Looking for the best credit cards? Read this updated article.
Liz Pulliam Weston asked credit card experts for their recommendations for making the most of the rewards that the issuing companies offer. I’ve done well with my Citi Dividend Platinum Select and now my American Express Blue Cash for Business, but it’s interesting to see what is recommended by those who live and breathe credit cards.
Cash back rewards
Cash back is my personal favorite type of reward. The top card picked by the experts is the American Express Blue Cash, which offers 5% cash back on “everyday purchases” and 1.5% cash back on everything else. In order to reach this level of reward, the card requires a total yearly charge of at least $6,500. As Liz points out, if you charge less than $2,500 on the card each month, the Chase Freedom Visa (no longer available) will be a better choice with its offer of 3% cash back on each month’s most charged category and 1% on all other purchases. With this card, you’ll also receive an additional $50 cash back after your first purchase. MSN claims 200 points earns you $250 cash back with this card, so the cash back rebate is effectively 1.25%, but I can’t find any evidence of this.
The runners up in the cash back category include the Citi Professional Cash Card and Discover Motiva. I still run across some stores that don’t accept Discover Cards, so that wouldn’t be my choice if you intend on carrying only one card.
Savings rewards
If you’re saving for a child’s future education, a number of cards offer options that provide savings incentives each time you charge. The Fidelity Investments 529 College Rewards American Express Card is the clear winner, particularly for an investor with a 529 education savings account at Fidelity. 1.5% of your purchases, up to $1,500, are credited to your 529 account annually.
I formerly used a Citi Upromise MasterCard, the runner up in this category. With this card, 1% of all purchases is deposited into a holding account at Upromise which can later be invested in a 529 or returned to you in the form of a check. The latter was my option. In addition to the 1% rebate, the Upromise card is also now offering 2% on ExxonMobil purchases and 10% cash back on certain supermarket and grocery store items.
Cards honorably mentioned by the experts on MSN include the Citi Home Rebate Platinum Select MasterCard, GM Flexible Earnings and NestEggz Platinum Visa Card. This is the first I’ve heard of the NestEggz Card, which offers a 1% rebate and a $25 incentive for using the card, to be deposited into a qualifying retirement account.
Summary: MSN’s 15 credit cards with the best rewards
- American Express Starwood Card (Travel)
- Diners Club MasterCard (Travel)
- American Airlines AAdvantage® MasterCard (Travel)
- United Mileage Plus Visa (Travel, no longer available)
- Choice Privileges Visa (Travel)
- Citi PremierPass Elite MasterCard (Travel)
- American Express Blue Cash (Cash Back)
- Chase Freedom Visa (Cash Back, no longer available)
- Citi Professional Cash Card (Cash Back)
- Discover Motiva (Cash Back)
- Fidelity Investments 529 College Rewards American Express Card (Savings)
- Citi Upromise MasterCard (Savings)
- Citi Home Rebate Platinum Select MasterCard (Savings)
- GM Flexible Earnings (Savings)
- NestEggz Platinum Visa Card (Savings)
For more current information, view the best credit cards available today.
Updated February 22, 2017 and originally published January 8, 2008.
{ 12 comments… read them below or add one }
I have a Chase Freedom Card, and I can verify the information is correct. If you save $200 worth of cashback rewards you can redeem it for a $250 check.
The Fidelity 529 Rewards American Express has been great so far for us. We earned $122 last quarter. In addition, you can open a Fidelity 529 account but you don’t have to fund it – just let the AMEX rewards add up.
Ross: That’s good to know — thanks!
I’ve had the American Express Blue Cash for around three months now. I have spent around 2500 dollars and the last time I checked my cash back amount was $ 1.73.
I’m not impressed thus far and AMEX refuses to disclose where to shop for the best cash back rate. I emailed them and they responded that they had no idea what their own cashback tiers were for various stores.
Lame.
I like the 529 idea a lot and since I’m earning chump change with AMEX Blue I might as well switch to that. It seems like an easy way to fund your child’s future and make it automatic!
Within the next year I am going to be making a very substantial single purchase (Engagement ring).
I have very good credit and am not worried about the temporary “ding” for opening another card; which card would give me the largest cash-back amount for that single purchase? Many cards seem to have a “cash back in sectors you buy often in” like groceries, but this will be my only purchase in the “jewelry” sector this year :p. Also, some cards seem to have a maximum to the monthly cashback you can get, which I’d want to avoid.
Thanks in advance.
I’ve been using the Amex Cash Rebate Card for the past 2 years, which is the same exact deal as the Amex Blue Cash Card, and the results are amazing! I’ve spent $31,500 through all of 2007, and my cashback reward is $550 that I just got credited back! This is on all of the stuff I *need* to buy on a daily basis, plus, some miscellaneous company expenses that bumped me over the 5% cashback reward level for gas, drugstore, groceries. It’s absolutely critical at the very beginning of the year to exceed $6500 minimum expenses!! That way all your additional expenses will incur rewards at the much higher reward levels. Learned that the hard way in 2005.. You have to properly plan how much you need to spend in order for these rewards to show up in your account next year.
I was going to verify this too, but I was beat
The author gives terrible advice when suggesting that the Chase Freedom Card is the best card for those who charge less than $2500 per month. The 3% cash back for this card is capped at the first $600 total charged each month…the remaining $1900 would only get 1% cash back. Amex Blue Cash would be a much better choice.
For Cheapster Bob (Comment #4)…read the terms and conditions of the card…. it’s not rocket science.
Has anyone noticed the promotional offer that Citi Dividend Platinum Select has going? New customers get 5% cash back on select purchases for 6 months, not the 2% that long standing customers like me are getting. I called to ask if I could receive the promotional offer as a reward for customer loyalty and as an incentive to keep the card, pointing out that other cards offered higher regular rewards than Citi Platinum now does, but they refused to extend the promotional offer to existing customers. Has anyone else had better luck than I have had?
I have some random card through household bank (hsbc behind the scenes) that gives 2% on everything up to 400 cashback/year (I think it’s a stretch for me to charge up 20K anyway). But I just got it the offer randomly…not sure you can directly apply for it.
I’m a big fan of the Schwab Invest First card which gives 2% cash back on all purchases, automatically deposited into your Schwab brokerage account with no minimum or maximum. Also, having the card eliminates minimum balance requirements on some accounts, IIRC.
I'm a big fan of the Schwab Invest First card which gives 2% cash back on all purchases, automatically deposited into your Schwab brokerage account with no minimum or maximum. Also, having the card eliminates minimum balance requirements on some accounts, IIRC.