While I always love long-term investing with high-yield dividend stocks, I’m also a huge fan of maximizing the rewards you can get from the cash back credit & debit cards. This only works if you’re responsible and confident with paying off credit card balances every month. With a little planning, you can easily get 5% cash back on purchases you’d normally be making anyway. Cards that are very attractive right now (in order of my own interest) include the following:
- US Bank Cash+ Visa Signature (5% cash back on rotating categories you can pick yourself, 1% cash back on everything else, additional bonuses included)
- Discover More Credit Card (5% cash back on fixed rotating categories (gas, food, etc.), 1% cash back on everything else, plus a nice redeeming system for additional savings)
- Chase Freedom Visa (5% cash back on rotating categories, 1% on everything else, great signup $100 signup bonus, excellent redeeming system)
- PerkStreet Debit Card (1% cash back on everything, 2% cash back for online purchases, 5% cash back on PowerPerks rotating categories)
- Capital One Cash Rewards (1% cash back on everything, plus 50% back on the cash earned… averages out to 1.5% back overall.. good for “hands off” users)
I’ve owned the Discover More Card for about 3 years now, and without much effort I’ve been getting anywhere from $300 to $500 in rewards every year. I use these rewards to get even further discounts on renewing my Sams Club membership cards ($40 for a $50 membership), paying for items on Amazon.com, buying gift cards for my favorite restaurants, etc. And I think that when you can get 5% cash back on gas for 3 months straight (there is a limit on how much money can be applied), along with 5% cash back on other major categories such as supermarket spending, restaurants and travel, I think the Discover More card is a great one to have in your wallet.
I also own the PerkStreet Debit Card. PerkStreet provides you with free checks when you get started, and the account provides a lot of flexibility to withdraw money from various ATMs, while still allowing you to get 1% cash back on all purchases. 2% cash back applies for certain online purchases, and there are some 5% rotating PowerPerks categories every month. The debit card comes with a PIN number, but when you apply it as a credit card transaction (it’s a Mastercard), the cash back system goes into effect. PerkStreet recently upgraded their PowerPerks system this month, and I’m hoping the options will get a lot better. Personally, however, I have a love/hate relationship with PerkStreet, because they started out with a 2% cash back program on all purchases and then downgraded to a 1% system in the middle of 2012. Because of this, I’m looking to replace the card with a new one that gets 5%.
And that new 5% card is the US Bank Cash+ Visa Signature card. It looks like a great card! Once I can become more familiar with the program, I can provide further information, but the part that sounds the most exciting is the fact that IF you can stand to let your cash-back balance grow without redeeming it right away, US Bank will bump your rewards percentage up to 6.25%. I also really like how you can select your own 5% categories, and I imagine this could really help to remember what the categories are. This always seems to be an issue for me with the Discover More card since I always forget how many months certain categories last, etc.