The Best Reward Credit Cards You Probably Haven't Heard Of
Reward credit cards may seem like a simple way to generate some extra money, but many consumers don't truly know how to play the game. Cash back cards are certainly not created equally, and everyone's spending habits are different. Whether you pay more for groceries, gas or travel, the seven cards below offer the best opportunities to maximize your spending habits.
Pure Cash Back
Capital One's Quicksilver Card dominated the cash back space for a while -- and who didn't enjoy those Alec Baldwin commercials? -- but the 1.5 percent cash back deal has been dethroned. The Fidelity Investment Rewards American Express Card and Citi Double Cash Card both offer flat 2 percent cash back on all purchases. This card also provides an automatic way to invest in a retirement account, 529 college savings account or brokerage account. There is no annual fee, and you get a $50 bonus if you spend $500 in the first 60 days.
The catch: With Fidelity, customers must have a Fidelity account. This can be a cash management account, which users can link to another checking account to transfer the earned cash back.
Citi Double Cash offers 1 percent cash back on all purchases, and when customers pay their bill on time the cash back doubles. There is also no annual fee for this card.
The catch: Citibank states on its website: "Just make sure to pay at least the minimum due. You don't have to wait until you've paid off a purchase to earn cash back on each payment." But if cardholders don't pay off their purchases in full, the interest owed to Citi on the revolving debt will likely wipe out the value of double cash back.
Got a Gas-Guzzler?
Gas prices may be dropping, but many Americans still fork over a significant amount of money at the pump each month.
The Pentagon Federal Credit Union's Platinum Cash Rewards Visa Plus Card offers 5 percent cash back on gas purchases with no caps, limits or tiers on rewards. There is no annual fee for the Visa Plus Card. Members can elect to get the standard Platinum Cash Rewards Card, which only offers 3 percent cash back at the pump. There is no fee for the first year, but a $25 annual fee on subsequent years.
The catch: The card is only available to the credit union's members. However, anyone can join PenFed credit union with a one-time $15 donation to either Voices for America's Troops or the National Military Family Association. Members will also be asked to make a $5 deposit into a savings account to establish membership. This deposit is refundable should a member elect to terminate the relationship.
If a family spends $3,000 on gas in a year, this card is a simple way to earn $150 in straight cash back, or $135 in year one after the cost to join the credit union.
To qualify for the Visa Plus, members must also have one of the following:
-- Active checking account with direct deposit ($250 minimum)
-- Money market certificate or IRA certificate
-- Mortgage with PenFed
-- Installment loan with PenFed
-- Equity loan or equity line of credit
-- Thrifty credit service
-- Personal line of credit
-- Money Market Savings Accounts
Fill Up Your Belly and Your Wallet
Those who typically spend big in the grocery store should consider adding the Blue Cash Preferred Card from American Express to their credit card line up. The card offers 6 percent cash back on groceries up to $6,000 a year. Blue Cash Preferred also offers 3 percent cash back (with no cap) at gas stations and select department stores. First-time customers will get a $100 statement credit after spending $1,000 in the first three months as well as a free Amazon Prime one-year membership.
The catch: There is a steep annual fee of $75, so users need to ensure the annual fee makes sense for the amount of cash back they'd receive.
For the Frequent Traveler
Separate from cards used to churn miles or points for free airfare, AAA offers a card to maximize money spent on traveling.
The AAA Member Rewards Visa Signature Card offers 3 percent cash back on qualifying travel purchases such as hotels, airfare, cruise lines and car rentals. There is no annual fee, and cardholders do not need to be AAA members.
The catch: There is a lot of fine print on this card, so check to see if your hotels, airlines and car rental companies are included as eligible merchants.
PenFed offers a slightly less restrictive travel card: the Premium Travel Rewards American Express Card. The card offers five points on all airfare purchases and one point on all other purchases.
The catch: This card is really only a good value for frequent fliers.
Want to Carry Just One Card?
Santandar Bravo MasterCard offers triple points on gas, groceries and restaurants, and one point per dollar spent on other purchases. New cardholders earn a $100 bonus after spending $1,000 in the first three months.
The catch: The card caps rewards at $5,000 in purchases each quarter, and there is an annual fee of $49 after the first year.
The Bottom Line: If you want to take advantage of rewards, do it responsibly. Pay credit card bills on time and in full. If you carry over balances, using a rewards credit card is pointless because the interest you pay will ultimately wipe out the cash back earned.
Erin Lowry writes about personal finance and manages social media for MagnifyMoney.com, a site dedicated to helping consumers save money by finding simple, transparent financial products. She is also the founder of the personal finance blog Broke Millennial.
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