no annual fee and offers 3% cash back at US supermarkets on up to $6,000 spent each year; 2% cash back at US gas stations and department stores; and 1% cash back on all other purchases. It also offers new applicants $100 in cash back after spending $1,000 on new purchases within three months of account opening. Other benefits include 15 months of 0% APR financing on both new purchases and balance transfers (with a 3% balance transfer fee), as well as purchase protection, return protection and extended warranty coverage.
The Blue Cash Preferred version has a $75 annual fee, but offers even higher rates of cash back, including an amazing 6% cash back on up to $6,000 spent each year at US supermarkets. You’ll earn 3% cash back at US gas stations and select department stores, and 1% cash back on all other purchases. This card has a sign-up bonus of $150 after spending $1,000 on new purchases within three months of account opening.
4. Barclaycard Rewards MasterCard
The Barclaycard Arrival Plus is a great card for earning miles toward travel statement credits, but the Barclaycard Rewards MasterCard simply offers cash back without having to redeem rewards for travel expenses. You’ll earn 2x points on purchases for gas, groceries and utilities, and 1x points on all other purchases. Cash-back rewards can be redeemed for statement credits or gift cards starting at $10 for 1,000 points, and your rewards never expire.
As with other cards from Barclaycard, this product is compatible with chip and PIN, so you can use it in Europe and other places where it’s required at unattended kiosks like those in train stations. Other benefits include a complimentary FICO score each month and a credit line increase review after five months of on-time payments.
While this card isn’t going to impress you with super-high rates of cash back, it does fill a very important niche when it comes to reward credit cards. If you have a student in your life who can responsibly use credit, you’d be doing him or her a huge service by recommending this card. The Journey Student Rewards card offers students 1% cash back on all purchases, and an additional 25% bonus on the cash back earned each month the account holder pays on time, for a total of 1.25% cash back.
While this isn’t a spectacular rate of return by the standards of travel reward cards — most of which require having excellent credit scores — it’s quite good for a reward card offered to students with average credit. In addition, the monthly bonus is a great way to underscore the importance of getting into the habit of making on-time payments every month. Furthermore, it includes free access to Capital One’s Credit Tracker app, and like all Capital One cards, it has no foreign transaction fees. There’s no annual fee for this card.
What’s your favorite cash-back credit card? Tell us in the comments below!
The Barclaycard Arrival Plus is one of the best travel credit cards on the market right now because you can use the miles to cover many expenses that traditional miles won’t cover. Plus, for a limited time the sign-up bonus is 50,000 bonus miles if you make $3,000 or more in purchases in the first 90 days after account opening – which equates to $525 when you use them for travel expenses.