Don’t Be Fooled By Introductory Cash Back Rewards

Starting Out Right – Rewards Cards with the Highest Introductory Cash Back Rewards Bonuses

1. Blue Cash Preferred Card from American ExpressBlue Cash Preferred gives you $150 cash back for spending $1,000 on purchases within the first three months of opening your account. The reward will be received as a statement credit.

   Continuing cash back can be earned at a rate of 6% for grocery purchases and 3% for gas and department store purchases in the U.S. Once you have spent $6,000 within a year on these categories, the earn rate drops to 1% on these and all other purchases.

2. BankAmericard Cash Rewards Credit CardThis cash back credit card offers you $100 cash back rewards after you have spent $500 in qualifying purchases. To earn this reward, you must apply online and spend $500 on purchases within the first 90 days of opening your account.

   Ongoing rewards earnings aren’t too shabby. You receive 2% cash back on groceries and 3% at gas stations. Eligible purchases in these categories are capped at $1,500 each quarter. Other purchases earn at a 1% rate.If you are a Bank of America banking account customer, you can earn additional rewards by redeeming your cash back into your BOA savings or checking account. This gets you 10% on your deposit.

3. Capital One Quicksilver Cash Rewards Credit Card
4. Quicksilver is another cash back rewards card offering a $100 sign up bonus once you purchase $500 on your card in your first 3 months.

   After your 3 months have passed, you continue earning cash back on purchases at a slightly higher than average earn rate of 1.5%. However, there are no additional incentives or special high cash back rates for any purchasing categories.

5. Chase Freedom
6. This Chase card offers a $100 introductory cash back bonus as well. Like its competitors, you must spend $500 on purchases during the first three months to qualify for your sign on bonus. Chase Freedom gives you the opportunity to earn an additional $25 when you add an authorized user and make a purchase within your first 3 months.

Ongoing cash back rewards are 5% cash back on qualifying purchase categories that change every 3 months. They max out after you spend $1,500 on these select categories during each quarter. You will continue earning 1% on additional purchases in all categories.

On occasion, Chase Freedom offers a time-limited $200 sign-up bonus. Qualifying purchases remain the same – $500 in purchases within the first three months you have your account. You should take advantage of this rarity when you see it, especially with the high ongoing earn rates available to you through the cards rotating categories and the absences of an annual fee. Moreover, you don’t need excellent credit to qualify for this card, so it’s well suited if you’re just building a credit history. Most recently, the doubled signing bonus ran during the month of June 2014.

A Brief Comparison with Some Points/Miles Credit Cards Offering High Introductory Bonuses

Points/Miles rewards cards typically offer far more impressive introductory signing bonuses than cash back cards. Travel cards offer the highest introductory cash back bonuses. As you can see below, with some of these cards, you can also redeem points for cash back, though the points are devalued when you choose this option. Still, if you’re not a traveler, the cash back amounts are very respectable and higher than those normally offered by top cash back rewards cards.
The following are just a few points/miles cards that give you a better than average introductory bonus.

1. Chase Sapphire Preferred Credit Card – 40,000 points worth $500 in travel. You must spend $3,000 in the first three months. Card holders also have the option of redeeming these points for cash, but the value drops to $400 cash back.
2. Barclaycard Arrival Plus World Elite MasterCard – 40,000 points worth $400 for travel expenses after spending $3,000 in the first three months. Like the Sapphire, Barclaycard can also be redeemed for cash back, but the value is cut in half, coming in at $200 cash back.
3. Citi ThankYou Preferred Card – 20,000 points worth $200 in gift cards and other rewards. You need to spend $1,500 within the first three months.
4. Wells Fargo Propel 365 Credit Card American Express – 20,000 points worth $200. You must spend $3,000 in the first three months.

Cashing In

Cash rewards credit cards don’t offer very impressive introductory bonuses. Most are in the $25 range, and a few offer $100 to $150. If you’re lucky, and your timing is right, you may be able to cash in with a higher time-limited offer, like Chase Freedom’s $200 deal. However, normally your cash back rewards are going to be more dependent upon your ongoing spending. In contrast, rewards cards offering points/miles often give you quite notable sign on bonuses for heavy card use in the first three months. And as you can see above, some of these even allow you to redeem your points/miles for cash at a lower valuation. If you are set on a cash back card, consider also applying for a good points/miles rewards card to use in tandem with your cash back card, thus earning the maximize amount of rewards for all of your normal spending, especially if you travel.