Welcome to the Points Pro, where I answer your credit cards and travel rewards questions each week. If you have a question you’d like answered, you can submit it here.
This week, CNBC Select reader Al asks:
What card earns the most cash back?
(This question has been edited for clarity and brevity.)
It’s nearly impossible to determine which credit card definitively earns the most cash back. This is because so much depends on the individual; how much you spend and the categories of those purchases can change how much cash back you earn.
When you open a new cash-back credit card, there are typically two main ways you earn cash back: the welcome bonus and the rewards you earn from purchases. Here’s how to compare those features so you can choose the card that will earn you the most cash back.
What card earns the highest cash back?
Cash welcome bonuses
Virtually all of the top rewards credit cards offer an upfront bonus you can earn after you’re approved and meet the bonus requirements. You’ll usually need to spend a certain amount within a limited timeframe.
When considering intro bonuses, it’s important to have an idea of how much you normally spend per month on credit cards. You should only apply for cards with welcome bonuses you can qualify for without stretching your budget.
I value welcome bonuses in two ways: total value and return on the minimum spending. Certain business credit cards have absolutely huge welcome bonuses with equally massive spending requirements. Those spending requirements dramatically change the math for me.
For example, the Capital One Spark Cash Plus offers the opportunity to earn a $2,000 cash bonus after spending $30,000 in the first three months of account opening, plus a $500 Capital One Business Travel credit once you spend $30,000 in the first three months. Even if your business normally spends $10,000+ a month on credit cards, that’s just over an 8% bonus return on the minimum spending requirement.
The Capital One Spark Cash Plus is especially rewarding for businesses with a lot of credit card spending. It offers an additional bonus the first year and an ongoing annual fee refund, but both benefits have six-figure spending requirements.
- High flat-rate rewards
- Valuable welcome offer
- Has an annual fee
- High spending requirement to earn the welcome offer and qualify for the annual fee refund
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn a one-time cash bonus of $2,000 plus for a limited time, earn a $500 Capital One Business Travel credit once you spend $30,000 in the first 3 months
- Earn an additional $2,000 cash bonus for every $500K spent during the first year. You can earn this bonus multiple times over the course of year 1!
- Earn unlimited 2% cash back on every purchase, everywhere—with no limits or category restrictions
- Enjoy big purchasing power so you can spend more and earn more rewards. The Spark Cash Plus card has no preset spending limit, so it can adapt to your needs based on your spending behavior, payment history, credit profile and other factors
- Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Business Travel
- Streamline your accounts payable process, employee spending, and more from your online account with free business management tools
- Empower your teams to make business purchases while you earn rewards from their transactions with free employee and virtual cards
- $150 annual fee – Spend $150,000 annually and Capital One will refund this fee every year
- Your card is designed to be paid in full. However you have the option to carry over a portion of your balance with interest if needed. Pay at least the minimum payment amount by your payment due date, otherwise you’ll be charged a 2.99% late fee
- For businesses that need large spending capacity and want to maximize cash back
- Top rated mobile app
If I were looking for a business card, I would prefer the CapitalOneSpark Cash‘s limited-time offer of a $1,000 cash bonus and a $250 Capital One Travel credit after spending $10,000 in the first three months over the Spark Cash Plus card’s offer. That’s a 12.5% return on the $10,000 spending requirement. Anytime you can get a double-digit return, that’s a strong bonus.
The Capital One Spark Cash is a strong business cash-back card. With a high flat-rate return on purchases you can rest assured that you’re earning a strong return without needing to juggle special rewards categories.
- High flat-rate rewards
- Valuable welcome offer
- No foreign transaction fees
- Has an annual fee
- High spending requirement to earn the welcome offer
Small welcome bonuses can provide an even higher return. The Capital One Savor Cash Rewards Credit Card currently has an all-time high limited-time offer of $250 cash back after spending $500 on purchases in the first three months from account opening. It is a much smaller bonus, but you’re earning a 50% return on the $500 you spend to earn the bonus.
The Capital One Savor Cash Rewards Credit Card is one of the most rewarding options for earning cash back in categories such as entertainment and dining without paying an annual fee. Plus, you can combine its rewards with Capital One’s travel cards to convert them into transferable miles.
- One of the most rewarding cash back cards for entertainment and streaming services
- No annual fee
- Easy-to-earn welcome bonus
- High APR
- Requires a good to excellent credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- For a limited time, earn a one-time $250 cash bonus once you spend $500 on purchases within the first 3 months from account opening
- $0 annual fee and no foreign transaction fees
- Earn unlimited 3% cash back at grocery stores (excluding superstores like Walmart® and Target®), on dining, entertainment and popular streaming services, plus 1% on all other purchases
- Earn 8% cash back on Capital One Entertainment purchases
- Earn unlimited 5% cash back on hotels, vacation rentals and rental cars booked through Capital One Travel
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won’t expire for the life of the account and there’s no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 12 months; 18.74% – 28.74% variable APR after that; balance transfer fee applies
- Top rated mobile app
Balance transfer fee
Introductory fee of3%of the amount of each transferred balance that posts to your account during the first 12 months that your account is open. After that,4%of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you at any other time.
Picking a welcome offer comes down to finding the balance that works for you. If you want to apply for multiple cards a year, smaller bonuses that have a higher percentage return on the minimum spending may make sense. But if you only want to open one card a year, or only want one card in total, applying for a card that meets your needs and has the biggest bonus (that you can qualify for) can be a good idea.
Cash rewards from spending
With rewards credit cards, a good baseline return on your spending is 2% cash back or 2X miles/points with no annual fee. Based on the fee card issuers earn per transaction, this is the highest flat-rate return you can reasonably expect without meeting additional requirements.
Some cards earn slightly higher rewards, but there are hoops to jump through. The U.S. Bank Smartly™ Visa Signature® Card earns 2% cash back on every purchase. You can earn up to an additional 2% cash back on the first $10,000 in eligible net purchases each billing cycle. That’s an incredible 4% return, but there are additional requirements to meet before you can earn the bonus return. You’ll need to have a U.S. Bank Smartly® Savings account and qualifying balances in U.S. Bank Smartly® Checking and/or Safe Debit accounts. There are three rewards tiers based on your qualifying balances:
- $10,000 to $49,999 unlocks 2.5% total cash back on all purchases
- $50,000 to $99,999 unlocks 3% total cash back on all purchases
- $100,000 or more unlocks 4% total cash back on all purchases
Combined balances are based on the average daily balance of the previous three months. If you’re a U.S. Bank customer, this is an interesting opportunity, but you’ll want to compare the tradeoffs. The U.S. Bank Smartly Checking account has an extremely low interest rate, and the Safe Debit account doesn’t earn interest and has an unwaivable $4.95 monthly fee.
You can earn more rewards in specific categories, but the highest returns tend to have caps or are associated with cards that have annual fees. If you want a card that earns more on gas, dining or groceries, that can be a good idea, but I suggest pairing it with a 2% cash-back card so you’re not missing out on rewards for other purchases.
There are plenty of good no-annual-fee cards that earn bonus cash back, like the Capital One Savor (mentioned above) and the Blue Cash Everyday® Card from American Express (see rates and fees). The Blue Cash Everyday earns 3% cash back* at U.S. supermarkets, U.S. online retail purchases and U.S. gas stations, but you only earn bonus rewards on up to $6,000 in eligible purchases per category each year (then 1% back).
*Cash back is earned in the form of Reward Dollars that can be redeemed as a statement credit.
Keep it simple with 2% back everywhere
Anyone who wants to keep it simple has plenty of options for earning 2% cash back on all purchases without an annual fee.
I love the Citi Double Cash® Card due to its transferable Citi ThankYou® points and intro APR offer, but for most people, the difference between this card and other 2% cash-back cards is small. The flat-rate cash-back card you prefer may simply be the card issued by the bank where you already have a checking or savings account.
What makes the Citi Double Cash® Card special is that it sits near the top of its class in several categories. It is an excellent option if you want flat-rate rewards, a balance transfer intro-APR or no annual fee.
- Balance transfers get a long intro APR
- Generous flat-rate cash-back rewards structure
- Earns transferable rewards
- No annual fee
- It has a foreign transaction fee
- Intro APR only applies to balance transfer
- Points transfer ratios are reduced compared to premium cards
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 17.49% – 27.49%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
Balance transfer fee
There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
Foreign transaction fee
Here are a few other 2% cash-back cards to consider with no annual fee and interesting perks:
The Wells Fargo Active Cash® Card is great if you want simplicity thanks to its flat-rate 2% unlimited cash rewards on purchases and $0 annual fee.
- High, unlimited flat-rate return on purchases
- Intro APR on purchases and qualifying balance transfers
- Lower introductory balance transfer fee
- Up to $600 of cell phone protection against damage or theft (subject to a $25 deductible)
- Charges a 3% foreign transaction fee
- Balance transfer fee increases to 5% of each transfer (minimum $5) after 120 days
- Limited redemption options unless you pair it with a Wells Fargo card that allows point transfers
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 18.49%, 24.49%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft.Subject to a $25 deductible.
Balance Transfer Fee
3% intro for 120 days from account opening, then up to 5%, min: $5
Foreign Transaction Fee
If these cards don’t appeal to you, check with local or regional credit unions. Many credit card unions offer strong flat-rate rewards cards to their members.
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For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.
Information about the Signify Business Cash℠ Card by Wells Fargo has been collected independently by CNBC Select and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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