When you’re looking for a card to use for smaller purchases, consider one that offers a flat rewards bonus on every purchase or offers an unusually high bonus on some of your most common small dollar purchases, such as fast food or beverages. And be sure it doesn’t charge an annual fee.
If you typically use cash rather than credit to pay for small dollar purchases, your penchant for paper money is well within the norm.
According to a recent survey by CreditCards.com, most people prefer to use cash or debit when paying for purchases that cost less than $10. But if you regularly stop for coffee runs or pick up fast food during your lunch hour, you could be surprised by how much money you’re leaving on the table by forgoing a rewards credit card.
Depending on the card, a daily $4 frappuccino habit, for example, could net you anywhere from seven free frappuccinos a year (around $29 in cash) to roughly $36 in Starbucks gift cards, which is enough to purchase around nine frappuccinos.
Similarly, a $10 fast-casual lunch every week day could earn you as much as $52 to $104 in cash back – enough to buy you up to two weeks’ worth of free lunches at Chipotle.
Not every card is ideal for small dollar purchases, though. Many rewards cards will only award you 1 point per dollar spent or 1 percent cash back on miscellaneous purchases. When you’re looking for a card to use for some of your smaller purchases, consider a card that offers a flat rewards bonus on every purchase or offers an unusually high bonus on some of your most common small-dollar purchases, such as fast food or beverages.
With that in mind, here are the best no annual fee cards for purchases that cost around $10 or less.
Best no-annual-fee credit cards for small purchases
This unusual rewards card rounds up cardholders’ point earnings to the nearest 10, making it a great card to use on your smallest purchases. (Citi’s ThankYou points can be redeemed for airfare, hotels, cruises, gift cards or loan payments at a value of at least 1 cent per point, according to The Points Guy.)
For example, if you buy a $2 pack of gum or a $1.50 Slurpee, you’ll receive a whopping 10 points just for that one purchase. If you spend $11 on lunch, you’ll get 20 points. There’s currently no other no annual fee card on the market that offers that many points for miscellaneous purchases that cost less than $3.
A good pick for cardholders who like to eat out or order in, the Uber Visa awards an industry-leading 4 points per dollar spent back on every dollar you spend on dining and UberEats. Since fast food orders count as dining, you’ll receive 4 points per dollar spent back on even your smallest food purchases. Bars also count as a dining purchase, so it’s a good card to use for happy hour or for a quick visit to your neighborhood bar.
Similar to the Uber Visa credit card, the SavorOne card also offers an unusually high rewards rate on dining purchases, including 3 percent cash back on café and bakery purchases, fast food purchases and spending at lounges and bars.
You’ll also earn 3 percent cash back on entertainment, including record stores, movie tickets, bowling alleys and more. In addition, you’ll get 2 percent cash back at grocery stores, so it’s a good card to use when you’re making a quick stop for toiletries, dish soap or other small purchases.
A great pick for cardholders who prefer a simpler way to earn additional cash, the Citi Double Cash card offers up to 2 percent cash back on everything you buy (1 percent when you spend, and another 1 percent when you pay off your charges). As a result, you can use it all on your smallest purchases without worrying about whether you’ll receive a bonus on your earnings.
This is currently one of the most generous cash back cards for small purchases – at least for the first year. For the first $20,000 you spend, you’ll receive 3 percent cash back on every purchase. So, if you regularly spend around $5 a day on coffee drinks, you could potentially earn up to $55 in your first year. Once you’ve spent $20,000 (giving you $600 in earnings), you’ll receive 1.5 percent cash back.
Similar to the Chase Freedom Unlimited, the Discover it® Miles card offers an outsized amount of value in the first year. But unlike the Freedom card, it doesn’t limit how much you can earn. Instead, you’ll be awarded an unlimited 1.5 miles for every dollar you spend.
Unlike most credit cards, the Bank of America Cash Rewards card lets you choose which purchases earn maximum cash back. If you choose to receive 3 percent cash back on dining, you’ll receive a 3 percent bonus on a wide variety of dining and beverage purchases, including fast food, coffee, alcoholic drinks and more.
You can also choose to get 3 percent cash back on drug store purchases instead. In addition, you can get 2 percent cash back at grocery stores. However, Bank of America caps your bonus spending at $2,500 per quarter. So if you’re an otherwise heavy spender, you may want to use a different card.
See related: Best credit cards for streaming services
When not to use a credit card
The rewards you earn from small dollar purchases can add up quickly – especially if you use the right card. However, there may be some instances when you’re better off using cash or debit instead.
For example, if you’re visiting a local business and want to help support them, use cash instead of a card so that the business isn’t charged a transaction fee. Credit card issuers typically charge merchants a hefty fee each time you use your credit card, and those fees can take a big hit out a business’s profits.
It’s also not worth using a card if you’re charged a convenience fee or if you have to buy something you don’t need in order to use a credit card. Some businesses, for example, won’t let you use credit unless you spend a certain amount.
Finally, don’t use a card for everyday purchases if you carry a balance and can’t afford to pay off those purchases in full. The rewards you earn aren’t worth the extra debt.