When it comes to maximizing credit card rewards, many people choose to never pay an annual fee. That way, they never have to worry about canceling the card if they stop using it enough, or the impact on their credit if they do.
Two excellent rewards cards that can help you maximize rewards without ever paying an annual fee are the Discover it® Cash Back and Chase Freedom® cards. Although they’re issued by different banks, neither one charges an annual fee, and they both offer a lucrative rewards program that allows you to rack up cash back on purchases. Here’s how they work:
Discover it® Cash Back
on Discover's secure website
Highlights
Card Highlights Provided by Discover:- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
- Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
- No annual fee.
Chase Freedom®
on Chase's secure website
Highlights
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
- Unlimited 1% cash back on all other purchases - it's automatic
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 17.24-25.99%.
- 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
- No annual fee
- Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
- Free credit score, updated weekly with Credit Journey℠
Here are some other tips and things to watch out for to make you’re the one taking advantage of your credit cards (and not the other way around):
Always pay your bill in full.
Although both cards offer 0% intro APR on purchases for a limited time, you should practice paying your balance in full each month. You won’t benefit from the rewards if you wind up paying interest on your purchases.
Don’t forget to opt in.
With the Chase Freedom® card and the Discover it® Cash Back, you need to “opt in” each quarter to earn the full 5% cash back on qualifying purchases. It’s easy to do online, but some might see it as an additional hassle.
Compare other perks.
If you’re trying to decide between the Chase Freedom® and Discover it® cards, don’t forget to look at the other perks each offers. The Chase Freedom®, for example, offers a sign-up bonus after you meet a minimum spending requirement in the first three months. Meanwhile, the Discover it® Cash Back offers a free FICO score on your monthly statement and online.
Know your redemption options.
With the Discover it® card, you can redeem your rewards in a few ways – as a direct deposit into your bank account, a statement credit, a payment through one of Discover’s partners (such as iTunes, Facebook, or Amazon.com), or a gift card to any number of retailers.
With the Chase Freedom® card and the Discover it® Cash Back, you have even more options. Not only can you redeem for cash back, but you can also redeem your points for gift cards or travel gift cards. And if you also have a Chase card that earns Ultimate Rewards points, such as the Chase Sapphire Preferred® Card, you can even combine your points and transfer them to a number of hotel loyalty and frequent flyer programs, such as British Airways, IHG, Marriott, Hyatt, Virgin Atlantic, and Southwest Airlines.
When it comes to the best no annual fee cards, the Chase Freedom® and Discover it® Cash Back cards are in a league of their own.
The key to maximizing these rewards is to look for subtle and not-so-subtle ways to save on purchases you were going to make anyway. And once you do, you get to enjoy the fun part – looking for ways to spend all of the rewards you’ve earned.
Do you try to maximize your rewards categories? What strategies do you use?
Editorial Note: Compensation does not influence our rankings and recommendations. However, we may earn a commission on sales from the companies featured in this post. To view a list of partners, click here. Opinions expressed here are the author's alone, and have not been reviewed, approved or otherwise endorsed by our advertisers. Reasonable efforts are made to present accurate info, however all information is presented without warranty. Consult our advertiser's page for terms & conditions.
