While I believe almost everyone should have a no-annual-fee 2 percent cash back credit card, there are some instances in which a card with a seemingly lower payout can actually provide more value, at least for a period of time. Here’s what you need to know.

When 1.5 percent is better with Chase

The Chase Freedom Unlimited® has a base rewards rate of 1.5 percent cash back on all purchases, but it does even better in certain categories. Cardholders earn 5 percent cash back on travel booked through Chase Ultimate Rewards and on Lyft rides (through March 2025), plus 3 percent cash back on dining and at drugstores. If you spend a lot in those categories, that could potentially boost your overall cash back earnings over 2 percent.

If you also have a Chase card that allows you to transfer Ultimate Rewards points to airline and hotel partners — the Chase Sapphire Reserve®, Chase Sapphire Preferred® Card or Ink Business Preferred® Credit Card — you can get even more value from your Freedom Unlimited rewards. That’s because you can combine Ultimate Rewards points earned across various cards, and when you transfer points to airlines and hotels, you might be able to get significantly more than the standard 1 cent per point.

For this reason, Bankrate’s point valuation estimates Ultimate Rewards points at 2 cents apiece. Sometimes you can get even more value if you find a sweet spot in an airline or hotel award chart. If you earn the base 1.5 Ultimate Rewards points per dollar on your Freedom Unlimited card and you pair it with a transferable points card and get 2 cents per point, you’ve achieved an effective 3 percent return on that spending — double the standard cash back value.

The Freedom Unlimited also has generous purchase protection, extended warranty coverage and trip cancellation/interruption insurance. It’s a really versatile card that’s one of the most valuable no-annual-fee options on the market. Finally, it comes with a great welcome bonus: Earn an additional 1.5 percent cash back on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back!

When 1.5 percent is better with Bank of America

Bank of America has two credit cards with no annual fee that give 1.5 percent cash back on every purchase. The simplest is the Bank of America® Unlimited Cash Rewards credit card, which does exactly that. There’s also the Bank of America® Travel Rewards credit card, which comes with the added stipulation that cardholders must redeem for statement credits that offset eligible travel or dining purchases.

On both cards, your 1.5 percent rewards rate could grow to as much as 2.625 percent if you have at least $100,000 in deposits or investments with Bank of America or Merrill Lynch. The bank’s Preferred Rewards program boosts your credit card rewards by 75 percent at that top tier, by 50 percent if you have between $50,000 and $99,999 in eligible deposits or investments and by 25 percent if you have between $20,000 and $49,999. If you’re a loyal customer, that means you could get 2.625 percent, 2.25 percent or 1.875 percent, respectively, in cash back or statement credits.

The travel version comes with a slightly higher welcome bonus: 25,000 points worth $250 after spending at least $1,000 in your first 90 days. That compares with a $200 statement credit after spending $1,000 in your first 90 days with the Unlimited Cash card.

When 1.5 percent is better with Discover

Discover’s typical sign-up bonus is to double all of the cash back a new cardholder earns in their first year. On the Discover it® Miles card, that means an effective 3 percent cash back on everything for 12 months. And while the card is marketed as a travel card and these miles can be used to offset eligible travel purchases, they can also be used for more straightforward cash back redemptions. Regardless of how you redeem, you get 1 cent per mile. What seems like a 1.5 percent cash back card actually gives an effective 3 percent cash back on all purchases made in that first year.

The 2 percent cash back cards

Don’t get me wrong — I still love 2 percent cash back cards with no annual fee, such as the Wells Fargo Active Cash® Card (earns 2 percent cash rewards), the Citi® Double Cash Card (which technically gives 1 percent cash back when you make a purchase and another 1 percent when you pay it off) and the PayPal Cashback Mastercard®. These all offer a solid, straightforward return.

If you want to keep it really simple, you could achieve a favorable outcome by using one of them for all of your spending. Or if you’re willing to take on a bit more complexity in exchange for a higher benefit, you can incorporate other cards with better rewards in certain categories (but lower in others, which is where the 2 percent cash back cards factor in as a strong foundation).

But as you can see, there are also some instances in which a 1.5 percent cash back card could potentially be even better.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.