The Best Cash Back Credit Cards

Updated 4/28/2011:

Not all cash back credit cards were created equal. And not everyone has the time needed to sift through and analyze which ones are the best. This list is intended to be an unbiased review of the best personal cash back cards currently on the market.

Unlike lists you’ll find on other websites, which exclude credit cards that don’t pay them money, this list is meant to be comprehensive, meaning that there’s a good chance you’ll find excellent cards listed here that are omitted elsewhere. Check it out!

Fidelity Investment Rewards American Express Card

Pros: Untiered, uncapped 2% rebate on all purchases, low 1% forex fee Cons: Requires Fidelity brokerage account, Amex not universally accepted

While not quite measuring up to the no longer available Schwab Visa, the Fidelity Amex still delivers the best untiered, uncapped rate of cash back on purchases available on the market today. You earn a 2% rebate on all purchases, deposited into a Fidelity account of your choice. The Fidelity account may be a non-retirement account, an IRA or 529 college savings plan.

Cardholders earn 2 points for each $1 in net retail purchases. Points can be redeemed in 5,000 point increments into your eligible Fidelity account, at a rate of 1 cent per point.

One often-overlooked benefit of the Fidelity Amex is that it only carries a 1% fee for purchases made in foreign currencies, compared to the 2-3% fee that credit cards usually assess.

One of the drawbacks of the card is that it is an Amex, meaning that you’ll need to still carry a Visa and/or MasterCard in your wallet for those places that don’t accept American Express.

If you already have an existing relationship with Fidelity or are strongly considering one, then this is a great card to consider.

Fidelity Investment Rewards Visa Signature Card

Pros: Up to 2% rebate on all purchases Cons: Requires Fidelity brokerage account

The Fidelity Visa is very similar to the Fidelity Amex, though it offers a slightly lower rebate than its sibling. While the Amex offers a flat 2% cash back, the Visa card has a tiered rebate structure. For the first $15,000 in purchases of the year, you’ll earn 1.5 points for each $1. After you’ve reached $15,000 in spending, you’ll receive 2 points per $1 in purchases. As with the Amex, your points can be automatically converted into a deposit into your eligible Fidelity account in $50 increments.

Unfortunately, the Fidelity Visa also charges a 3% forex fee, compared to the 1% charged by its Amex sibling.

The upside to the Visa is that it does have more universal acceptance, so if you’re looking to have just a single credit card in your wallet, it may be the card you’re looking for.

Honorable Mention

Blue Cash Everyday(SM) Card from American Express

• Earn $100 cash back in Reward Dollars when you spend $1,000 in the first three months of Cardmembership.
• Get 3% cash back at U.S. stand-alone supermarkets, 2% cash back on gasoline at U.S. stand-alone gas stations and select major department stores; 1% cash back on other purchases.
• Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. Cash back is earned only on eligible purchases.

Amex revamped its Blue Cash card, making its reward structure more straight-forward and attractive to lower or moderate spenders. It did come at a cost, however, as bigger spenders will not find the new versions of the card as attractive.

Gone is the tiered reward structure. From the first dollar you spend, you’ll earn 3% cash back at grocery stores, 2% at gas stations and department stores and 1% on all other purchases. There is no minimum spend requirement.

Rebates are earned in the form of Reward Dollars, which may be redeemed for statement credits, or additional items like merchandise and gift cards, whenever your available Reward Dollar balance is 25 or more.

The Blue Cash Everyday card also has a sibling dubbed the Blue Cash Preferred card. The Blue Cash Preferred card carries a $75 annual fee and earns a 6% rebate at supermarkets, 3% at gas stations and department stores and 1% everywhere else.

For those who make a lot of purchases at the grocery store (or those who are more creative and buy store gift cards there), these cards are a good option.

Penfed Visa Platinum Cashback Rewards Card

• 5% rebate on gas paid at the pump
• 1% rebate on all other purchases
• Rebate applied automatically every month as a statement credit
• Must be a PenFed Credit Union member

PenFed’s cash back credit card is arguably the best credit card for gas purchases available. It earns an excellent 5% rebate on gas paid at the pump, and a pedestrian 1% rebate on all other purchases. Your cash back is automatically applied monthly as a statement credit.

In order to get a card, you must be a member of the credit union. You’re automatically eligible if you’re a member of the military or related to someone who is, work at a qualified business or at the Red Cross. Otherwise, you can become eligible by joining the Voices for America’s Troops for a one-time $15 fee.

Fort Knox Visa Platinum Card

• 5% rebate on gas paid at the pump
• 1.25% rebate on all other purchases
• Rebate applied automatically every month as a statement credit
• Must be a Fort Knox Credit Union member

A lesser known (but slightly richer) cousin of the PenFed Visa is the Fort Knox Visa. It pays 5% cash back on gas and 1.25% on all other purchases. Its membership requirement is also easy to satisfy, as there is a consumer’s organization, the American Consumer Council, that you can join for free as part of your application process. Membership to the credit union does require a payment of $15 upfront, $5 of which represents a share in the credit union and $10 of which covers the one-time membership fee.

Be careful that you continue to use the card if you get it, as there is a $26 inactivity fee if you leave it dormant for a year.

PNC CashBuilder Visa Credit Card

• Flat 1.75% rebate possible
• Requires extensive banking relationship with PNC Bank
• Cash back rewards credited to checking, savings or CashBuilder account

By default, the PNC CashBuilder Visa Credit Card earns a flat 1.25% cash back rebate. However, your rebate can be boosted depending upon either your level of spending or the extent of your relationship with PNC, up to a possible flat 1.75% cash back.

Costco TrueEarnings Card from American Express

• 3% rebate on gas (up to $3,000 per year), 3% rebate on restaurants, 2% for travel, 1% rebate on all other purchases
• No annual fee for Costco members

The noteworthy aspects of this card are the 3% rebate on restaurants and 2% on travel. That is unmatched by any other no annual fee personal credit card, so if those categories comprise a good percentage of your spending, this is a card you’ll want to consider. For Costco members, this card can also double as your membership card.

Rebates are paid annually in the form of a check that must be redeemed at Costco. However, if you don’t want to spend your whole rebate there, you can purchase something cheap and they’ll give you back the difference in cash.

AARP Platinum Visa

• 5% cash back on all purchases for 6 months
• After promo period ends, 3% rebate on travel and 1% on everything else

The AARP credit card is on this list for one and only one reason: 5% cash back on all purchases for 6 months represents a big earnings opportunity for those who can push through a lot of spending in a short amount of time. After the promo period expires, the card earns 3% cash back on travel and 1% on everything else.

Discover More Card

• 5% cash back in quarterly rotating categories
• Up to 1% cash back on all other purchases
• Redeem in $20 increments

The Discover More card makes a very poor general use credit card because of its tiered cash back structure. Your first $3,000 in purchases earns only a 0.25% rebate. In addition, purchases made at warehouse clubs and discount stores also earn only 0.25%. Otherwise, you’ll earn 1% cash back on purchases after you’ve spent $3,000 in a year.

However, it often features promotions that can make it a worthwhile card to have. Discover pioneered the concept of rotating bonus spending categories that other issuers now copy. Currently, Discover is offering a 5% cashback bonus on up to $800 in purchases on airlines, car rentals, hotels, cruises and restaurants and 5% on up to $200 in purchases at grocery stores and drugstores. From April through June, the 5% bonus categories (on up to $400 in spending) will be home improvement, department and clothing stores.

In addition, you can get bonus cash back at select merchants when you use ShopDiscover, often much higher than similar shopping portal sites. Discover also features redemption options that increase the value of your rewards when redeemed at select merchants for gift cards or instant eCertificates. For instance, you can turn $20 in rewards into a $25 gift card.

A final word
It’s good to remember that cash back cards are only valuable for consumers who pay their balance in full every month. If you carry a balance, you are better off finding a low-interest rate card, since the interest you are paying will more than offset any cash back you might receive.

Editor’s note: For historical versions of this list, see Best Cash Back Credit Cards – 2010.