Credit cards rewards are complicated. How do you find the right cash back credit card for you?
Type “Best credit card for…” into Google and look at the results. It feels as though there are a million best credit cards. How can that be?
Best credit cards for gas. Best credit cards for groceries. Best credit cards for restaurants. Best credit cards for travel. Best credit cards for cash back. Best credit cards for balance transfers.
Which is truly the right cash back credit card for you?
It feels impossible to navigate. Should you calculate your spending, crunch the numbers, estimate the rewards, and move to the next card? Repeat and compare until you want to pull your hair out.
No thank you.
I wanted a simpler way to make the decision based on my spending – not based on a description of credit cards. I wanted to make my decision based on the numbers.
Instead of crunching the numbers repeatedly, I built a tool that analyzes popular cash back credit card rewards. My purpose was to analyze which credit card would be best for long-term spending when you pay your credit card balance in full each month. With this tool, I assume you are paying your credit card off each month, which means no interest is paid.
Initially, I was not going to factor bonus rewards into my analysis, but I thought that would be important to some people, so I included it. The rewards can be lucrative.
I don’t like opening credit cards each year because I find it difficult to track them. I prefer to use one primary credit card and one as a backup. There are people who do a great job staying up-to-date on bonus offers. I’m not one of them.
As such, I split out the analysis by best first year credit card and best credit card after the first year. Please keep that in mind as you analyze your own spending and determine which credit card may be best. Earning an extra $300-700 in bonus rewards when you open a card can drastically change the results, particularly in the first year. Over time, it’s less relevant.
You need to choose what works best for you. Personally, I like simplicity.
I like basic, cash reward programs, where I don’t need to keep track of rotating bonus categories or which credit card to use in which store. It’s too complicated for me.
I’ve had a Barclays Arrival Plus credit card for years. It’s no longer available, but I was curious if the annual fee was worth it compared to other cash back credit cards on the market.
Best Cash Back Credit Cards – Find the Right Cash Back Credit Card for You
I researched popular cash back credit cards and the following options kept appearing:
- Citi Double Cash
- Capital One Quicksilver
- Chase Freedom
- DIscover It Cash Back
- American Express Blue Cash Preferred Card®
I’ll describe the features of each. This way you can start to get a feel for how to use the credit card analyzer. Please keep in mind I am looking for a card I can use regularly without thinking about it.
If you were looking to spend more time and optimize your rewards, you could use multiple cards to boost your rewards.
Citi Double Cash
- No annual fee
- 2% cash back (1% when you buy plus another 1% when you pay for the purchases)
- No caps or category restrictions on rewards
- 3% foreign transaction fee
- No sign-up bonus
Capital One Quicksilver
- No annual fee
- 1.5% cash back
- No cap or category restrictions on rewards
- No foreign transaction fee
- Sign up bonus of $150 after you spend $500 on purchases within 3 months from account opening
Chase Freedom
- No annual fee
- 5% cash back on rotating categories on up to $1,500 in spending each quarter, 1% on all other purchases
- Caps and category restrictions on rewards
- 5% cash back on grocery store purchases (excluding Target® and Walmart®) on up to $12,000 in the first year
- 3% foreign transaction fee
- Sign up bonus of $200 after you spend $500 on purchases within 3 months from account opening
Discover It Cash Back
- No annual fee
- 5% cash back on rotating categories on up to $1,500 in spending each quarter, 1% on all other purchases
- Caps and category restrictions on rewards
- Match the cash back you earn at the end of the first year
- No foreign transaction fee
- No sign up bonus
American Express Blue Cash Preferred®
- $95 annual fee
- 6% cash back at U.S. supermarkets on up to $6,000 in purchases, 6% on select U.S. streaming subscription, 3% on transit, 3% on U.S. gas stations, 1% on all other purchases
- Caps and category restrictions on rewards
- 2.7% foreign transaction fee
- Sign up bonus of $250 after you spend $1,000 on purchases within 3 months from account opening
Again, the tool was not built to factor in the following:
- Interest if you carry a balance
- Other features, such as lounge access, car rental damage insurance, fraud protection, etc.
- Customer service
- Many other factors
If you are unsure of your spending, I recommend tracking your spending. I’ve been using Mint since 2013. It makes it easy to know exactly how much I spend on a credit card each year, as well as the different categories.
If you use it, you can quickly determine your total annual spending, estimate your international spending, and split out spending by categories, which will come in handy for the credit card analyzer.
Using the Credit Card Analyzer to Find the Right Cash Back Credit Card for You
The Google Sheet has instructions, but the first step you want to do is make a copy within Google Sheets or download it to your computer if you want to work in Excel.
Are you interested in using this credit card analyzer to find the right cash back credit card for you? Click here to sign up for my email list, and I will provide the link to the Google sheet.
The summary tab shows the results. The green “Best Card After 1st Year” is the best card to use after the first year, given how you spend. It ignores the sign up bonus or rewards that only apply to the first year.
The blue “Best Card 1st Year” is the card you want to use to maximize first year rewards. It may not be the best card after that first year.
The red “Worst Card” is the card that minimizes rewards based on your spending.
Below the best and worst credit cards are the name of the credit cards and the following information for each card:
- Estimated Annual Rewards After Fees
- Estimated First Year Bonus
- Estimated First Year Rewards with Bonus After Fees
- Estimated Foreign Transaction Fees
- Annual Fee
Estimated Annual Rewards After Fees: This tells you the estimated rewards you will receive each year after fees. It does not include any first year rewards. This is the column I look for to see what would be the best card after the first year.
Estimated First Year Bonus: This includes a sign up bonus or any special category spending that only applies in the first year. If you are one of those people who likes optimizing credit card bonuses, this column is for you.
Estimated First Year Rewards with Bonus After Fees: This is the estimated first year rewards, including sign up bonuses or special category spending that only applies in the first year.
Estimated Foreign Transaction Fees: This will show you an estimate of your foreign transaction fees. This will make it easier to choose an alternative card for spending abroad.
Annual fee: This will tell you whether the card has a fee. Please keep in mind the estimated rewards already factors in the annual fee. I included it in case you want to add an additional card, such as for spending abroad, and whether it would cost you anything.
How to Use the Inputs Tab of the Credit Card Analyzer
Step 1: Input your spending
In B8, input your estimated total annual spending, including your international spending. In B9, input your estimated annual international spending. For example, if you spend $20,000 on credit cards each year and $10,000 of that is in international spending, put $20,000 and $10,000.
Step 2: Input your category spending
Scroll down and input your category spending in the blue cells. You’ll need to do it for the Chase Freedom, Discover It Cash Back, and American Express Blue Cash Preferred Card. Please pay special attention to the fact that the American Express Blue Cash Preferred Card is the estimated spending per year. It is not quarterly like the other two cards.
The category spending may need updating. This is an estimate of what I found online. You can change the green cells in Column A with the appropriate categories, as well as the rewards in column B.
As you can imagine, this tab is much easier to complete if you already have the data. That’s why I like tracking my spending in Mint. It takes less than 15 minutes to get an estimate for my total spending, total international spending, and category spending.
It’s not perfect, but it’s an estimate to help make a decision about which card is best given your spending.
Step 3: Review the results for the right cash back credit card for you
Go back to the summary tab to see which card is best given your spending. If you want to optimize first year rewards, you can focus on the blue “Best Card 1st Year.” If you are like me, you can focus on the green “Best Card After 1st Year.” I tend to pick a credit card and stick with it, which is why I built the credit card analyzer because it’s been many years since I’ve seriously looked at other credit cards.
Which cash back credit card should you choose?
It likely makes the most sense to choose the credit card the credit card analyzer says will optimize your rewards; however, I wanted to provide my thoughts.
If you don’t want to track the quarterly categories of the Chase Freedom and Discover It Cash Back, the Citi Double Cash is a great card. It provides 2% back on everything.
It doesn’t get simpler.
The downside?
It has a foreign transaction fee.
A simple fix is to use the Citi Double Cash when spending in the United States and the Capital One Quicksilver when abroad. This would be my preferred combination. You earn 2% in the United States and 1.5% abroad. You pay no annual fees for either card.
Again, I don’t like tracking categories and the fact that you need to activate the categories each quarter.
The upside with tracking categories is that if you max them out each quarter with the Chase Freedom or Discover It Cash Back, you can earn $75 a quarter or $300 in a year with only $6,000 of spending.
With the Citi Double Cash, it would take $15,000 worth of spending to equal $300 in rewards.
If you are that type of person who enjoys tracking and activating categories, you may be able to squeeze out more rewards from those cards. You need to decide whether your time is worth it.
First Year Rewards
The last thing to keep in mind are the first year rewards. I was tempted to ignore them because I don’t like thinking about one time rewards, but they exist and can equal a few hundred dollars a year.
The Chase Freedom and Discover It Cash Back have lucrative first year rewards.
The Chase Freedom allows you to earn 5% on grocery store purchases on up to $12,000 in spending in the first year. Since food is a big part of many budgets, the rewards will likely add up fast. You could potentially earn $600 in the first year if you spent the full $12,000.
The Discover It Cash Back matches the cash back you earn in the first year. For example, if you earn $200, they will match it with $200. If you spent the maximum in each of the quarterly categories and spent $15,000 overall for the year, the total first year rewards would be $780.
Final Thoughts
As you can see, the question of “Which credit card should I choose?” is not an easy one.
It depends on your spending. I’ve looked at only a handful of cash back credit cards with this credit card analyzer, but there are many different types of credit cards. The best credit card for you may not be in the credit card analyzer. You can try using this tool: Find My Card.
You should carefully review other sources of information before deciding which credit card to choose. I also did not talk about credit scores, credit utilization, and many other factors that should be a part of your decision.
As with any money decision, there are many factors to consider, and it’s impossible to incorporate them into a simple tool.
I hope you found the credit card analyzer helpful in finding the right cash back credit card for you. If you have suggestions to improve it or want to share a story about how it helped you, please contact me. I’d love to hear from you!