Best Credit Cards for Cash Back Rewards

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Nov 3, 2009

Four great credit cards with no annual fees and fantastic rewards with cash back.

Credit cards can be dangerous in the hands of the wrong people. Some should not have them because they treat charge cards as though they were money in the bank.

But for wise and responsible consumers who know that a $500 credit limit is not equal to $500 in the bank, just as the ability to draw a cash advance against one's home equity line is not cash, using a credit card with the ability to gain rewards via cash back can be great.

Before deciding on a card, certain criteria should be covered. Consumers should not get a rewards card that has an annual fee. After all, if the credit card company is going to make money, they'll do it by charging outrageous interest rates, sometimes in excess of 20%, not by collecting annual fees from customers who agree to pay such interest rates during periods when they charge more than they can afford to pay back.

In addition to this, consumers should see if the rewards program is the best for them. Some cards might seem superior in being specialized, like the Amway Global Visa card from MBNA, but further inspection may lead consumers to find that appearances can be deceiving, which is why one card may be better for some, and not for others, while other cards are not very good at all.

For the purposes of finding the best one, four cards (some with optimum rewards) will be discussed.

Discover MotivaSM Card

The Discover MotivaSM Card is very unique compared to other cash back rewards cards. It's features include:

Sometimes being unique is not necessarily the best quality in a credit card, though. The card's first noted benefit is the return of a full month's interest after six payments have been made on time. This means that in order to receive interest in return, card holders are being encouraged to carry a balance, which is a terrible thing to have rewards on since it rewards people to stay in debt while appearing as though it's rewarding good financial management.

The 1% cash back on normal retail purchases is fairly standard and something worthwhile. But the most attractive thing for a very select group of consumers is the third benefit. Those who shop regularly through their online site would find it very worthwhile to have this card since the rewards are so high.

True Earnings Card from Costco and American Express

For Costco customers, the True Earnings card gives benefits right away with other great features as well.

Another great aspect is that this card has an introductory rate of 0% for the first six months.

The fact that a person's first purchase grants them a $25 credit is very attractive, but complementing this is that gas purchases will earn a $90 rebate on the first $3,000 purchased each year. For consumers who travel frequently for business or pleasure, getting money back for purchasing airline tickets can be very attractive, especially for those who get reimbursed by their employer.

The only downside is that the waiver of annual fee applies to Costco customers only. Non-members of Costco will want to search elsewhere for a rewards card, since there are others available.

Discover More Card

The Discover More card is even better than the Discover MotivaSM card. It offers:

With no annual fee, getting a 5% cash back reward on gas alone would be enough to turn anyone's head. But the Discover More card goes a step further in offering it in so many more categories that are important to its customers. The only exception is that grocery store purchases are returned at 1%.

Like the MotivaSM, Discover More card holders have the opportunity to earn substantial rewards through the Discover shopping site, but for this card, it's more of a peripheral bonus.

Chase Freedom Credit Card

The first purchase results in $50 back in cash. After that, 3% is returned for gas and other noted stores. But what tops it off is that the other categories, such as paying one's phone bill and grocery expenses is returned with a full 1%, not up to 1% like other cards.

This card is attractive because its terms are spelled out specifically. 3% in some categories and 1% everywhere else with $50 up front.

Living a life with credit cards is not preferable for some, and downright scary for others. For those who want cards for the benefits that can be received, it's best to get the one that offers the best rewards so as to make the most use of them.

The copyright of the article Best Credit Cards for Cash Back Rewards in Consumer Education is owned by Christopher Pascale. Permission to republish Best Credit Cards for Cash Back Rewards in print or online must be granted by the author in writing.