I handle our credit card coverage for Clark.com, and I’d like to start doing a periodic check with our readers, listeners and community members to see how they’re feeling about their credit cards.
Today I’m wondering: What is your favorite cash back credit card in your wallet right now?
As you all probably know, Clark is a big fan of 2% cash back credit cards. He often suggests the Citi Double Cash Card to listeners who are looking for a solid “everyday” rewards card with no annual fee.
Personally, I’ve been enjoying using the Fidelity Rewards Visa Signature Credit Card for many of my recent purchases. With its automated redemption for Fidelity investment accounts, this card has allowed me to passively add those 2% cash back rewards to my Roth IRA contributions. I use that to help me work toward maxing out my contribution each year!
I also like using the PayPal Cashback Mastercard. It offers 2% back on all purchases, and 3% back on purchased made via PayPal. So I’m able to get 3% back on many of my online purchases with this card by using PayPal at the checkout!
But those three aren’t the only good no-annual-fee cash back credit cards out there!
I prefer Bank of America credit cards because of their Preferred Rewards program. I keep a little more than $100,000 in a Roth IRA at Merrill Edge to qualify for their Preferred Rewards Platinum honors program which allows me to get a 75% bonus on all cashback rewards cards. Jonathan Ping in his My Money Blog explains this very well here: https://www.mymoneyblog.com/merrill-edge-brokerage-bonus-preferred-rewards.html
In this article, he writes: Credit card rewards. With the Preferred Rewards boost, you can get up to 2.6% cash back on all your purchases with the Bank of America Unlimited Cash Rewards card, or 2.6% towards travel and no foreign transaction fees with the [Bank of America Travel Rewards Card]. You can also get 5.2% cash back on the first $2,500 in combined grocery/wholesale club/gas purchases each quarter with the [Bank of America Customized Cash Rewards Card]
My two cash back favorites are AmEx and the Citi Costco credit card.
I really like the AmEx Blue Cash Every Day Credit Card!
-No annual fee (a Clark staple)
-3% cash back on groceries
-3% on online purchases
-3% on gas
-1% on everything else
I also have the AmEx Blue Cash Preferred. The first year is free. It does have a $95 annual fee after that, but if you spend $200 a month in groceries, it pays for the $95!
-6% cash back on groceries
-6% on select streaming
-3% on transit (taxis, rideshare, parking, tolls, trains, buses, etc)
-3% on gas
-1% on everything else
The Citi Costco is pretty great as well (another Clark staple)! The 4-1% cash back is wonderful, as it covers a wide array of stuff.
-4% on Costco Gas and selected gas
-3% on restaurants (my wife and I have taken advantage of this!) and Costco Travel, I believe
-2% on all Costco and Costco.com purchases
-1% on everything else
I only have cash back credit cards because I don’t want to deal with points, converting them, and worrying if the expire.
I have several cashback cards which I use according to which one is best for a particular purchase. I have labels on each card in my wallet to easily pull out the best one when making the purchase.
Amex Blue Cash Preferred used for 6% on groceries and streaming (easily covers the $95 annual fee).
Chase Amazon Visa used for 5% on all Amazon purchases. Pretty much only used for Amazon.
Chase Freedom Flex used for 5% on quarterly rotating categories only when better than the other cards
Citi DoubleCash only have this card for the Virtual Card feature which I use periodically
Citi CostCo Visa used for 4% off on gas
Fidelity Rewards Visa Since I’m a Fidelity Wealth Management client, I get 3% rebate on this card for everything with no limit. Therefore, I use this card for everything except when the cards above are better. If one of the above cards gives 3% or less for a category, I just use this card instead.
Using these cards and strategy, I’ve received well north of $2000 in rebates in the last 12 months.
I have the Fidelity 2% cash back card. When I first got it I only had a rollover IRA with Fidelity that had pre-tax money in it so I designated that for the 2% cash back. But I think that means I’ll have to pay tax on it when it’s withdrawn since it’s comingled with the rollover pre-tax money. I didn’t see anything separating them and have since rolled that IRA back into my current employer’s 401k.
But I opened a regular brokerage account at Fidelity and am sending the 2% cash back to that account.
It would be nice to know if it was a mistake to designate that rollover IRA as the account to received the 2% cash back.
I think the credit card rewards that went into the IRA count as contributions to the IRA. So you have to make sure you are/were eligible to make those contributions within the relevant limits.
I think this would be the same as if you took money out of your checking account and deposited it to the IRA. You already paid tax on that money, so it would be a post-tax contribution. But I’m not a tax advisor, so you may want to consult one. Or, I’m sure Fidelity will tell you how the deposits (contributions) were characterized.
These are our goto cards, too. We do keep a, seldom used, BOA Visa for the odd time we run into a situation where Amex isn’t honored. Those are becoming a lot less common these days.
Hi Nick,
I mostly use the Citi Double Cash back. But one thing that has annoyed me lately is that at some checkouts they try to get you to use your reward points on your purchase at an unfair exchange rate. For example at Walmart last week I had inserted my card and waited for the transaction to complete. The screen displayed a red button and a green button, and without reading them, I hit the green one thinking I was accepting the transaction, I didn’t notice until I looked at my receipt that I had chose to use 25 reward dollars for $20 off my purchase.