Editor’s Pick: Best Cash Back Credit Cards 2010
By Eva Norlyk Smith, Ph.D.
June 3, 2010
Using a cash back credit card for all expenditures can save cardholders from 1 to 5 percent on all purchases and bills. For the frugally minded, over time, those little pennies saved can add up to a decent sum of dollars earned. The best cash back strategy is often to use a couple of cash back credit cards to optimize returns. Here is an overview of the best cash back credit cards for 2010.
Capital One Venture Rewards Credit Card and Capital One’s VentureOne Rewards Credit Card. While the Capital One Venture cards technically speaking are travel rewards credit cards, rewards earnings can be redeemed for cash back credit as well in the form of a statement credit. The Capital One VentureOne is the no-annual-fee version of the Capital One Venture line of cards; it offers 1.25 points per dollar spent, redeemable for the equivalent of 1.25 percent cash back.
For an annual fee of $59 annual (waived the first year), you can up rewards earnings to 2 points per dollar spent, the equivalent of 2 percent cash back, with the Capital One Venture Card. For people who charge well over $10,000 a year, the annual fee is well worth it in the extra cash back earnings. In addition, new cardholders get 10,000 bonus miles if they spend $1,000 within the first 3 months; at the equivalent of a $100 cash back bonus this more than pays for the first year’s annual fee.
Chase Freedom MasterCard. With a rotating 5 percent cash back in different categories which change every quarter, the Chase Freedom cash back card is Chase’s bid to take over some of the market share held by the Discover More cash back cards. If you plan purchases ahead, you can get a full 5 percent cash back in rotating categories like clothing, home improvement, travel purchases, and grocery and department store purchases. The categories receiving the cash back are posted on Chase’s web site and, for the most part, repeat every year.
In addition, the Chase Freedom card offers 1 percent cash back on all other purchases, a feature which makes it a more attractive option than the Discover More cash back credit cards, which currently limits cash back earnings on the first $3,000 in charges to 0.25 percent. The Chase Freedom Cards gives an addition 1 percent rebate on airfare purchases made through the card’s online booking tool.
PenFed Visa Platinum Cashback Rewards Card. The Pen Fed Visa cash back card features one of the highest average cash back earnings in the industry. Cardholders get a premium cash back of 5 percent on gas, 2 percent on supermarket purchases, and1.25 percent cash back on all other purchases. Cash back earnings are automatically credited to cardholder’s account every statement, so no need to hassle with redeeming rewards.
The PenFed Visa Cash Back Rewards card features a lower APR than most rewards credit cards, currently at 13.99 percent. Keep in mind, however, that any balance carried forward will quickly undermine rewards earnings; even for cards with a low APR.
The one drawback of the Pen Fed Cash Back Rewards card is that you have to be a member of the Pentagon Federal Credit Union to apply for the credit card. It’s fairly easy to join, however, anyone who fulfills any of the following criteria can become a member: government employees, members of the U.S. Military and Uniformed Services, employees or volunteers of the American Red Cross, or family members/housemates of current PenFed members. If none of these fit, consider becoming a civilian member of the National Military Family Association. The $20 annual membership qualifies you to join the Pentagon Federal Credit Union as well as for discounts on numerous other products and services.
There are several other cash back credit cards offering very competitive cash back earnings, however, they are most suitable for people already customers of the affiliate card issuer. For Fidelity customers, the Fidelity Rewards American Express Card gives users 2 percent cash back on charges, which is automatically deposited into the cardholders Fidelity IRA or Fidelity 529 account. Likewise, for frequent Costco shoppers, the American Express Costco TrueEarnings card gives cardholders 3 percent cash back for gas and restaurant charges, 2 percent cash back on travel-related purchases, and 1 percent cash on other purchases.