Which is the best cash back credit card?

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When I first got into miles and points, I wasn’t particularly interested in manufactured spending. Odd for a guy who works for the blog that wrote the Complete Guide to Manufactured Spending, right? But as someone who got started in this hobby as a reseller, I wanted to earn a profit + points, not pay for points. Of course, last fall I wrote about how you’re always paying for points by way of opportunity cost. Every point you chose to earn costs you what you could have earned in cash back. We write a lot about various types of rewards cards, but if using those cards comes at the opportunity cost of earning cash back, what is the best cash back card? It turns out that’s not an easy question to answer…

Many ways to evaluate “the best”

As with anything opinion-based, “the best” is highly subjective. But with anything numbers-based, we can at least kick around the data to make informed decisions. But still, in order to compare, you first have to decide which metric determines “the best”. Is it the card with the best welcome bonus? The one with the highest return on everyday spend? The one with the biggest category bonus for the category in which you spend the most money? Perhaps it should be the card that earns the biggest new cardmember bonus with good category bonuses and points that can be redeemed for cash back or miles at your leisure? It gets complicated to answer.

While we keep a lot of objective data in spreadsheets and can do a lot of numerical comparisons with it, a back-and-forth conversation last week led me to the conclusion that we just don’t have a good way to directly compare all of the cards that earn cash back or a currency that can be redeemed for cash. If you’re looking for the Top 10+ Airline card bonuses or the Top 10+ Hotel card bonuses or the Best Rewards for Everyday Spend, we have pages for those. If you want to know which cards earn the Best Category Bonuses, we maintain a comprehensive list there, too. But the best cash back card is a hard winner to crown.

In this post, I’ll try to compare the “best” cards under a few different metrics with the goal of giving some food for thought. With old MS options dying and new ones popping up, I’m sure there are some who will be interested in ways to get the most bang for their buck.

For the purposes of this post, I’m going to maintain the following parameters for simplicity:

  1. I’ll only compare cards available for applicants now (not old cards that are no longer available for new applicants)
  2. I’ll only compare cards that earn actual cash back or a form of points that can be redeemed directly for a value of $0.01 each. That means that you’ll see the Chase Ultimate Rewards cards included below (since points can be redeemed for a statement credit or check at a value of $0.01 each), but you won’t see the Capital One Venture card (since you can only redeem for $0.01 each towards travel purchases, which isn’t quite the same for those looking primarily for cash back).

So, which is best? Here are some of the best. To learn more about any card in this post, simply click the card name to go to the Frequent Miler card page, where you’ll find all of the pertinent card details. Those individual card pages are also where you’ll find application links to each card.

Note: you’ll see both business and personal cards represented below.

Applying for Business Credit Cards

Yes, you have a business: In order to sign up for a business credit card, you must have a business. That said, it's common for people to have businesses without realizing it. If you sell items at a yard sale, or on eBay, for example, then you have a business. Similar examples include: consulting, writing (e.g. blog authorship, planning your first novel, etc.), handyman services, owning rental property, renting on airbnb, driving for Uber or Lyft, etc. In any of these cases, your business is considered a Sole Proprietorship unless you form a corporation of some sort.

When you apply for a business credit card as a sole proprietor, you can use your own name as your business name, use your own address and phone as the business' address and phone, and your social security number as the business' Tax ID / EIN. Alternatively, you can get a proper Tax ID / EIN from the IRS for free, in about a minute, through this website.

Is it OK to use business cards for personal expenses? Anecdotally, almost everyone I know uses business cards for personal expenses. That said, the terms in most business card applications state that you should use the card only for business use. Also, some consumer credit card protections do not apply to business cards. My advice: don't use the card for personal expenses if you're not comfortable doing so.

The best quick hit (highest welcome bonuses)

Sometimes, you’re just looking for a quick bump for your bank account. If you are looking to build your bankroll, these are the cards you should probably consider right now, though note that bonuses fluctuate. For example, the highest cash back welcome bonus that comes to my mind over the past year or two was when the Capital One Spark Cash card offered a bonus $1,000 after $10,000 spend (which meant a total of $1,200 after meeting spend since you’d also earn 2% cash back on the $10K spent — that offer has long since expired, but people occasionally receive targeted mailers). We haven’t seen that bonus return in quite some time, but it’s worth noting that an offer like that comes around now and then.

But at the moment, here are the options worth considering:

1) Chase Ink Business Preferred

The Chase Ink Business Preferred Card currently has the highest cash back welcome bonus available via our Best Offers page. Personally, I’d rather use Ultimate Rewards to transfer to airline partners, but you could redeem these points for cash back via check / statement credit at a rate of $0.01 per point (in other words, 80K = $800).

2) Cards with a $500 welcome bonus

At the time of writing, several cards offer a $500 welcome bonus or its equivalent in points, including:

Wells Fargo Visa Signature Card
Up to 50K bonus points
5X rewards points on up to $12,500 in gas, grocery, and drugstore purchases for 6 months. (that's 1x normal earnings plus 4x bonus)

No Annual Fee

Capital One Spark Cash Business Credit Card
$500 Cash back
Earn a one-time bonus: $500 after $4.5K spend in 3 months

No Annual Fee First Year, Then $95

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: Up to $2,000 Cash Back: Earn a one time bonus: $500 after $5K spend in 3 months from account opening and earn an additional $1,500 when you spend $50K in the first 6 months of account opening [Expired 1/27/20]

However, the above offers are the biggest bonuses — but how about considering them proportionally? If you’re planning to open many credit cards, you might be more interested in knowing which ones offer the biggest bonuses in proportion to minimum required spend.

The best welcome bonuses in proportion to required spend

If you’re looking for the biggest bang for your buck, you might consider the best cash back cards to be those that offer the largest bonus in proportion to the spend required to trigger them, therefore quite literally giving you the biggest return on every dollar spent. Note that the “best” cards here will have relatively low spending requirements and bonus amounts, but it’s pretty easy to imagine knocking off several at once.

40% back on minimum spend

30% back on minimum spend

25% back on minimum spend

Blue Cash Preferred® Card from American Express
$250 Cash Back
$250 cash back after $1K in the first 3 months. Terms Apply.

$95 Annual Fee

The best for the first year (highest first-year value)

Each of the above thus far takes into consideration the bonus earned from meeting the minimum spending requirements. However, it completely ignores the fact that some cards have an annual fee and/or come with additional perks of value. You’ll see that all of the cards listed above (and all of the cards on our Best Offers page) list a “first-year value” number. That number is based on a number of factors (see this post for a more complete explanation) including the opportunity cost of putting minimum spend on that card and an objective value of perks like statement credits, etc.

However, our spreadsheets are coded to display and rank cards based on our Reasonable Redemption Value of the points that they earn. In the case of Ultimate Rewards cards, for example, we value each point at 1.82 cents since they are transferable to a wide range of partners, giving you the ability to cherry-pick opportunities for more than 1 cent per point in value. Each point on the Wells Fargo cards or the US Bank Altitude Reserve is valued at 1.5 cents since points can be redeemed at those rates against travel. That’s great for apples-to-apples comparison with other point programs, but it creates skewed first-year values if what you’re after is cash back.

While the cards below display the first-year value based on our Reasonable Redemption Values, I’ve ordered them here based on first-year value if those points were only redeemed at $0.01 each. Here are the top 5 in terms of first year value:

Capital One Spark Cash Business Credit Card
$500 Cash back
Earn a one-time bonus: $500 after $4.5K spend in 3 months

No Annual Fee First Year, Then $95

Info about this card has been collected independently by Frequent Miler. The issuer did not provide the details, nor is it responsible for their accuracy.

Recent better offer: Up to $2,000 Cash Back: Earn a one time bonus: $500 after $5K spend in 3 months from account opening and earn an additional $1,500 when you spend $50K in the first 6 months of account opening [Expired 1/27/20]

Note: Depending on how much you will spend in the first year, the Discover cards may also be worth consideration since they double all cash back earned in the first year. That makes the Discover It Miles card effectively a 3% cash back card for the first year since points can be redeemed for $0.01 each.

Discover it Miles - Double Miles your first year
$100 + First Year Double
Get $100 after first purchase. All "miles" earned in first 12 months will be doubled. This makes this a 3% cash back card for the first year.

No Annual Fee

On the other hand, if you max out the 5% categories each quarter on the Discover IT card, you could earn up to $600 cash back on $6,000 spend without an annual fee, which is also an excellent first-year deal.

Discover it®
$50 + First Year Double
Get $50 after first purchase. All cashback earned in first 12 months will be doubled including 5% earned in rotating categories.

No Annual Fee

The best for ongoing spend

The best for those with deep pockets may be quite different than the cards mentioned above. Of course, if you spend enough to naturally meet multiple minimum spending requirement bonuses, your best bet is to consider opening multiple cards. However, if you prefer a simpler solution that simply offers the best ongoing return for every dollar spent, consider these two options

1 – Bank of America Premium Rewards (with Platinum Honors)

While this card ordinarily earns the equivalent of 1.5% cash back on everyday purchases, that bumps all the way up to 2.625% back on everyday purchases if you have Bank of America’s Platinum Honors (achieved by having $100K or more in investments / cash on hand with Bank of America / Merrill Lynch).

2 – Alliant Cashback Visa

This card earns 3% cash back in the first year, followed by 2.5% cash back in subsequent years. If you spend more than $12,000 per year, you’ll come out ahead with this card over a 2% cash back card even after factoring in the ongoing $59 annual fee (waived the first year)

3 – The 2% cards with no annual fee

Citi Double Cash Card

Recent better offer: None

Bottom line

As you can see, determining the “best” cash back card isn’t necessarily simple. Depending on the way you measure the “best”, the list of cards you should consider could be quite different. The above doesn’t even take into consideration specific category bonus spend, which gets even more complex to compare. For example, if you spend a lot at restaurants, you may be best off with the Uber Visa card (4% back at restaurants) — though if you’re able to pick up a couple of rotating-category cards, you may be able to eek out 5% in some quarters (or 10% after Discover’s first-year double). Determining the best is an individual calculation in many ways. However, the good news is that there are a lot of options. If you’re less interested in miles and more interested in padding your bank account with some extra cold hard cash, you should have access to good cash back bonuses for a long time to come.

Which do you think is the best cash back credit card?

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