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Happy New Year from ThePointSoldier! We took a little break over the holidays but are back to bring you fresh articles in 2017. We also did some traveling these past weeks, so stay tuned for brand new travel reviews from Tina. We also have a very exciting aircraft review coming up. This will be an amazing year to travel, but first, let’s see how we can put some cash back into our pocketbooks after this holiday season.
Travel Rewards vs Cash Back
While Rewards cards can be extremely lucrative when redeemed towards travel, they do not directly translate into actual cash. So if travel isn’t your thing, or you feel you could put cold, hard, cash to better use than booking your travel with points, then cash back credit cards may be a better option for you. With cash back, what you see is what you get; the amount you’ve earned is the amount is you will receive, either as a statement credit or in form of a check. It’s a 1:1 transaction, and that’s where it differs from the points system: A single Ultimate Rewards point, for example, can be worth over 2 cents when transferred over to an airline or hotel partner. But receiving a 25th paycheck each year is obviously also very beneficial and a much more direct way of being “rewarded”. I’ve compiled a list of my Top 5 cash back credit cards for military personnel:
1 American Express Blue Cash Preferred Card
The Blue Cash Preferred Card from American Express is arguably the most valuable cash back credit card available. The $95 annual fee is waived for active duty military personnel thanks to Amex’s generous SCRA benefits. Not only is this card extremely beneficial for cash back collectors, it is also a really cool looking credit card overall. Granted, the cool factor of a credit card is hardly its most important feature, but it doesn’t hurt either. The Blue Cash Preferred currently offers a 10 percent cash back promotion on purchases made on Amazon in the first 6 months. This promotion is only valid on up to $2,000 made in purchases (equals up to a whopping $200) and only if you apply by 11 January 2017. There is also a $150 sign up bonus with this card after spending $1,000 within the first 3 months. However, the real value in this card lies in its earning potential:
- 6 percent cash back at US supermarkets (up to $6,000 per year in purchases, 1 percent thereafter)
- 3 percent cash back at US gas stations and select US department stores
- 1 percent on other purchases
- Other benefits such as extended warranty and purchase protection
Unfortunately, the Blue Cash Preferred does charge a foreign transaction fee, but if you qualify for the SCRA benefits, Amex will waive that fee for you.
2 Costco Anywhere Visa Card By Citi
Costco recently cut ties with Amex and signed a deal with Citi instead. That is good news for us, because, frankly, the old American Express Costco card left much to be desired. You didn’t even earn any bonus cash back when shopping at Costco. All that has changed, and Citi did release a truly noteworthy product with the Costco Anywhere Visa Card. It is annual fee free, as a Costco membership is required and comes with its own annual fee.
- 4 percent on gas purchases worldwide (up to $7,000 on purchases per year, 1 percent thereafter)
- 3 percent on travel and dining worldwide
- 2 percent on all other Costco and Costco.com purchases
- 1 percent on all other purchases
If you’re already a Costco member and are interested in cash back, then the Costco Anywhere Visa by Citi is a no brainer. This card offers a huge earning potential and also replaces the Costco membership card in your wallet. Just present this card in lieu of your regular membership card at the door and at the register. It does, however, charge a foreign transaction fee, so keep that in mind when trying to earn cash back abroad.
3 Citi Double Cash Card
The Citi Double Cash Card is a true multi purpose card. No cash back collector should be without it. This card is great for any non bonus category spending, due to the fact that you earn a total of 2 percent cash back on all purchases, hence the name of the card. You earn 1 percent when making the transaction and another when paying the bill, as long as you pay at least the minimum amount due. I highly discourage paying only the minimum amount due, you should always pay the full monthly balance. This card is annual fee free but does charge a foreign transaction fee.
This is my USAA Cash Rewards Visa, not the Cashback Rewards Plus
4 Cashback Rewards Plus American Express
The Cashback Rewards Plus American Express card is a United Services Automobile Association (USAA) exclusive cash back card and you have to be a member to be eligible for it. This card is great for several reasons: it offers a very generous cash back percentage, does not charge an annual fee and also no foreign transaction fee. It is very difficult to find a cash back credit card, annual fee free or not, that won’t charge a foreign transaction fee. For us on active duty, it is an incredible asset to carry at least one card that does not charge such a fee, as we will probably, at some point in our career, find ourselves on another continent for an extended period of time.
- 5 percent on gasoline and shopping on military installations, up to $3,000 in annual purchases, 1 percent thereafter
- 3 percent on groceries, up to $3,000 in annual purchases, 1 percent thereafter
- 1 percent on all other purchases
- no annual fee
- no FTF
The Cashback Rewards Plus Amex card should have a place in every military cash back collector’s wallet.
5 Chase Freedom/Discover it Cash Credit Card
These two cards tied for 5th place because they are very similar. Both cards earn 5 percent cash back on a quarterly rotating category basis. These categories range anywhere from gasoline, to groceries, all the way to Amazon purchases. The Chase Freedom’s current category, for the 1st quarter of 2017, is gasoline and local commuter purchases. The Discover it Cash Credit Card has a very similar category and both are capped at $1,500 each quarter. All purchases beyond that, and all other categories, will yield you a mere 1 percent in cash back. Which one you go for is entirely up to you. In general, both cards are equal, but there are a few minor differences: The Chase Freedom will either earn cash back or Ultimate Rewards points, or any combination of the two that you prefer, but you do need a premium Chase credit card in addition to the Chase Freedom in order to convert cash back points into Ultimate Rewards. The Chase Sapphire Reserve or even just the Preferred will suffice. The Chase Freedom is also a Visa card, whereas the Discover it card is a, well Discover card, and much less recognized than Visa, Mastercard, or even Amex. But the Discover it Cash Credit Card, in contrast to the Chase Freedom card, does not charge a foreign transaction fee. Discover is not directly honored in Europe and Asia, but you can use your Discover card abroad anywhere Diners Club or JCB are accepted. The Chase Freedom currently offers a $150 sign-up bonus after spending $500 or more on purchases in the first 3 months. The Discover it card does not offer a sign-up bonus, but will match your cash back in the first year, which can potentially be much greater than $150.
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There is one more cash back card that needs to be mentioned and that is the JCB. There are actually several variants of JCB offered in the US (Mitsuwa, Marukai and JCB Standard) and each come with their own perks and memberships. These cards are primarily aimed at residents of California and Hawaii, but are also available to residents of several other states. The Mitsuwa and Marukai variants yield up to 3 percent cash back, depending on your annual spending, plus potential bonus cash back at certain spending thresholds. JCB cards are accepted anywhere Discover cards are honored.
Although I do not primarily focus on cash back, I do have a few cash back credit cards myself. Collecting points for travel does not benefit everyone and cash back cards offer an incredibly valuable alternative. Imagine earning a 25th paycheck each year, just for paying your bills and making purchases as you normally would. I do, however, discourage going for both, cash back and rewards points, because either are more lucrative alone.
Which do you prefer, cash back or travel points and miles? Please comment below or on our social media pages.