The Best Cash Back Credit Cards of 2014

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Part 3 of 4 from the best rewards credit cards series

Updated: April 3, 2014

In Part 3 of this series of posts on the best rewards credit cards, I’m covering the best cash back credit cards. I already covered the best all-around rewards credit cards in Part 1 and the best airline credit cards in Part 2. To round out the series, I write about the best hotel credit cards in Part 4.

Cash back credit cards generally aren’t the best overall cards, but they are the best complementary credit cards to own.

I still recommend the Barclaycard Arrival(TM) World MasterCard® – Earn 2x on All Purchases as the best card you can own. It’s simply the top choice for your main credit card because you can earn twice the amount of rewards consistently on every purchase.

To maximize rewards, you’ll want two or more credit cards, and one of them should be a cash back credit card (unless you consistently fly on one airline).

If you aren’t loyal to one airline, the best combination of cards is the Chase Freedom® cash back card and the Barclaycard Arrival(TM) World MasterCard® – Earn 2x on All Purchases.

chase freedom + TSD_Barclaycard_Arrival_World_MasterCard_Earn_2x_on_All_Purchases = Maximum Rewards

Cash back cards can be very powerful rewards earners in select categories, for specific periods of time. Once you hit your cap on earning rewards at a level of 5% or 6%, you’ll want something to keep you going at a rate of 2% on all your purchases. For now, let’s just focus on the best cash back credit cards as a starting point.

The 3 best cash back credit cards are:

  1. Chase Freedom®
  2. Discover it®
  3. Blue Cash Preferred® Card from American Express

Look for 5% Cash Back or More

Cash back cards are decent all-around cards for everyday purchases. Most cash back credit cards have a base rewards rate of 1%, but some go up to 1.5%. That’s just the starting point for earning rewards.

The top cards, like Chase Freedom® and Discover it®, offer rotating categories that enable you to earn 5% cash back on a variety of common purchases each quarter. The Blue Cash Preferred® Card from American Express even offers 6% cash back on purchases from U.S. supermarkets. As a rule, the sign-up bonuses aren’t as high as the airline credit cards, and your earnings are capped at a certain amount.

Cash back cards have some of the lowest APRs and are very friendly to balance transfers. As I mentioned in my previous posts, you shouldn’t be getting a card if you’re going to carry a balance. But, if you must carry a balance, a cash back card should hurt you the least of any rewards card.

The most important features of the best cash back credit cards are:

  • High rewards rates (5% or higher)
  • Easy earning (multiple categories over 1% or rotating 5% categories)
  • Generous, achievable sign-up bonuses
  • Card membership benefits (extras, additional bonuses, no foreign transaction fees)

Chase Freedom®: The Most Versatile Cash Back Card

chase freedom

The Chase Freedom® is one of the top three cash back cards due to its versatile rotating 5% cash back categories. The style of this card is very similar to Discover it®, which is mentioned below. You get 5% cash back on up to $1,500 in combined purchases on new 5% categories every 3 months.

Card Highlights:

  • Earn a $100 Bonus after you make $500 in purchases in your first 3 months from account opening
  • Earn a $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period
  • 0% Intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 13.99%-22.99%.
  • 5% Cash Back on up to $1,500 in combined purchases between April 1 and June 30, 2014 restaurants and Lowe’s® home improvement stores
  • You’ll enjoy new 5% categories every 3 months like gas stations, restaurants and It’s free and easy to activate your bonus each quarter!
  • Unlimited 1% Cash Back on all other purchases
  • No annual fee and rewards never expire

Who’s it good for?

  • This card will work for everyone, and is especially great as a second credit card.
  • Since quarterly rewards are capped at $1,500, it is recommended more for smaller spenders.
  • Chase bank clients.

What’s the best way to use it?

  • Take a look at the rotating quarters and plan your purchases ahead of time. If you’re about to buy a big ticket item from, it might be smart to wait until you get 5% cash back.
  • The Chase Freedom® pairs well with a solid travel card, like the Chase Sapphire Preferred®. The Barclaycard Arrival(TM) World MasterCard® – Earn 2x on All Purchases is also a fine choice.
  • Make sure you opt in each quarter to receive your 5% cash back. It’s not automatic, but Chase does a good job of sending reminders. If you opt in late, Chase still retroactively gives you the 5% on your purchases that qualify for that quarter.

Discover it®: The Best Complementary Cash Back Card


The Discover it® card is consistently one of the best cash back cards. Just like the Chase Freedom®, it offers 5% cash back on rotating categories so the rewards are some of the highest you’ll find anywhere. Discover it® isn’t accepted everywhere, but when it is, it’s well worth owning due to the high rewards and great benefits.

Card Highlights:

  • Fair. No annual fee. No overlimit fee. No foreign transaction fee. Pay up to midnight ET online or by phone on your due date without a fee. Plus, paying late won’t raise your APR.*
  • Generous. 5% cash back at Home Improvement Stores, Furniture Stores and Bed Bath & Beyond® on up to $1,500 in purchases from April through June 2014.*
  • Human. 100% U.S.-based customer service available any time.
  • Safe. Because you’re never responsible for unauthorized charges with our $0 Fraud Liability Guarantee.
  • Plus, free FICO® Credit Score on your monthly statement to help you stay on top of your credit.*
  • 0% Intro APR* on balance transfers for 18 months. Then the variable purchase APR applies, currently 10.99% – 22.99%. A fee of 3% applies for each balance transferred.
  • 0% Intro APR* on purchases for 6 months. Then the variable purchase APR applies, currently 10.99% – 22.99%.
  • Who’s it good for?

    • Irresponsible people. I say this only half joking because you can pay late, lose your card, and go over your limit without being charged a fee.
    • The card is good for just about anyone. I would advise, though, that you own another credit card along with the Discover it®.
    • The obvious downside to going with Discover is their cards aren’t as widely accepted as Visa and MasterCard. It’s good for people who have a Visa or MasterCard already.

    What’s the best way to use it?

    • Take advantage of the quarterly 5% cash back rotating categories. Plan your purchases accordingly.
    • Check out the cash back calendar where you can see the upcoming categories for the year.
    • You’ll want another card, preferably a Visa or MasterCard (again, I recommend the Barclaycard Arrival(TM) World MasterCard® – Earn 2x on All Purchases) to ensure you can pay for things wherever you go.
    • This is a decent card to use while traveling because has no foreign transaction fee.

    Blue Cash Preferred® Card from American Express: The Best Gas Rewards Credit Card


    After you get past the relatively weak sign-up bonus and the annual fee, the Blue Cash Preferred® Card from American Express is a great long-term cash back card to own. The major highlight of this card is the whopping 6% cash back at U.S. supermarkets.

    Card Highlights:

    • 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases).
    • The 6% cash back at U.S. supermarkets gets you $360 worth of rewards before you hit the $6,000 cap.
    • 3% at U.S. gas stations and select U.S. department stores.
    • No cap on the 3% cash back at U.S. gas stations.

    Who’s it good for?

    • This card is best for families. Given the targeted rewards, it fits right into the weekly purchase habits of moms and dads.

    What’s the best way to use it?

    • You want to use it to buy your gas and groceries.
    • Getting 6% cash back on any category is nearly unheard of, so to take full advantage of the rewards, you want to hit that $6,000 cap.
    • I still think you’ll want to pair this card with another rewards card, like the Barclaycard Arrival(TM) World MasterCard® – Earn 2x on All Purchases, so you can get 2x rewards once your 6% earning cap is hit for the year.

    I read a few comments on other sites about the card not dishing out the 6% rewards at every standalone U.S. supermarket. As far as I know, you’re definitely getting the 6% at Whole Foods, Trader Joe’s, Safeway, and other major supermarkets. You might not get the 6% at specialty food stores or local grocery stores, but it’s best to ask the American Express reps if you’re unsure.

    Blue Cash Preferred® Card from American Express vs. Blue Cash Everyday® Card from American Express

    American Express offers a similar card called the Blue Cash Everyday® Card from American Express that has no annual fee. The rewards earning potential is half as much for U.S. supermarkets at 3% but the cap of $6,000 remains the same. You also earn 2% at U.S. gas stations and select U.S. department stores. At the surface, it’s tough to tell which one to get, but when you get into the numbers it’s obvious.

    Let’s take a look at a quick comparison between the two cards.

    Here are the numbers I’m working with to create this comparison:

    • You spend $6,000 on groceries in a year to maximize your rewards.
    • You spend another $4,000 per year on gas and whatever you buy at department stores.
    • Your spending remains consistent year to year (for the purpose of standardization).
    • No other purchases at the standard 1% rate are accounted for.
    • The time frame is over the course of four years and shows your cumulative earnings.
    • The sign-up bonus and annual fee are factored in each year because this is cumulative (by year 4, you have still only accumulated the year 1 signing bonus).

    Blue Cash Preferred® Card from American Express

    1 Year 2 Years 3 Years 4 Years
    Sign-up bonus $100 $100 $100 $100
    Rewards earned $480 $960 $1440 $1920
    Annual fee -$75 -$150 -$225 -$300
    Cumulative earnings $505 $910 $1315 $1720


    Blue Cash Everyday® Card from American Express

    1 Year 2 Years 3 Years 4 Years
    Sign-up bonus $50 $50 $50 $50
    Rewards earned $260 $520 $780 $1040
    Annual fee -$0 -$0 -$0 -$0
    Cumulative earnings $310 $570 $830 $1090



    • As you can see, even after factoring in the annual fee, it’s worth getting the more powerful rewards card.
    • This only holds true if you plan on maximizing the 6% cash back rewards.
    • The only reason you’d want to go with the Everyday card over the Preferred card is if your annual spending is going to be minimal. In that case, you probably shouldn’t get either card.

    3 Other Cash Back Cards Worth Your Consideration

    There are three other cards that are worthy of being mentioned, but didn’t quite make the cut. I’ll give you the highlights of each and explain why they didn’t make it.

    Capital One® Quicksilver® Cash Rewards Credit Card

    Card Highlights:

    • Earn unlimited 1.5% cash back on every purchase, every day
    • No rotating categories and no sign-ups needed to earn cash rewards
    • Redeem the cash back you earn for any amount, any time
    • No limit to the cash back you can earn
    • Your cash back doesn’t expire
    • 0% intro APR on purchases until November 2014
    • Get access to a higher credit line after making your first 5 monthly payments on time
    • Fraud Coverage if your card is ever lost or stolen

    Why it didn’t make the cut

    • You simply get 1.5% cash back on everything, which is very solid and consistent but it doesn’t have the upside of the others.
    • The best part of this card (consistent rewards and no limits) is also what prevents it from directly competing with the top three cash back cards. (For someone that doesn’t have great credit, though, this card might be a good option.)

    BankAmericard Cash Rewards™ Credit Card

    Card Highlights:

    • Get $100 cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening
    • 2% at grocery stores and 3% on gas for the first $1,500 in combined grocery store and gas purchases each quarter
    • Get a 10% customer bonus when you redeem cash back into a Bank of America® checking or savings account

    Why it didn’t make the cut

    • Both the 2% and 3% cash back categories are capped at $1,500.
    • Comparing it to a top cash back card that offers 5% on rotating categories, this is far inferior.
    • Offering 3% cash back for gas is a decent reward, but one of the top cards offers up to 6% on gas.

    Citi® Dividend Platinum Select® Visa® Card

    Card Highlights:

    • Earn $100 cash back after $500 in purchases within the first 3 months of account opening.
    • Earn 5% cash back every quarter in must-have categories.
    • No Annual Fee.

    Why it didn’t make the cut

    • This card is very similar to the Discover it® and Chase Freedom® because it offers the same type of 5% cash back reward on rotating categories. However, the cash back categories don’t seem to offer as many common, everyday purchases.
    • Take a look at the calendar and decide for yourself.
    • The sign-up bonus is also slightly less than the top cash back cards.

    How I Chose the 3 Best Cash Back Credit Cards

    Choosing the best cash back credit cards wasn’t very difficult. I quickly found the best cards by looking for cash back rewards of 3% or higher. From there, it was easy to identify the best cash back cards as the ones that offered rewards of 5% or more on select categories.

    Here’s the simple process I used to identify the best cash rewards credit cards:

    1. I used the same data mentioned in my post on rewards credit cards.
    2. I used a group of 80 rewards credit cards as a starting point.
    3. I identified a cash back card as a card that only enables you to redeem rewards for cash back.
    4. I looked at the rewards rates for the cards to eliminate any cards offering 2% or less.
    5. I focused on cards with 5% rewards or higher for one category.
    6. I made sure none of the other cards offered any special features that may compensate for having a lower rewards rate.

    Upon reaching my final conclusion, I determined that cash back cards are some of the best in the industry. The rewards rates and versatility of earning these rewards are unmatched by any other card types. However, cash back credit cards come with limitations.

    Cash Back Cards: Not the Overall Best Rewards Credit Cards

    If you read my post on the best rewards credit cards, you might be wondering why I didn’t include any cash back cards. I have two specific reasons why a cash back credit card should not be your only card if you want to get the most bang for your buck.

    There are two major limitations with cash back credit cards:

    1. Since the rewards are so great, the issuers cap the amount of rewards you can earn each quarter or each year (depending on the card). Big and average spenders are likely to hit these caps, then the card becomes a 1% cash back card.
    2. The best cards only offer cash back in specific categories and not on all purchases. While you can earn very high rewards for these purchases, steady rewards earning with a consistent 2% or 2x card gets you more in the long run.

    The 3-Card Strategy to Maximize Rewards

    Given its limitations, a cash back credit card is still worth owning. If you can manage owning three cards, or even just two, a cash back card should be among them. But let’s assume you want to completely max out your rewards earning potential without owning an excessive amount of cards.

    Owning two or three cards is the right number to get the most rewards and still keep the cards active (assuming you’re paying off the balances). You’ll be able to take advantage of the bonuses and ongoing rewards without major limitations. (If you aren’t a fan of paying annual fees, I recommend going with just two cards: a cash back card and a general rewards card.)

    Here’s my strategy to max out your rewards with three cards:

    Does anyone have any other strategies to share for maximizing your rewards earning potential? Let’s discuss in the comments below!

    Written by Mike Jelinek
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    Read Part 1 -> The Best Rewards Credit Cards
    Read Part 2 -> The Best Airline Credit Cards
    Read Part 4 -> The Best Hotel Credit Cards

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