To help guide you, we painstakingly researched the best cash-back cards that have no annual fees. They’re listed in the order of the ones we liked best, for the reasons below.
Meet your new credit cards:
Capital One No Hassle Cash Rewards
You get 2% back on gas and grocery store purchases, and 1% back on the rest. We like that you get extra for groceries and gas—things you buy regularly.
Chase Freedom
Chase gives you $50 back from your first purchase and 3% cash back on purchases from its rotating categories including gas, home furnishings, and department stores. You get 1% on all purchases not in those special categories.
Blue Cash From American Express
If you spend more than $6,500 in a year (many of the nation’s largest landlords let you pay rent on your card!), then you receive 5% back on purchases at major supermarkets, gas stations, and drug stores. You get 1.5% back on all other purchases outside of these categories. Before you hit the $6,500 mark, however, you get 1% back on those special purchases and 0.5% on the rest.
Discover More Card
Although it is famous for providing cash back, it’s not our favorite because it only does so in rotating categories. For example, this past January through March, it provided 5% for purchases on airlines, hotels, car rentals, and cruises. On purchases not in these categories, you receive 1% after you spend $3,000 for the year; until that point, you are stuck at 0.25% cash back.
Our favorite part? Regarding taxes—you are getting cash, after all—these rebates are considered a reduction in purchase price, rather than being considered income. (Although there is no official word, the IRS issued a private-letter ruling to that effect in 2002.)
DISCLAIMER: If you get these cash-back cards, you MUST pay off your bill in full every month because they are laced with higher interest rates, shorter grace periods, and high late fees.
That’s the LearnVest way to make your money work for you—because, remember, it doesn’t pay to be broke.
