Are you trying to figure out which credit card offers the best rebate? Simple solution: Take the cash and run.
It couldn’t be easier than this. With a cash rebate, you get either a check in the mail or a credit on your statement, so you don’t have to weigh the relative benefits of airline miles versus a new set of luggage. To find the best deals, we simplified the process by assuming that you spend $33 on gas each week, $100 a week on groceries and $1,000 per month on other purchases.
Tops is the Citi Dividend Platinum Select card (at . It charges 11.74% and offers rebates of 5% on purchases at supermarkets, drugstores and gas stations and 1% on everything else. However, Citi caps its annual rebate at $300, which you would reach in about eight months under our scenario (at that point you could switch to another card). Exempt from the cap are goods bought through Citi’s Dividend Merchant Network, which includes more than 200 retailers, catalogs and Internet sites. Those purchases earn rebates between 5% and 7%.
Next up is the National City Everyday Rewards Elite Visa card (at , on which our yearlong spending spree would earn a rebate of $270. National City is unique in bundling restaurants with grocery stores in a single category, with rebates of 2%. With an interest rate of 10.49%, the card rebates 4% on gas, 3% on movies and up to 1% on everything else. There are spending caps in some categories.
The American Express Blue Cash card (at www.americanexpress.com) carries an interest rate of 11.24%. It gives you up to 5% on groceries, gas and drugstore purchases, and up to 1.5% on the rest of your charges, up to a maximum expenditure of $50,000. Total rebate in our example: $266.
The Capital One No Hassle Cash card (at www.capitalone.com) offers a rebate of up to 3% on gas and groceries and 1% on everything else you buy, with no dollar limit and a relatively modest 9.9% interest rate. You would earn an annual reward of $237 in our scenario.
The Chase Free Cash Rewards Platinum Visa card (at , which carries an interest rate of 11.99%, gives you one point for every dollar spent on purchases (with a $60,000 spending cap). In addition, it has an interesting twist: a one-point bonus for every dollar you pay in interest. Each time you accrue 2,500 points, you receive a check for $25. Without the interest bonus, you’d be eligible for a rebate of $189, so the card is more attractive for card users who often carry a balance.
When saving for an emergency fund – you just can’t go wrong with cash!
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