Cash in on these rewards.
Almost half (49%) of American adults now have at least one cash-back credit card, up from 43% last year, according to a CreditCards.com report released this week. “There is definitely a trend towards more cash back cards. Airline and hotel cards are getting a bit less lucrative, there are a lot of hoops to jump though and there have been a lot of devaluations in terms of points and miles,” says Ted Rossman, an industry analyst for CreditCards.com. “A lot of people have turned to cash back cards because they are simple and universal.”
And the simplest cash back cards of all? Those that offer a flat rate for cash back — no rotating or select categories for rewards you have to keep track of. “I recommend these for whoever wants a great value without the hassle,” says Odysseas Papadimitriou, the CEO of personal finance site Wallethub. He adds that while you can sometimes get more value with rotating categories, which may offer 5% back on certain categories at certain times, “the amount of effort required for most people is not worth it, and the more cards you open the more you have to manage.”
With that in mind, MarketWatch asked credit card experts what the best cash back card offers they’re seeing right now are that don’t have rotating categories or just give good rates on certain categories, and offer very high rates of cash back. The average for a cash back card is a little over 1%, and 2% is considered a very good rate of cash back, says Papadimitriou; some of the cards that experts highlighted have 3% back, though there are catches.
“The 3% back trend is a newer phenomenon,” says Dana Marineau, the vice president of Credit Karma and a financial advocate. “The offers are good as long as you’re being thoughtful about your regular spending habits and you’re not spending more than you need to just to get rewards.” (Remember: You typically must pay your balance in full and on time to make these cash rewards worth your while.) Here are some picks by experts for the best flat-rate cash-back cards.
Though many people have never heard of this card, it offers 3% cash back on all purchases in the first year and 2.5% cash back after that. That 2.5% is “higher than anything I have seen after the first year,” says Papadimitriou. “On a cash back card, I can’t recall ever seeing more than 2% on everything [after the first year] that wasn’t just a bonus offer.”
The catch: There’s a $99 annual fee (it’s waived in the first year). Rossman, who also highlights this card as being a good cash-back card, says that means this offer is best for big spenders. “You need to spend at least $20,000 [a year] on the card to come out ahead.” (You also have to be an Alliant Credit Union member: “While some people can join Alliant Credit Union for free, many have to pay a one-time $5 fee,” Rossman adds.)
These cards don’t offer an ongoing 2.5%, but they’re among the best initial cash-back offers on all purchases out there, experts say.
This card also offers 3% cash back, but that’s only good for the first year and on up to $20,000 in spending; after that you get 1.5% back. However it does not have an annual fee and offers 0% on purchases and balance transfers for 15 months.
You get 3% cash back on all purchases up to $10,000 in the first year, after that 1.5%. You also get a 10% bonus on all cash rewards earned each year. “That makes the effective rewards rate 3.3% in the first year up to the $10,000 spending cap and 1.65% thereafter,” Nerdwallet — which put this on its best cards of July 2019 list — notes.
Don’t feel like worrying about when your 3% offer ends? This popular card — which Rossman likes because of its simplicity and high rewards rate — gives 2% cash back on everything without limits. “When you make a purchase, you’ll earn 1% unlimited cash back. Then, you earn an additional 1% cash back as you make payments for that purchase,” Chase writes. Plus, there’s no annual fee on this card.