Best in Show – Rewards Cards with Top Cash Back Earning Rates

1. Chase Freedom

Chase Freedom gives you 5% cash back on specific categories that rotate every 3 months. This high earn rate endures on up to $1,500 worth of combined purchases on each quarter’s categories. Categories for 2014:

• Dec 15 – Mar 14: Gas Stations, Movie Theaters and Starbucks
• Mar 15 – Jun 14: Restaurants and Lowe’s Home Improvement Stores
• Jun 15 – Sept 14: Gas Stations and Kohl’s
• Sept 15 – Dec 14: Amazon.com, Zappos.com and Select Department Stores

Purchases that exceed the quarterly $1,500 limit and all other purchases outside of the select categories earn an unlimited 1% cash back. You must sign up each quarter. Chase charges no annual fee for this card.

Note that although this is a cash back card, the rewards are tracked as points. Each point is equal to 1 cent. You must have at least 2,000 points to redeem your cash, which is equal to $20. Your cash back points appear on your statement in a Rewards Summary section. Chase claims that your rewards typically appear on the same statement charging you for the purchases that earned the rewards.

2. Blue Cash Preferred Card from American Express

This top-rated card offers higher than average cash back rates on select purchasing categories without the quarterly restrictions. Earn 6% cash back on up to $6,000 on your U.S. supermarket purchases each year and 3% cash back on all of your annual U.S. department store and U.S. gas station purchases. Since groceries and gas are extremely common expenditures for most consumers, these rewards set this card apart. However, it does come with a price – a $75 annual fee.

With a max earning potential of $360 cash back on your grocery purchases and even more on your gas and department store spending, it’s still a very good deal for cash back. Bear in mind that max rewards on groceries only applies if you spend an average of $500 a month at U.S. supermarkets. You receive your cash back rewards as Rewards Dollars that can be redeemed as a statement credit. American Express also reserves the right to offer other redemption options at their discretion, such as merchandise or gift cards. You must have a minimum of $25 in Rewards Dollars in order to redeem your rewards, and can only redeem in $25 increments.

3. Discover Cards

Discover It offers 5% cash back rewards on rotating purchase categories. These purchases are capped at a combined total of $1,500 each quarter. If your purchases exceed this amount, you revert to a 1% rate for the duration on all additional purchases. You must enroll each quarter. This year’s categories:

• Jan – Mar: Restaurants and movies
• Apr – Jun: Home Improvement Stores, Furniture Stores and Bed, Bath & Beyond
• Jul – Sept: Gas Stations
• Oct – Dec: Online shopping and department stores

Discover It Chrome doesn’t offer rotating categories, but does set quarterly caps. This card pays 2% cash back on your purchases at gas stations and restaurants throughout the year, and sets a quarterly, $1,000 cap on these purchases. All other purchases, including those that exceed the $1,000 cap each quarter earn 1% cash back.

Discover Cards also offer great savings on purchases you make year round with select retailers through their online mall ShopDiscover, allowing you to earn between 5% and 20% cash back on eligible purchases. Neither card charges an annual fee. Bear in mind that Discover has limited acceptance with merchants. Though citing the February 2013 Nilson Report, Discover claims the cards are accepted at 9 million merchants nationwide. Additionally, you must sign up for their rotating categories each quarter or you will lose out on their 5% earnings bonanza.

Discover offers several redemption options for your Cashback Bonus and sets no minimum thresholds or increments for redemption. You can redeem as much or as little as you want, whenever you want. Choose from partner merchant gift card purchases, shopping on Amazon.com, Discover gift cards, charitable donations, statement credits or electronic deposit into your bank account.

4. Capital One Quicksilver Cash Rewards Credit Card

This card boasts no hassle cash back and bumps the earn rate up to 1.5%. There’s no special spending categories, no quarterly rotations, no sign-ups and no annual fee. Your cash back rewards are unlimited. Money Magazine awarded this cash back card as winner of a Best Rewards credit card in October 2013.

This is another card that lets you redeem your awards in any amount you choose. Redemption options include a statement credit, check or gift card.

5. Citi Dividend Platinum Select Visa Card

This is another rotating purchasing category card offering 5% cash back on specific quarterly categories. Enrollment is required. Categories for 2014:

• Jan – Mar: Zappos, Fitness Clubs, Drugstores
• Apr – Jun: Home Furnishings, and Home & Garden Stores
• Jul – Sept: Hilton, Car Rentals and Theme Parks
• Oct – Dec: Holiday Shopping TBA

Rather than limit the purchasing amount for which you can earn the max return rate, Citi caps all of your cash back rewards at $300 per calendar year. This includes the 1% cash back you earn on other purchases and cash advances. The card also offers $5 cash back on balance transfer transactions of at least $1,500. There is no annual fee.

You can increase the amount of rewards you earn for online purchases by shopping at the issuer’s Citi Bonus Cash Center, with the potential of earning between 1% and 25% cash back. The Dividend Dollars you earn through this online center are unlimited until you earn $300 through Non-Citi Bonus Cash Center purchases. Citi sets a minimum threshold of $50 in order to redeem your awards. Your sole redemption offer is $50 checks.

Further Research

This short list is just a sampling of some of the more popular cash back cards that offer a better than 1% cash back earning rate. There are many websites that allow you to search for cards based upon their most important features. You can use these tools to compare a wide selection of cash back cards to learn which ones best meet your needs.