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The Best of Credit Card Rewards Programs

bryantq 1,289 March 14, 2012 at 07:07 PM
Thanks to the growing number of credit card owners who take advantage of low APR’s or APR’s in general, a surge of credit card sign up and rewards programs have inundated all of our mailboxes. Credit cards are the ultimate test of responsibility because although you have more credit and more rewards programs to choose from, you also have to remember all your due dates and of course, all of your purchases.

Assuming the best credit card habits from our readers - having a decent credit score, paying credit card bills in full and avoiding cash advances or balance transfers - we’ve compiled a list of the best rewards programs available for each of your specific needs. These credit cards all have varying sign up bonuses that you can take advantage of and have little to no sign up fees and no annual fees.

Gas: The best gas card we have is the PenFed Platinum Rewards [penfed.org] Visa that offers 5% cash back for gas, 3% for groceries and 1% for everything else, regardless of what month it is or how long ago you signed up. There are two minor caveats in the deal: If you’re not affiliated with the military, there’s a $20 sign up fee, and the cash back comes in Visa cards that have to be redeemed in $50 increments ($1,000 worth of gas purchases).

Groceries and Books: The first of the two Sallie Mae cards that made it to our list is the Sallie Mae 5 Percent [salliemae.com] Visa, which gives 5% cash back for groceries up to $500, 5% on bookstores up to $1,000 and 1% on everything else. Percent cash back for this card is tiered until you can redeem $100 ($2,000 worth of groceries).

Dining, Books, Movies, and Music: The Citi Forward [citi.com] Visa offers 5 rewards points on dining and restaurants, books, movies and music and 1 point for everything else. The reason why the offer specifies ‘rewards points’ for this card is because Citi ThankYou points are not as easily redeemable and actually exchange for 6,500 points for $50.

Other credit cards that offer 5% cash back deals are Chase Freedom and Discover [discovercard.com], which have rotating categories quarterly. Until the end of March, Chase Freedom offers 5% cash back on Gas and Amazon purchases, while Discover offers the same deal for Gas and Entertainment. For the second quarter of the year, the categories switch to Groceries and Movies for Chase Freedom and Restaurants and Movies for Discover.

It’s also worth mentioning a few of the retailer-specific cards that have more than your regular card’s cash back. The Target REDCard [target.com] offers 5% cash back on all Target purchases including free shipping on online purchases. Amazon [amazon.com] and Buy.com [buy.com] cards each provide 3% cash back on the respective online stores and are also Visa cards, which give 1% cash back for all other purchases. For Costco shoppers who by now know that Costco only takes AMEX credit cards, there’s also the Fidelity American Express [applyonlinenow.com] card, which offers 2% cash back on all purchases.

If you only carry a money clip and have space for just one card, the default card to go with is the Sally Mae 2 Percent [salliemae.com]Visa Signature, which offers 2% cash back on everything. Just like the Sallie Mae 5 Percent however, this 2% card also has a tiered cash back program, where you have to accumulate 25,000 points be you’re able to redeem the full 2%.

35 Comments

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#16
has anyone got pre-approved and then when applied got rejected? Chase keeps sending me letters saying I'm pre-approved
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#17
Quote from Slercher View Post :
Never heard about the penfed card. Pretty slickdeal if you drive alot all year round. See link above! Thank you!
"Keep in mind that very few people who’ve applied for PenFed cards through our site have been approved".
http://www.nerdwallet.com/blog/2012/penfed-platinum-rewards-card-offers-250-signup-bonus/

Only card where I had to submit either two months of paystubs or two years of W2s as part of the application process.


ETA: Concur with other posters that the Amex Blue Cash Preferred is the best card out there for groceries if you spend a decent amount on groceries. The ability to buy gift cards and get 6% back is just icing on the cake.
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#18
I haven't read any of the responses.. but I believe the best grocery credit card it the amex blue cash preferred at 6% for supermarkets.

Sure there's a $75 annual fee... but with the $150 signing bonus think of it as 2 years free

http://www.hustlermoneyblog.com/b...ermarkets/
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#19
From what I've seen, if you're going to have one card to rule them all, the Fidelity AMEX 2% is actually the best deal, far and away. It's like the sally mae one, and you can cash out if you want, but the really hot setup is to dump directly (and automatically) the rewards into a Roth IRA.

The thing is, 5% is nice and all, but it's such a limited segment of your purchases that it doesn't net you the same amount overall as it would if you just get a full 2% of everything.

Do the math, but I charge just about everything, and the flat 2% got me a couple hundred more than a 5% gas/drug/grocery card ever did. Or, combine the two...a 5% chase freedom + 2% AMEX (it's not a bad idea to keep a visa/MC for the very small subset of restaurants and sam's club that won't do amex).

More than anything, going from your rewards directly into an investment account means you're going to be getting interest-free cash on an interest-free investment. Like a boss.
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#20
Fidelity amex also has rotating 3-5% categories. Right now it's 3% on travel (airfare, hotels, cruises, car rental, etc). Before that it was 5% on gas and restaurants.

I carry 2-4 cards on me:
Forward (5% restaurants/books/movies/coffee)
Fidelity (2% everywhere, 3-5% in categories)
+/- Chase Freedom and/or Discover depending on if their discounts are in categories I use.
Discover is good to have because you can get 5% back at walmart.com through shop discover.

Someone should make a credit card category app/site cause it can get annoying trying to keep up with the categories for 3 different credit cards.
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#21
Quote from superjerms View Post :
From what I've seen, if you're going to have one card to rule them all, the Fidelity AMEX 2% is actually the best deal, far and away. It's like the sally mae one, and you can cash out if you want, but the really hot setup is to dump directly (and automatically) the rewards into a Roth IRA.

The thing is, 5% is nice and all, but it's such a limited segment of your purchases that it doesn't net you the same amount overall as it would if you just get a full 2% of everything.

Do the math, but I charge just about everything, and the flat 2% got me a couple hundred more than a 5% gas/drug/grocery card ever did. Or, combine the two...a 5% chase freedom + 2% AMEX (it's not a bad idea to keep a visa/MC for the very small subset of restaurants and sam's club that won't do amex).

More than anything, going from your rewards directly into an investment account means you're going to be getting interest-free cash on an interest-free investment. Like a boss.
Yup, however most people tend to agree that if you are going to carry only one card, that card should be a Visa/Mastercard rather than Amex (due to places not accepting Amex).

I've been extremely tempted to move my accounts to Fidelity and open their cards - the flat 2% on the Amex and 1.5% on the Visa is tempting. Right now I use a Costco Amex and a Chase Freedom - I've crunched the numbers and come out just slightly above/below 2% after all spending. It would be nice to dump them and not think about what month it is and what I'm buying.

(Note - the Fidelity Amex is not a full Amex as it is issued by BoA rather than American Express. Things like Travel and Purchase Protection are not the well regarded Amex services.)
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#22
Quote from rocodog View Post :
How about Amex Blue Cash Preferred? Amex Site [americanexpress.com]
It is the BEST CARD EVER ............. for "diligent" SDers.

It gives 6% on groceries purchases (excluding superstores and warehouse club)

If your local grocer allows you purchase giftcards with your Amex, you will get 6% cash reward.
No card can top that.

One of my grocery has amazon, ebay, best buy, nike, restaurants, staples, etc. You get the idea, right?

I already racked up about $350 in cash reward in 6 months. Had I been more diligent I could have easily racked up $1000+ in cash reward.

And there is no limit on cashback like other cards mentioned here.
I agree. I crunched the numbers. Looked at all my spending from last year and this card will net the biggest return. You can really get 6% back on gas as well. Just buy gas GC from your grocery store and you will save even more.
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#23
Quote from superjerms View Post :
From what I've seen, if you're going to have one card to rule them all, the Fidelity AMEX 2% is actually the best deal, far and away. It's like the sally mae one, and you can cash out if you want, but the really hot setup is to dump directly (and automatically) the rewards into a Roth IRA.

The thing is, 5% is nice and all, but it's such a limited segment of your purchases that it doesn't net you the same amount overall as it would if you just get a full 2% of everything.

Do the math, but I charge just about everything, and the flat 2% got me a couple hundred more than a 5% gas/drug/grocery card ever did. Or, combine the two...a 5% chase freedom + 2% AMEX (it's not a bad idea to keep a visa/MC for the very small subset of restaurants and sam's club that won't do amex).

More than anything, going from your rewards directly into an investment account means you're going to be getting interest-free cash on an interest-free investment. Like a boss.
Still the best if you don't dump into your IRA (don't qualify for a deduction)?
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#24
Quote from upallnight312 View Post :
I agree. I crunched the numbers. Looked at all my spending from last year and this card will net the biggest return. You can really get 6% back on gas as well. Just buy gas GC from your grocery store and you will save even more.
Wow. Thanks for this. I just grabbed this over my amex costco card. Does your grocery store charge for gift cards to other stores?
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#25
Besides the Amex blue preferred, the secondary card used should be the discover escape card. it is a flat 2% with no minimum tier. There is a yearly fee, but it is minimal.

https://www.discover.com/credit-c...MilesCards
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#26
Quote from thechainrule View Post :
Wow. Thanks for this. I just grabbed this over my amex costco card. Does your grocery store charge for gift cards to other stores?
No charge for store specific GC, just CC branded ones like AmEx and Visa.

I've been taking another look at this article and running the numbers again. These 2% back on everything cards may work well in a 3 card wallet. This AmEx for groceries, gas GC and department stores/amazon. A rotating catagory card like Chase Freedom or Discover for movies/restaurants/department stores when they hit 5% and one of the 2% back cards on everything else.

The down side to that strategy is that you need to hit 25,000 points ($12,500) on the 2% cards to cash out. If I only used it on my "other" purchases, it would probably take me 18-24 months to hit that and its a third account to track.

I'm trying to decide if it worth it. As it is, asking the wife to only use the Freedom/Discover card for certain stores at certain times of year, if going to take some work.

I miss the old Freedom card that gave me 5% back on my top 5 categories and $50 bonus, if I waited until I hit $200 to cash out. That was the best card ever!
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#27
Quote from superjerms View Post :
From what I've seen, if you're going to have one card to rule them all, the Fidelity AMEX 2% is actually the best deal, far and away. It's like the sally mae one, and you can cash out if you want, but the really hot setup is to dump directly (and automatically) the rewards into a Roth IRA.

The thing is, 5% is nice and all, but it's such a limited segment of your purchases that it doesn't net you the same amount overall as it would if you just get a full 2% of everything.

Do the math, but I charge just about everything, and the flat 2% got me a couple hundred more than a 5% gas/drug/grocery card ever did. Or, combine the two...a 5% chase freedom + 2% AMEX (it's not a bad idea to keep a visa/MC for the very small subset of restaurants and sam's club that won't do amex).

More than anything, going from your rewards directly into an investment account means you're going to be getting interest-free cash on an interest-free investment. Like a boss.
I don't see how this is anything special. having the CC dump rewards into a Roth IRA is no different than writing a $5k check. It's all after tax earnings.
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#28
Quote from thechainrule View Post :
Wow. Thanks for this. I just grabbed this over my amex costco card. Does your grocery store charge for gift cards to other stores?
I was under the belief that the costco amex was the way to go, as it gives back for purchases at costco and others don't? Or the assessment based solely on the rates since 3% is the highest and has a 3k cap? Does it not work on gas gc's at grocery stores also?

Also, does anyone have a miles/travel/hotel card they recommend? Thanks....

-SD Noob
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#29
Why doesn't this post mention the citi forward giving you 5% back on ANYTHING you buy at amazon.com? IMO the best deal out there. And the points can actually be traded in at more than a dollar a point. Just do a search for "citi points" on here and you will see that these deals come up from time to time.
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#30
For us old folks there's the AARP card from Chase. I think you need to be an AARP member. 5% on airfare, hotels, travel agents and rental cars. When I signed up they included 5% on everything for 6 months, but they canceled that policy. Probably because of me. nod
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