Should You Get a Cash Rewards Credit Card?

Last month I posted on instagram  that I would be using the rewards from my Bank of America Cash Rewards as spending money on my upcoming vacation. I received a few inquiries as a result asking me to explain how cash rewards cards work. Soooo in this blog post I will cover;

• What a Cash Rewards Credit is?
• Which Cash Rewards Cards are the best?
• Should you get a cash rewards credit card?

What is a Cash Rewards Credit Card?

Cash rewards credit cards pay you back in cash for a percentage of what you spend. Most cash rewards cards cash back percentage is between 1-3%. There are a few cards that offer a 5% cash back percentage. For example, if your rate is 1% you will earn $0.01 for every dollar you spend. I know that may not seem like a lot but it adds up. It only took a little over 6 months for me to accumulate $387 in cash rewards. This is free money that I can now use on my vacation.  

Cash rewards credit cards are very popular and getting your hands on one is as easy as logging into your online bank account and applying. Most bank institutions offer them but your bank may not have the best card for you and your family. Next, I will list five cash reward credit cards that I believe you could benefit from.

Which Cash Rewards Cards are the best?

1. Capital One Quicksilver One Cash Rewards Credit Card
   • Annual Fee-$39
   • Rewards Percentage-1.5%
   • Intro Offer-0.00
   • Pros-Earn unlimited 1.5% cash back. This card is a credit options for those that have a fair credit score (690).
   • Cons-Annual fee of $39 is a slight turn off. However, the other benefits make up for. Another con is that the annual percentage rate on this card is high as well. If you decide on this card or any other card, I highly recommend paying off your balance before the end of the month to avoid interest charges. 
2. Capital One Quicksilver Cash Rewards Credit Card
   • Annual Fee-$0.00
   • Rewards Percentage-1.5%
   • Intro Offer-$200
   • Pros-Earn unlimited 1.5% cash back and you can redeem your cash rewards with no minimum. 
   • Cons-You can gain more cash rewards with other cards. 
3. Chase Freedom Unlimited
   • Annual Fee-$0.00
   • Rewards Percentage-1.5-5.0%
   • Intro Offer-$200
   • Pros-TRAVEL and Eat Good honey. The chase card offers bonus rewards when you use this card to book your next vacation (5%) or at your favorite restaurant (3%). Oh and you also get bonus points when you use this card at drugstores (3%).
   • Cons-This car charges a 3% foreign exchange fee.
4. Bank of America Cash Rewards
   • Annual Fee-$0.00
   • Rewards Percentage-1.5-3.0%
   • Intro Offer-$200
   • Pros-You’ll earn 3% cash back in a category of your choice. You’ll earn 2% at grocery stores and wholesale clubs. 1% on all other purchases. 
   • Cons-The  3 and 2 percent cash back is capped at $2,500 per quarter.
5. Ink Business Unlimited
   • Annual Fee-$0.00
   • Rewards Percentage-1.5%
   • Intro Offer-$750
   • Pros-You’ll earn 1.5% on all categories. There is also a 0% introductory period and a really really good introductory offer for new card holders.
   • Cons-You must be able to answer financial questions pertaining to your business. This can be con for someone just starting out that doesn’t have an adequate paper trail.

Should you get a cash rewards card?

In short, YES.  However, If you know you’re going to rack up a large credit card bill, stay away. If you can be disciplined and pay the card off in FULL by month end, I say go for it. It’s a great way to earn free money to do things like travel, shop or even pay off other debt like student loans. Remember, work smarter not harder.

Please let me know if this was helpful and if you would like to learn more about how to make credit cards work for you.