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The Top Five Cash Back Rewards Credit Cards (and how to use them effectively)
The best cash back credit cards for earning back CASH on your everyday purchases

by Paul Diamond Blow





Once upon a time I was a cash carrying man and paid cold cash for everything. Nowadays with the "cash back" rewards many credit card companies offer -- plus other bonuses -- it makes sense to own and use these cash back credit cards for most purchases. With these cards you can earn back between 1-5% on each purchase on goods and services you pay for regularly. Here I will list my top five cash back rewards credit cards and detail what each one is best used for. These credit cards will pay you back money on every purchase and do NOT require any annual fees! I personally have and use each of these cash back rewards cards.

1) Chase Freedom Visa Card
The Chase Freedom card is my favorite cash back card as they offer 5% cash back on bonus categories each quarter and 1% cash back on all other purchases. The 5% bonus categories include the following: gas, groceries, drug stores, restaurants, travel, and department stores. Plus, if you have a Chase bank account you earn an extra 10 points (ten cents) on every purchase no matter how small, and earn another 10% bonus on your rewards points each month. For instance, if you earned twenty dollars in a month with the cash back rewards you would get a two dollar bonus on top of that for having a Chase bank account. Also, Chase offers a $100 bonus to new card holders who purchase $500 worth of goods within the first three months (it was $150 when I got my card) which is very generous and you can also use your points to purchase items on Amazon.com without any minimum balance. (Read more on the Chase Freedom credit card here)

2) American Express Blue Cash Everyday Card
The American Express Blue card offers 3% cash back on groceries, 2% cash back on gas, and 1% cash back on all other purchases. There are no revolving bonus categories involved, so basically I use my American Express card for most of my grocery store purchases. If you buy a lot of groceries this card is worth having. American Express also offers a $100 bonus to new card holders who purchase $1000 worth of goods within the first three months. The American Express card is the coolest looking credit card I own as it comes in translucent blue plastic. That alone makes it worth having.

3) BankAmericard Cash Rewards Visa Card
I'm not a big fan of Bank America but I am a fan of their credit card. The BankAmericard credit card (a Visa card from Bank of America) offers 3% cash back on gas, 2% cash back on groceries, and 1% cash back on all other purchases. This is the card I use for purchasing gasoline (unless one of my 5% bonus cards offer 5% cash back on gasoline). If you have a Bank of America bank account and transfer your rewards money into your account you get an additional 10% bonus. That is, if you transfer $50 of rewards points to your bank account you get an additional $5. I mainly got one of these credit cards because they (like most of the other credit card companies) offer a $100 bonus to new card holders who purchase $1000 worth of goods within the first three months.

4) Discover Card
My Discover card is the first cash back credit card I ever owned. Like the Chase Freedom card it also offers 5% cash back rewards for bonus categories each quarter (including gas, groceries, drug stores, hotels, restaraunts, department stores) and 1% cash back on all other purchases. I basically use my Discover card only for the 5% bonus categories. Discover is the only credit card on my list that does NOT offer any bonus money for new card holders, but one nice thing about Discover is that you can use your reward points to purchase items on Amazon.com without any minimum balance and Discover also offers a $75 referral bonus for referring your friends or family (you each get a $75 bonus after the referral uses their new card). Discover is the only card on my list that offers a referral bonus.

5) Amazon.com Rewards Visa Card
This is a rewards credit card you can get through Amazon.com (partnered with Chase for the card) and it offers 3% cash back on all Amazon.com purchases, 2% cash back for gas, restaurants and drug stores, and 1% cash back on all other purchases.This is a good credit card to have if you do a lot of shopping on Amazon.com, and yes -- you can use your reward points to shop on Amazon.com with no minimum balance. I use this card as my default payment card on Amazon, and you should too!

Why and how you should use these cards
My philosophy with cash back rewards credit cards is that it is worth having all the major cards that offer at least a $100 bonus to new members or that offer 3-5% cash back on different categories. To use the cards I've listed effectively to earn the most cash back as possible you just have to pay attention to and sign up for the revolving 5% cash back bonuses that the Chase and Discover cards both offer. The beauty of having both the Chase and Discover cards is that their 5% rewards categories NEVER overlap -- that is, in one quarter Chase will offer 5% cash back on gas and drug stores while Discover will offer 5% cash back on restaurants and movies (and the categories change each quarter). If groceries are not covered by the 5% rewards in a quarter I will use my American Express card for my grocery purchases, and if gas is not covered by the 5% rewards I will use my BankAmericard for all my gasoline purchases. Yes, it's all about using the right card for the right purchase!

There you have it! I personally earned over $400 in cash back rewards and bonuses in 2013 just using my four credit cards for making my usual purchases. Seriously, even if you use the cards only long enough to collect the $100 bonus for new membership they are worth getting. Another bonus of using credit cards for your everyday purchases is you don't have to deal with the small change you get back when paying with cash (I've still got a huge penny collection myself). Of course, if you want to KEEP your cash back money you need to make sure and pay off your cards each month in full and on time to avoid any late fees or interest payments. Happy rewards shopping and tell 'em Paul Diamond Blow sent you!

LAST NOTE: Never use your credit cards at untrustworthy establishments... like the hot dog stand on the corner or a Russian steam bath. Pay THEM with cash.