Cash back on other purchases
When not treated as a qualifying purchase for an enhanced rebate, purchases will garner the lower cash-back payout. The typical cash-back rate comes to 1 percent for all purchases, or in points, 1 point per dollar spent.
A few cards in our survey have 1.25 percent or 1.5 percent cash back. The TrueEarnings card from Costco and American Express delivers the highest return at 2 percent back on travel, but just 1 percent back on everything else that isn't travel or an everyday purchase. Everyday purchases earn 3 percent with this card.
The cards that have 1.25 percent or 1.5 percent cash back have reward tiers. With a tiered cash-back card, you won't start earning the higher payout until you spend a certain amount on the card. For instance, to get the higher rate of 1.5 percent cash back on all other purchases using Blue Cash from American Express, you have to spend more than $6,500. Before that, you'll earn a mere 0.5 percent.
Tip: Consider your spending habits to see whether a tiered card would benefit you. "Big spenders can potentially see their rewards increase exponentially by picking a tiered card that is consistent with their spending habits," says Greg McBride, senior financial analyst for Bankrate.com.
To find out when you would hit the higher tier for other purchases, use our work sheet, "What's the best cash-back card for you?"
Cash back on other rebates
Thirteen of the cards surveyed have a bonus payout for special behavior. These bonuses vary from rebates on balance transfers, interest payments and cash advances to additional cash back on purchases made through the card company's exclusive shopping site and redemption bonuses. For instance, Capital One's No Hassle Cash Rewards MasterCard for those with average credit has a 25 percent annual bonus on cash earned during the year.
Cash-back Discover cardholders using the company's exclusive shopping Web site can earn 5 percent to 20 percent back on their online purchases.
Tip: Unless the terms of the balance transfer prove better than other cards, don't make a balance transfer to earn cash back. The costs will eat up any reward you earn.
Cards offering rebates for revolving balances and cash advances shouldn't entice you either, because the interest charges will swallow your savings. "What sense does it make to revolve a balance at 12 percent interest for the sake of a 1 percent rebate?" asks Greg McBride, senior financial analyst for Bankrate.com. "Even if you revolve the balance for only one month, the interest charges negate your rebate. Consumers that carry credit card balances, even occasionally, should focus on getting the lowest possible interest rate and accelerating debt repayment."