Recently, I’ve been thinking more and more about how to leverage the use of cash back cards for travel. Sure, some people simply want a cash back card because they’re not interested in travel but that’s clearly not who I am — and, I doubt many of you are either.
While I mostly focus on earning flexible points with Amex, Chase or Citi, having cashback to take care of an Airbnb or boutique hotel stay can be very useful. It can even help with cheap intra-region flights that can’t be booked as awards.
Some of you might even find that earning cash back is a great way to designate some cash for your travel fund so you can splurge on a nice dinner or two during your vacation.
With these things in mind, I want to take a look at some of the best cash back card options by bonus category.
Best card everyday spending
While there are a number of cash back cards that come with bonus categories, we often have plenty of spending that doesn’t fall under one of these categories. Rather than earn just 1% back on these purchases, you should be earning at least 2%.
In fact, with the Alliant Cashback Visa® Signature Credit Card, you can earn 3% cash back on all purchases during your first year with the card. Each year after that, the Alliant Cashback Visa will earn 2.5% on all purchases.
When you consider that 3% and 2.5% are better earn rates than even some bonus categories with other cards, the $59 annual fee (waived the first year) could easily be worth it.
Now, if you’re looking for a simple cash back card with no annual fee, the Citi® Double Cash Card earns 2% cash back on all purchases. You’ll earn 1% cash back after each statement closes and another 1% back after you’ve paid your balance.
Best card for dining
I’ll be honest, outside of a cash back card for everyday spending and perhaps groceries — we’ll talk about that in a minute, I didn’t give much thought to the options out there. However, Capital One caught my eye when they revamped a cash back card option.
The Capital One® Savor® Cash Rewards Credit Card now earns a 4% return on all dining purchases whether in the US or abroad — unlike the American Express® Gold Card, which only earns 4X at US restaurants.
Alternatively, the Capital One® SavorOne℠ Cash Rewards Credit Card earns 3% and doesn’t have an annual fee.
If you link either of the Capital One Savor cards to the Dosh app, you can get a serious return on your spend. I don’t know about you but I’d happily stack 4% or 3% from a credit card with perhaps 5% from Dosh. You might even be able to stack with an airline dining rewards program, but I haven’t tried in quite some time.
Best card for entertainment
When Capital One bumped up the dining category to 4% on the Capital One® Savor® Cash Rewards Credit Card, it also added entertainment as a 4% bonus category. Capital One considers tickets to the following as entertainment purchases:
- Sporting event
- Tourist attraction
- Theme park
- Dance club
- Pool hall
- Bowling alley
You can also earn 4% cash back on purchases from record stores and video rental locations — RIP Blockbuster.
Best card for gas
The best cash back card for gas isn’t quite as straightforward as some of the other categories. The Costco Anywhere Visa® Card by Citi earns 4% on the first $7,000 at gas stations per calendar year, while the Sam’s Club Mastercard earns 5% on the first $6,000 per calendar year.
Not to mention two cards from credit unions that earn 5% cash back:
- Fort Knox Federal Credit Union Visa Platinum
- Ducks Unlimited Visa by First Bankcard
For some, the Bank of America® Cash Rewards Credit Card might actually provide the best return. This card earns 3% cash back on gas and 2% at grocery stores and wholesale clubs up to $2,500 combined per quarter.
However, if you have significant savings or investments with Bank of America, you can receive a bonus on the cash back you earn. Here’s a breakdown of the bonus you can receive based on how much money you keep with Bank of America.
If you factor in the 75% bonus for Platinum Honors status, you could earn 5.25% back on up to $2,500 spent at gas stations per quarter. Just remember that purchases at grocery stores and wholesale clubs will count toward your quarterly bonus category cap of $2,500.
Best card for groceries
When it comes to grocery stores, the Blue Cash Preferred® Card from American Express has long been a favorite for those looking for cash back. While the bonus category is capped at $6,000 in spending per calendar year, you can get a return of 6% cash back. That’s up to $360 in cash back per calendar year.
There are also several cards from credit unions that offer 3% cash back including:
- Bellco Visa Platinum Rewards
- Consumer Credit Union Visa Signature
- Golden1 Platinum Rewards Visa
- Huntington Voice ($2,000 spend cap per quarter)
- Santander Bravo ($5,000 spend cap per quarter)
- UMB Simply Rewards USA
The methods for redeeming cash back at these credit unions vary so make sure you understand the terms of a given card if you choose to get one.
Best card for travel
The recently launched Wells Fargo Propel American Express® Card is a cash back or fixed-value points card depending on how you use it. Either way, you’ll earn 3X Go Far Rewards points on travel purchases which include:
- Passenger rail
- Car rentals
- Travel agencies
- Discount travel sites
- Passenger trains
If you also have the Wells Fargo Visa Signature card, you can get 1.5 cents per point when redeeming for travel. If you spend $50,000 on the Wells Fargo Visa Signature, you’ll get 1.75 cents per point.
However, if you’re just looking for cash back, each point will be worth 1 cent per point which means you’ll earn 3% back on travel purchases. Not bad for a card with no annual fee.
Best quarterly bonuses
Ahh, quarterly bonuses. I haven’t met anyone who doesn’t get at least a little excited about the quarterly bonuses offered by the Chase Freedom and Discover It cards. Each of these cards offers quarterly 5% bonus categories that often include:
- Department stores
- Wholesale clubs
Both the Chase Freedom® and Discover It allow you to earn 5% on quarterly bonus categories on up to $1,500 in spending. After that, you’ll only earn 1% back on your purchases.
While the Ultimate Rewards points you earn with the Chase Freedom can be paired with a premium card if you want to transfer points to airline and hotel partners, you can choose to just earn cash back.
As with cards that earn flexible points and airline or hotel points, we’re seeing issuers offer better bonus categories on cash back cards. If you want to earn cash back, you really shouldn’t be earning less than 2% on any given purchase.
As I mentioned at the top, cash back is an easy way to offset some travel expenses not covered by points and miles. Just make sure you’re maximizing your cash back rate of return so you can get the most out of your spend
If you’re currently using a card that earns 1% cash back, just put it down. It’s time to make a change.