The Best Cash-Back Card for Each Bonus Category

Sep 10, 2018

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Update: Some offers mentioned below are no longer available. The Wells Fargo Propel American Express® card is no longer open to new applications. View the current offers here.

At this point, it’s pretty much gospel that cash-back credit cards aren’t nearly as lucrative as points- and miles-earning cards. That is particularly true when it comes to the outsized welcome bonuses offered by the premium travel rewards cards. But cash-back cards have been making some noise lately on category bonuses, with new or revamped cards offering returns of up to 4% on certain categories while charging nominal annual fees.

What’s more, these new offerings have intruded on bonus category territory that previously had been owned by cards offering points as rewards, like travel, dining and entertainment. That makes for good news if you are looking to earn big rewards for spending on these popular categories, but you don’t want all the complexity that comes with a points rewards program.

Let’s have a look at the best cash-back cards for each of the major spending categories. Many of these cards offer excellent returns across multiple categories, so be sure to find the one that offers the best combination of rewards for how you spend.

Dining and Entertainment — Capital One Savor Cash Rewards Credit Card

Entertainment rewards: Earn 4% cash back on entertainment purchases, “including tickets to a movie, play, concert, sporting event, tourist attraction, theme park, aquarium, zoo, dance club, pool hall or bowling alley. Also, making purchases at record store and video rental locations.”

Other rewards and benefits: Earn 4% cash back on dining, including restaurants, cafes, bars, lounges, fast-food chains and bakeries; 2% cash back on groceries and 1% cash back on all other purchases. You’ll pay no foreign transaction fee on purchases outside the US, and you’ll receive protective benefits like extended warranty and price protection.

Welcome bonus: Earn $500 after spending $3,000 in purchases in the first three months after opening the account. That’s one of the best cash-back welcome bonuses available.

Annual fee: $95, waived the first year

Keep in mind: Cable, digital streaming and subscription services won’t count as entertainment purchases, and superstores like Target and Walmart are excluded from the grocery store category. This card is unmatched when it comes to cash-back cards offering rewards on entertainment spending, but probably shouldn’t be your go-to choice for grocery rewards, as there are several credit cards that offer higher returns.

The information for the Capital One Savor Cash Rewards Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Another Dining Option — Uber Visa Card

Dining rewards: Earn 4% cash back on restaurants, takeout and bars, including UberEats.

Other rewards and perks: Earn 3% back on airfare, hotel and vacation home rentals; 2% back on online purchases including Uber, online shopping, video and music streaming services and 1% on all other purchases. You’ll also receive mobile phone insurance for up to $600 for damage and theft when you use the card to pay your phone bill, and if you spend at least $5,000 on the card in a year, you’ll get a $50 credit that will automatically be applied toward online subscription services such as Netflix.

Welcome bonus: Earn $100 after spending $500 on purchases in the first 90 days.

Annual fee: $0

Keep in mind: Uber Visa’s cash-back rate on restaurant spending is equaled only by the Capital One Savor Cash Rewards Credit Card. In fact, there are only a handful of points-and-miles based cards that can beat these two cash-back cards on returns. Both the Chase Sapphire Reserve and Chase Sapphire Preferred Card are potentially more valuable in this category, with returns estimated at 6 cents and 4 cents respectively when redeeming Ultimate Rewards points through travel partners.

Groceries — Blue Cash Preferred® Card from American Express

Grocery rewards: Earn 6% cash back at US supermarkets (on up to $6,000 per year in purchases, then 1%).

Other rewards and benefits: Earn 3% cash back at US gas stations and at select US department stores and 1% back on other purchases. This card is also eligible for enrollment in Amex Offers, a discount program that sends targeted offers to enrolled cardholders.

Welcome bonus: Earn a $200 statement credit after you spend $1,000 in purchases within the first three months.

Annual fee: $95

Keep in mind: Be sure to steer clear of these types of stores when shopping for groceries, as they don’t qualify for 6% cash back:

  • Specialty stores like fish markets, cheese shops and wine shops
  • Superstores, like Amazon, Target and Walmart
  • Warehouse clubs like BJ’s Club

Also, make sure to leave this card at home if you’re traveling abroad, as the Blue Cash Preferred charges a 2.7% foreign transaction fee.

Gas — Costco Anywhere Visa Card by Citi

Gas rewards: Earn 4% cash back on eligible gas for the first $7,000 per year (1% thereafter). This is available worldwide, including Costco gas stations. The 4% bonus rate will not be applied to gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco or for fuel used for non-automobile purposes.

Other rewards and benefits: Earn 3% cash back on restaurants and eligible travel purchases, including airfare, hotels, car rentals, travel agencies, cruise lines and Costco Travel; 2% cash back on all other purchases from Costco and and 1% cash back on all other purchases. You’ll also enjoy several purchase protections, including primary rental car insurance (on rentals made outside the US only) and trip cancellation and interruption protection. There are no foreign transaction fees.

Welcome bonus: None

Annual fee: $0

Keep in mind: You have to be a Costco member to be eligible for this card, and although this is a cash-back card, you can’t earn statement credits or redeem your rewards at any time. Instead, you’ll receive a reward coupon annually, redeemable for cash or merchandise at US Costco warehouses. If the redemption inflexibility turns you off, another card to consider is the Bank of America Cash Rewards credit card, which returns 3% cash back (for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter, then 1%)

Travel — Wells Fargo Propel American Express® card

Travel rewards: Earn 3% on travel, including flights, hotels, homestays, car rentals, taxis, gas station purchases and rideshares. If you’re strictly looking to earn the best return (and owning a cash-back card isn’t a must), you’ll be better off with one of the top travel rewards credit cards instead. But for cash-back options, this and Uber Visa are among the best in this category.

Other rewards and benefits: Earn 3% on on dining and on select streaming services, including Apple Music, Hulu, Netflix, Pandora, Sirius XM Radio and Spotify Premium, when you pay your bill with your card and 1% on all other purchases. You’ll also enjoy cell phone protection. When you pay your monthly bill with the Propel, you can get up to $600 in protection (subject to a $25 deductible) against covered damage or theft.

Welcome bonus: N/A

Annual fee: $0

Keep in mind: Rewards can be redeemed for more than just cash back, but all redemption options generally are worth the same. Other options include travel, gift cards and charity donations. You can redeem rewards for airfare at 1.5 cents each on the Wells Fargo travel portal when you own another card that earns Go Far Rewards points, like the Wells Fargo Visa Signature® Card. And if you spend $50,000 in a calendar year on the Wells Fargo Visa, that redemption rate jumps to 1.75 cents per point, which would make 3x points worth as much as 5.25 cents per dollar when redeemed for airfare. (The information for the Wells Fargo Visa Signature Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.)

Office Supplies — SimplyCash® Plus Business Credit Card from American Express

Office supply rewards: Earn 5% cash back at US office supply stores and on wireless telephone services purchased directly from US service providers on up to $50,000 in purchases during a calendar year, then 1% thereafter.

Other rewards and benefits: American Express allows you to choose another category of spending that earns 3% cash back on up to $50,000 in annual spending (then 1%). Pick from one of eight categories — airfare purchased directly from airlines, hotel rooms purchased directly from hotels, car rentals purchased from select car rental companies, US gas stations, US restaurants, US purchases for advertising in select media, US purchases for shipping and US computer hardware, software, and cloud computing purchases made directly from select providers. You’ll earn 1% cash back on all other eligible spending.

Welcome bonus: None

Annual fee: None

Keep in mind: You have to own a business or have a side hustle in order to be eligible for this card. Another option for office supply spending is the Ink Business Cash Credit Card, which offers 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year (then 1%). The lower cap puts this card slightly behind SimplyCash Plus.

Rotating Bonus Categories — Chase Freedom

Rewards and benefits: You’ll earn 1% cash back on all purchases. That’s not very appealing. But the big appeal for Chase Freedom (No longer open to new applicants) is the 5% cash back on up to $1,500 in combined purchases at merchants in the card’s quarterly bonus categories. In 2018, Chase has included gas purchases and Chase Pay twice in the bonus categories, along with internet/cable/phone services; select mobile wallet purchases; grocery stores; PayPal, Lyft and Walgreens each one time.

Welcome Bonus: Earn $150 cash back after you spend $500 on purchases during your first three months after account opening.

Annual fee: None

Keep in mind: To qualify for the 5% cash back, you’ll need to activate the bonus categories every quarter. Chase offers numerous activation options, including a one-click email activation the issuer will send you every quarter.

If you plan to primarily redeem your rewards in the form of cash back, know that you’ll only be able to earn a maximum of $75 per quarter on the bonus categories ($1,500 in purchases at 5% cash back). If, however, you pair the card with one that’s part of the Ultimate Rewards program and transfer the Freedom points to that card, you can more than double the annual value of rewards. ($1,500 in purchases at 5x points equals 7,500 UR points per quarter. Those points are worth $150, according to TPG valuations. That’s $600 per year.) The ability to transfer points is the big reason why this card outshines an otherwise similar rotating bonus card, Discover It Cash Back.

The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Non-Bonus Spending — Citi Double Cash Card

Rewards and benefits: Earn 1% when you buy and then another 1% as you pay on all spending. This is among the best flat-rate rewards cards available.

Welcome bonus: None

Annual fee: None

Keep in mind: You can do better with something like the Chase Freedom Unlimited, which offers 1.5% cash back on all purchases, but only if you pair the card with one in the Ultimate Rewards program and transfer your rewards to that account. Then the Freedom Unlimited offers a 3% return on all spending.

You’ll pay a 3% foreign transaction fee on purchases outside the US. Use another card for overseas spending. The information for the Chase Freedom card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom Line

If your primary goal is to grab the most lucrative rewards, in many cases you’ll fall short by choosing a cash-back credit card. But with new or improved offers from cards like the Capital One Savor, Wells Fargo Propel American Express® card and the Uber Visa, the gap is narrowing. What’s more, many of these cards come with no or small annual fees attached, meaning the spending threshold you have to hit before the rewards become profitable is smaller. If you’ve never considered a cash-back card because the rewards (or the welcome bonus) were too small, now may be the time to take another look.

Featured photo by @rawpixel via Unsplash

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