Million Mile Secrets reader, Travis, emailed:
I’m not sure if you look much into non-travel credit cards, but I’d like you to recommend a credit card for cash back. I’m really trying to pinch pennies right now and thought that might be a good way to get a little extra cash. I’ve also got a trip in the books to the Dominican Republic using Southwest and Starwood points! Hope you have a good day.
Sometimes it makes more sense for folks to earn cash back instead of earning points and miles. Remember, it’s all about your individual travel goals!
I Prefer Miles & Points, but Some Folks Love Cash Back!
Cash back cards can give you great flexibility, because you’re not locked-in to redeeming rewards with specific airlines or hotels.
Let’s see which cards are best for cash back!
My Favorite Cash Back Cards
Link: Hot Deals
Cash back cards are a great place to start if you are new to Big Travel with Small Money and want simplicity. No award charts to fuss with!
I’m listing the best cash back cards open to everyone. For those of y’all with a small business, I really like the AMEX SimplyCash and Chase Ink Cash. You can see other small business cards here.
The best cash back card for you depends on your spending habits. Here are 5 of my favorites.
1. Chase Freedom
Link: Chase Freedom
Link: My Review of the Chase Freedom
The sign-up bonus on the Chase Freedom is $150 (15,000 Chase Ultimate Rewards points) after you spend $500 on purchases in the 1st 3 months of opening your account.
And you’ll earn $25 (2,500 Chase Ultimate Rewards points) for adding an authorized user who makes a purchase within the same 3-month period.
That’s a fairly easy $175 that Travis can put towards his savings!
Travis can earn 5X Chase Ultimate Rewards points per $1 (5% cash back) on up to $1,500 in spending in rotating categories each quarter when he activates the bonus.
If he spends the full $1,500 in bonus categories, he’ll earn another $75 (5X points x $1,500 x 1 cent per point) each quarter in cash back. That’s $300 per year!
The Chase Freedom card is a flexible option because it earns Chase Ultimate Rewards points. If you also have a Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold (no longer available) card, you can transfer points from the Chase Freedom to terrific travel partners like United Airlines and Hyatt for Big Travel.
Transferring to travel partners is how I like to get Big Travel. Because the points are worth more that way.
You Can Transfer the Chase Ultimate Rewards Points You Earn With the Chase Freedom to Your Chase Sapphire Preferred, Chase Ink Plus, or Chase Ink Bold and Then to Travel Partners
I’ve kept this card for a long time because there’s no annual fee!
This card charges 3% in foreign transaction fees. So it’s NOT a good option for Travis to use on his trip to the Dominican Republic.
2. Citi Double Cash
Link: Citi Double Cash
Link: My Review of the Citi Double Cash
With the Citi Double Cash card, Travis can earn cash back twice! He’ll earn 1% when he makes a purchase and another 1% when he pays it off.
This card does NOT have a sign-up bonus, but there’s no annual fee. So it’s a great card to keep forever and help boost your credit score.
Because there are no limits on rewards or category restrictions, this is a good card to use for almost any purchase. It’s also an easy option if you don’t want or don’t have the time to track category spending.
Busy Folks Who Don’t Want to Keep Track of Bonus Categories Might Like the Citi Double Cash – but There’s NO Sign-Up Bonus
Sometimes convenience is worth more than getting the highest rate of return on your spending!
There’s a 3% foreign transaction fee on this card, so this is NOT a good card for Travis to use on his trip to the Dominican Republic.
3. Fidelity Rewards Visa Signature Card
Link: Fidelity Rewards Visa Signature Card
The Fidelity Rewards Visa Signature card offers 2% cash back on all purchases with no limits on rewards. There is NO sign-up bonus, but there isn’t an annual fee either.
This would be a great card for Travis to use for his everyday spending. But there’s a catch. You need an eligible Fidelity investment account to earn the full 2% back.
Want to Invest Your Cash Back? The Fidelity Investment Rewards Visa Might Be a Good Pick!
That said, you’ll earn interest on your deposits, so in the long-term this could make your cash back even more valuable.
If Travis has (or opens) a qualifying Fidelity account, he can set up his card to automatically deposit his 2% cash back into that account. If he uses his Fidelity Rewards points for anything else like gift cards, statement credits, or travel, he won’t be guaranteed the full 2% back.
This card charges a 1% foreign transaction fee, so it’s NOT best card for Travis to use on his trip to the Dominican Republic.
4. Discover it
Link: Discover it
With no annual fee and a $50 bonus after your 1st purchase within the 1st 3 months of opening your account, the Discover it is another good cash back option.
It offers 5% cash back on up to $1,500 in purchases in bonus categories that change each quarter. And 1% cash back on everything else.
New cardholders (or folks who previously registered) will have their cash back doubled at the end of 12 billing cycles.
This quarter, from January 2016 through March 2016, Travis could earn 5% back on up to $1,500 in purchases at gas stations and on ground transportation. Don’t forget to activate the bonus!
Hitting the Road? Earn 5% Cash Back This Quarter With the Discover it at Gas Stations and on Ground Transportation
That’s great news considering many folks spend lots of money on gas or ground transportation! This means Travis could earn up to $75 in cash back just for driving back and forth to work!
It’s also a card Travis could use in the Dominican Republic because there are NO foreign transaction fees.
5. Discover it Miles
Link: Discover it Miles
Link: My Review of the Discover it Miles
Although not technically a cash back card, the Discover it Miles card would offer Travis some flexibility in how he chooses to use his rewards.
Unlike other cash back cards that have rotating categories, the Discover it Miles card offers 1.5 miles (1.5% back) per $1 you spend on all purchases. There’s no limit on how much you can earn.
Plus, they’ll double the miles you earned after 12 months. So you’ll effectively earn 3 miles per $1 (3% back) in your 1st year.
However, there is NO sign-up bonus.
Redeem Miles for Paid Travel – or Cash Them Out! You Choose With the Discover it Miles Card
Travis could redeem these miles for statement credits towards paid travel. Or cash them out to boost his savings!
With NO foreign transaction fees, this would be a great card for Travis to use on his upcoming trip to the Dominican Republic.
Bottom Line
Earning cash back on everyday spending is a great goal if you like simplicity. You can use the extra money for anything from a meal at a nice restaurant to saving towards your next travel adventure!
My favorite is the Chase Freedom card because of the improved sign-up bonus and terrific 5X points (5% cash back) rotating quarterly bonus categories. And it has NO annual fee.
Some folks might prefer the Citi Double Cash or Fidelity Rewards Visa card if they don’t want to worry about bonus categories. Or the Discover it and Discover it Miles cards for no foreign transaction fees.
Thanks for your question, Travis. And enjoy your trip to the Dominican Republic!
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