Choosing the Best Rewards Credit Cards

Rewards credit cards can be a good way of earning rebates to help pay for college and repay student loans.

Student access to credit cards was limited by the Credit CARD Act of 2009, which requires consumers under age 21 to either have an independent means of repaying the debt or a cosigner who is age 21 or older. But parents can still use rewards cards to earn rebates prior to the student’s enrollment in college, and both students and parents can obtain rewards cards after graduation to help repay student loan debt.

Student credit cards, which are designed to satisfy the needs of college students and recent college graduates, do not necessarily offer the best cash back rewards.

Types of Rewards Credit Cards

There are several types of rewards credit cards:

  • Cash back credit cards provide cash rewards which can be applied as a statement credit or mailed as a check to the cardholder.
  • Travel rewards credit cards let cardholders earn airline miles. Some are credit cards co-branded with the airline. Others are independent of any specific airline.
  • Points rewards credit cards let the cardholder earn points that can be redeemed for merchandise. The points may be redeemable for gift cards that can be used instead of cash at popular stores.

Best Strategies for Using Credit Cards

It is very easy to get into trouble with credit cards, since paying with plastic feels the same whether you spend $5 or $500. There are a few key principles that should guide the proper use of credit cards:

  • Pay off the bill in full every month. Don’t charge more than you can afford to repay each month. Otherwise, you are spending beyond your means. If you always pay off the debt in full, interest rates don’t matter.
  • Never pay an annual fee. Cardholders are unlikely to earn enough rewards to compensate for the cost of the annual fee. There are many fee-free rewards cards that provide a better financial return.
  • Sign up for auto-debit. Most credit cards let the cardholder set up an automatic monthly transfer from the cardholder’s bank account. Arrange to always pay the full statement balance due by the due date.

If you stick to these principles, there’s no downside to running all your purchases through the rewards card. No interest will be charged because you are paying off the bill in full each month. As an added benefit, this strategy consolidates multiple credit card purchases into a single bill and helps to build a high credit score.

The Best Cash Back Rewards Credit Cards

When comparing rewards cards, calculate the cash equivalent value of the rewards as a percentage of spending.

This table shows several popular no-fee cash back rewards cards, sorted by the uncapped baseline (minimum) cash equivalent reward.

Credit Card
Baseline
Rewards
Comments
Citi Double Cash Card 2%
  • 2% cash back (1% when buy, 1% when pay)
  • No category restrictions
  • No caps on cash rewards
  • Award redemption is not automatic
  • Redemption in $25 increments
  • Rewards expire after 12 months without any purchases
Fidelity Investment Rewards American Express Card (FIA Card Services) 2%
  • 2% cash back on all purchases
  • No cap on cash rewards
  • No category restrictions
  • Unredeemed points expire after 5 years
  • Option of automatic cash redemption ($50 minimum)
Capital One Quicksilver Rewards 1.5%  
  • 1.5% on all purchases
  • One-time $100 cash back bonus for $500 in purchases within the first 3 months
 
  • No cap on cash rewards
  • No category restrictions
  • No category enrollment requirement
  • Rewards do not expire as long as account is open
Fidelity Investment Rewards Visa Signature Card (FIA Card Services)  1.5%
  • 1.5% cash back on first $15,000 in purchases per year
  • 2.0% cash back beyond the first $15,000 in purchases per year 
  • No cap on cash rewards
  • No category restrictions
  • Unredeemed points expire after 5 years
  • Option of automatic cash redemption ($50 minimum) 
BB&T Spectrum Rewards Card   1.05% 
  • 3% during the first 90 days
  • 1% all other purchases
  • 5% anniversary bonus on cash earned every year
  • 30% additional anniversary bonus on cash earned when spending $50,000 or more annually
 
Amazon.com Rewards Visa Card from Chase  1%
  • 3% at Amazon.com
  • 2% at gas stations, restaurants, drugstores
  • 1% all other purchases
  • $70 amazon gift card upon approval 
  • Rewards do not expire as long as account is open 
BankAmericard Cash Rewards 1%
  • 3% on gas
  • 2% on grocery stores
  • 1% all other purchases
  • One-time $100 cash back bonus for $500 in purchases within the first 90 days 
  • Higher rewards for gas and grocery purchases capped at $1,500 in purchases each quarter
  • No cap on 1% cash rewards
  • Rewards do not expire as long as account is open 
Blue Cash Everyday Card from American Express  1%
  • 3% on grocery stores
  • 2% on gas stations and department stores
  • 1% all other purchases
  • One-time $100 statement credit for $1,000 in purchases within the first 3 months 
  • Higher rewards for grocery purchases capped at $6,000 in purchases per year
  • No category enrollment requirement
Chase Freedom  1% 
  • 5% cash back in categories that rotate each quarter
  • 1% on all purchases
  • One-time $100 cash back bonus for $500 in purchases within the first 3 months
  • Must enroll in 5% cash back categories
  • 5% cash back categories limited to $1,500 in spending each quarter
  • No cap on 1% cash rewards
  • Rewards do not expire as long as account is open 
Discover Card  1%
  • 5% cash back in categories that rotate each quarter
  • 1% all other purchases
  • Double cash back first year
  • Must enroll in 5% cash back categories
  • Award redemption is not automatic
  • Rewards do not expire as long as account is open
Fifth Third Bank Cash Rewards MasterCard 1% 
  • 2% on gas and grocery store purchases
  • 1% all other purchases
  • Higher rewards for gas and grocery purchases capped at $1,500 in combined purchases each quarter 
U.S. Bank Cash+ Visa Signature Card 1%
  • 5% on two categories you choose
  • 2% on your choice of one everyday category (like gas or groceries)
  • 1% all other purchases
  • 5% cash back capped at first $2,000 in combined purchases each quarter
  • 1% cash rewards are unlimited
  • Rewards do not expire as long as account is open
Upromise MasterCard (Barclayscard) 1% 
  • 5% online shopping and travel, restaurants
  • 2% department stores and movie theaters
  • 1% all other purchases
  • One-time $50 cash back bonus for purchases within the first 90 days 
  • Rewards may be swept into a 529 college savings plan before college and used to repay student loans after graduation
  • Award redemption is automatic
  • Rewards do not expire as long as account is open
Wells Fargo Cash Back College Visa Card 1%
  • 3% on gas, grocery and drugstore purchases during the first 6 months
  • 1% all other purchases 
  • Redemption in $25 increments
Zions Bank AmaZing Cash Credit Card 1%
  • 2% during the first 90 days
  • 1% all other purchases
  • Annual cash bonus worth up to 25% of the cash back
  • Redemption in $25 increments
PayPal Extras MasterCard (Synchrony Bank) 0.8% 
  • 3x points on gas and restaurants
  • 2x points on eBay and PayPal purchases
  • 1x points all other purchases
  • Reward points may be redeemed for cash back into the PayPal balance at a rate of 6,000 points for $50 cash back (e.g., 3x points is the equivalent of 2.5% cash back)
  • 50,000 annual limit on points accumulation
  • Points expire after 12 months without any purchases
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