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Best Cash Back Credit Cards (2014 Update)

September 28, 2011
Best Cash Back Credit Cards for 2011

If you have good credit, the opportunities this year are quite a bit better than the ones from last year. I recently found & applied for the two best cash back credit cards I’ve seen available in a long time.

Over 18 months ago Schwab offered a cash back card at 2% for a limited time and the window closed before I could apply.  It does not plan to re-offer the card and I’ve been hunting for a 2% cash back credit card ever since.  Fidelity is offering two amazing deals, including a 2% cash back card, for an unknown period of time; act accordingly.

(Drum roll) Here are the best cash back credit cards for 2011 (and updated for 2013 — still the same!)

American Express Fidelity Rewards: Earn 2% cash on everything.  The best overall credit card on the internet.  Requires opening a Fidelity account online here (<3 minutes, no deposit required). Cash back rewards are transferred to the Fidelity account (can be transferred to your checking or automatically invested in an IRA or college savings account).  You can setup the cards to auto-sweep to your account monthly assuming you have at least $50 (instead of yearly like Costco or until you have some minimum number of points).  App.

VISA Capital One Rewards:  Earn 1.5% cash back on everything.  This is better than the Fidelity VISA card in two important ways:  it doesn’t require a Fidelity account and instead of sweeping the money into an account, you can set it to auto credit against your future bill so you get immediate benefit instead of the bank holding your money. App.

VISA Fidelity Cash Rewards: Earn 1.5% cash on everything.  Requires first opening a Fidelity Cash & Brokerage account online here (<3 minutes, no deposit required)). Cash back rewards are transferred to the Fidelity account which can be transferred to your checking or automatically invested in an IRA or college savings account.  Be sure to give Fidelity account # to representative if applying by phone.  App.

American Express Costco Business: Earn 3% back on gas up to $6,000, 2% on eating out, 2% on traveling, and 1% on everything else.  They send a check out once a year with what you accumulated. App.

American Express Costco Personal: Earn 3% back on gas, 3% on eating out, 2% on traveling and 1% on everything else. They send a check out once a year with what you accumulated. App.

Amex SimplyCash Business: Earn 5% cash back on wireless service and office supplies , 3% on gasoline up $12,000 per year, and 1% on every other purchase.  $100 annual fee (which eliminates a lot of its value for me).  Plus, it is automatically credited to your statement each month. App.

American Express Additional Benefits:
Extended Warrenty: Extends the term of the original manufacturer’s warranty up to one additional year.
Damage/Theft Protection: Protects purchases against accidental damage and theft for up to 90 days from purchase.
Other Benefits here half way at bottom.

American Express is the best card to use for all new purchases particularly because it extends the warranty for free for a year, which has a lot of value.  For example, extending the iPhone warranty 1 year costs an additional $70; an extended warranty on a new TV or other high end purchase is worth even more money.  A friend recently had the water pump on his hot tub go out;  it was outside the manufacturer’s warranty by 1 month.  But it was covered by American Express, who cut him a check for $700.

Since American Express is not accepted at all places, particularly restaurants, there’s value in also having a VISA Rewards card.

VISA Bank of America Rewards: 3% gas, 2% restaurants, 1% everything else plus $50 cash bonus.  App.

Summary:  The difference between 1% and 1.5%-2% is  is 50%-100% more cash back.  It’s the difference between a $500 (at 1%) and a $750 (at 1.5%) or $1,000 (at 2%) for simply using a better card.

Avoid.  Credit cards with “up to” language or that have rotating categories or other strings attached generally are games that lower total cash back at the end of a year.

Debit Cards.  While I strongly dislike debit cards because they are more difficult to deal with in terms of fraud protection and offer less fringe benefits, below is the best cash back debit card available:

Mastercard PerkStreet Debit Card:  2% cash back on everything provided you maintain a $5,000+ balance. Less than $5,000, the reward drops to 1%. App.

These are the best deals I believe are available.  If you’re aware of something better, please let me know.

 

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