If you want to earn cash back on every purchase without the hassle of dealing with a complicated rewards structure, a flat-rate, 1.5 percent cash back credit card is a great option. Read on to see how the current 1.5 percent offers compare.
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With the launch of the American Express Cash Magnet® Card, there are now several credit cards on the market that offer 1.5 percent cash back on every purchase.
Comparing 1.5 percent cash back cards
Once you narrow down that a flat-rate, 1.5 percent cash back card is the right fit for you, there are a variety of other factors you need to consider. See what we found when comparing these cards:
|Introductory bonus||Annual fee||Average yearly earnings ($15,900 spend)|
|American Express Cash Magnet® Card||$0||$288|
|Wells Fargo Cash Wise Visa® Card||$0||$307|
|Chase Freedom Unlimited®||$0||$318|
|Capital One® Quicksilver® Cash Rewards Credit Card||$150 if you spend $500 in the first 3 months||$0||$288|
|U.S. Bank Cash 365 American Express||$150 if you spend $500 in the first 90 days||$0||$288|
|Navy Federal Credit Union Cash Rewards||$0||$272|
|Ultimate Cash Bank card from Santander Bank||$100 if you spend $500 in the first 90 days||$0||$271|
|M&T Visa Signature||$100 if you spend $500 in the first 90 days||$0||$271|
|First National Bank of American Express||$100 if you spend $500 in the first 90 days||$0||$271|
|USAA® Preferred Cash Rewards Visa Signature® Card||None||$0||$238|
|Capital One® QuicksilverOne® Cash Rewards Credit Card||None||$39||$212|
As you can see, typically, cards that offer 1.5 percent cash back also don’t charge annual fees – aside from the Capital One QuicksilverOne Cash Rewards card.
Which card is best?
It depends on what you’re looking for in a card. For example, if you’re interested in earning a sign-up bonus, the USAA Cash Rewards Visa Signature and Capital One QuicksilverOne cards are not the right fit for you. Here are some other factors you should consider:
You want to earn the highest yearly rewards value
If you’re interested in earning the highest yearly rewards value from a 1.5 percent cash back card, the Chase Freedom Unlimited card is your best bet. By our estimates, the average consumer who spends approximately $15,900 each year on purchases, can earn a little more than $318 worth of rewards annually with the Freedom Unlimited card. If you max out the card’s offer of 3 percent cash back on the first $20,000 in purchases in the first year, you can earn at least $600 in cash back with the card in the first year alone.
You plan to carry a balance on your card
If you want to purchase a big-ticket item and pay it off over time, or you just plan to carry a balance on your card (though we recommend that you pay off your balance in full each month), the Capital One Quicksilver Cash Rewards, Amex Cash Magnet and Chase Freedom Unlimited cards offer the longest interest-free introductory periods on purchases among these cards.
With the Quicksilver card, you won’t be responsible for paying interest on purchases for the first 15 months. Once the introductory period is up, the variable APR on purchases is 16.24 to 26.24 percent. The Amex Cash Magnet Card offers a 0 percent intro APR on purchases for 15 months as well, followed by a variable APR of 15.24 to 26.24 percent. The Chase Freedom Unlimited card also offers a 0 percent introductory APR on purchases for 15 months, with a regular variable APR of 17.24 to 25.99 percent.
You plan to transfer a balance
If you have a substantial amount of credit card debt, you may be looking for a card that lets you transfer your balance without charging you interest. The Quicksilver Cash Rewards card, the Cash Magnet Card and the Freedom Unlimited card each offers a generous, interest-free period of 15 months for balance transfers. Once the introductory periods are over, the variable APRs are 16.24 to 26.24 percent for the Quicksilver card, 15.24 to 26.24 percent for the Cash Magnet and 17.24 to 25.99 percent for the Freedom Unlimited.
You don’t want to spend a large sum of money up front
If you don’t want to spend a lot of money up front, in addition to looking for a card that doesn’t charge an annual fee, you should be on the lookout for a card that doesn’t require a large spend threshold to receive the sign-up bonus. Among the cards listed in the table, the Quicksilver Cash Rewards and the U.S. Bank Cash 365 American Express cards require the lowest spend thresholds to earn a $150 sign-up bonus. The Quicksilver card offers $150 after spending $500 in the first three months of card membership, while the Cash 365 card offers $150 after $500 spend in the first 90 days. The Freedom Unlimited’s bonus offer is also a great option, since there’s no spending threshold – you earn the card’s 3 percent bonus rate from the very start.
How about a 2 percent cash back card instead?
We would also note that there are a few flat-rate cards that offer a higher rate than 1.5 percent cash back. For instance, the Citi Double Cash card offers up to 2 percent cash back – 1 percent when you make a purchase and another 1 percent when you pay your bill on time. It doesn’t include a sign-up bonus, so it’s less valuable in the short term, but if you are looking for a great cash back card for the long haul, the Citi Double Cash card could be your best bet.