Looking at cash back credit cards? Good idea. I think they are the only way to go.
Here’s a quick two-minute explanation of the various cash back cards. They might be my favorite card, but some people prefer getting free hotel stays, free flights. etc. While those types of cards offer interesting options, I’d still rather have the cash back.
Did you know that there’s more than one type of cash back card? Here’s a video which explains the various types of such cards and offers examples, like the Capital One card with its 1.5% cash back on everything.
Best cash back credit cards
NerdWallet offers a nice details on several cash back cards that they recommend. Their recommendation for everyday spending is one of the cards highlighted in the video, the Blue Cash Preferred® Card from American Express.
This card is for people with a good-to-excellent credit score, at least 690. For this (and all other cards that they review) they highlight the benefits:
This card’s 6% cash back rate at supermarkets (up to $6,000 a year in spending) makes it a longtime favorite with the Nerds, as does its unlimited 3% rate at gas stations and department stores. All other purchases earn an unlimited 1% back. By buying gift cards at the supermarket and using them at restaurants, retailers and other merchants, you can extend the 6% cash back far beyond just groceries. The sign-up bonus also adds to the appeal — and you may be eligible for an even better offer from American Express. Check out our American Express Pre-Qualified Offers page. – See more at: https://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-cash-back-credit-cards/#sthash.ObA9mq9P.dpuf
The drawbacks, and this card with its $95 fee, has a big drawback. It’s basically for people who have the confidence that they will use the card regularly. They indicate how the $95 fee might be substantial, but the fee can easily be mitigated simply by spending $31 a week at the supermarket given that you get 6% back on groceries:
The annual fee is high for a cash back card, but if you spend at least $31 a week at the supermarket, the cash back will offset it. Because this card is an American Express, you may have trouble using it in some places. – See more at: https://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-cash-back-credit-cards/#sthash.ObA9mq9P.dpuf
For more info on this and all other cards — cash back or otherwise — go to NerdWallet
image credit: Images Money