Cash back

Table of Contents

Refers to two types of financial transactions related to credit and debit cards

  1. a credit card benefit that refunds the cardholder a small percentage of the amount spent on each purchase above a certain dollar threshold.
  2. a debit card transaction in which cardholders receive cash when they make a purchase—generally, a small amount above the item cost.

In issuing a cash-back reward, the credit card company shares with the consumer a portion of the transaction fee that it charges merchants.

Is Cash Back Free Money?

Not exactly. When a credit card offers cash back rewards, they are betting that the cardholders’ increased spending will exceed the money spent on cash rewards. Cardholders pay for cash back through higher APRs and merchant fees.

  1. Citi Double Cash Review
    1. The combined 2% rewards rate — 1% when you make a purchase and 1% when you pay it off
    2. Annual fee = $0.
    3. Among the best on any cash-back card
  2. Costco Anywhere Visa Card by Citi
    1. 2% cash back on all Costco and Costco.com purchases
    2. One of the stronger gas rewards rates available. 4% back on eligible gas and EV charging purchases(for the first $7,000 per year and then 1% thereafter)
    3. Annual fee: None ($60 Costco membership required to apply)
  3. Amazon Prime Visa Credit Card
    1. Reward points
      1. 5% back at Amazon.com and Whole Foods Market
      2. 5% back on Chase Travel℠ purchases
      3. 2% back at restaurants and gas stations
      4. 2% back on local transit and commuting
      5. 1% back on all other purchases
    2. Drawbacks
      1. Must have Amazon Prime membership

Cards to consider:

  1. Blue Cash Preferred Card from Amex
    1. https://www.bankrate.com/finance/credit-cards/reviews/blue-cash-preferred-card-from-american-express/
    2. While it charges a $95 annual fee ($0 intro annual fee for the first year), it’s easy to recoup the cost with the card’s most rewarding categories.
  2. Chase Freedom Unlimited
    1. no annual fee
  3. American Express Blue Cash Everyday
  4. Capital One Venture X
  5. AAA Cashback Visa Signature Card
    1. 3% - Everyday Spending - Grocery stores, gas stations, electric vehicle charging stations, and dining
    2. 2% - AAA + Travel + Insurance, AAA Membership, travel and insurance
    3. 1% - Everything Else - All other qualifying spend
    4. No Annual Fee
    5. No Foreign Transaction Fees*

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