Cash Back Credit Cards + Savings Accounts
This post is a slightly different from the normal. My fiance recently graduated from graduate school and started work. I have been helping her reorganize her financing as she transitions from being a student to the workforce. In the process, I readdressed my finances, and I wanted to share what credit cards and bank accounts appear to offer the best deals currently.
When it comes to credit card rewards, I prefer cash back for a variety of reasons. Cash back gives you the most flexibility as to how you spend rewards. I do travel a decent amount, however I do not think there is a huge benefit in airline miles rewards due to black out dates, etc. I’d rather have the cash back to buy plane tickets according to what fits my schedule best, etc. I avoid traditional rewards programs because of the limited amount of options of goods to purchase.
That being said, I’m always keeping an eye out for the best cash back rewards programs. After doing a bunch of research last week, I discovered the following cards appear to offer the best deals:
- American Express Blue Cash Everyday - 3% back on groceries, 2% on gas and department stores and 1% on everything else with no limit.
- Chase Freedom - 1% unlimited rewards on everything and rotating 5% cashback rewards categories each quarter up to $1,500 spending. Current quarter categories include dining, department stores and charity.
- Capital One Cash Rewards - 1% unlimited rewards with a 50% bonus every year, for an effective rate of 1.5%.
With these three credit cards, you can get 3% back on groceries, 2% back on department stores (including Amazon.com supposedly), 5% cash back on random categories every quarter and 1.5% cash back everywhere else. As far as I was able to tell, these are currently the best deals out there for how I spend my money currently. I do not own a car so I avoided credit cards that give bonuses for gas spending which is a common bonus rewards category. Obviously everybody’s spending trends vary, so you may find another credit card that offers bonus categories that better work for you. Also, I try to pay off my credit cards every month so that I don’t have to worry about APR differences, etc.
In regards to online savings accounts, ING Direct appears to still offer competitive rates and I love their web interface compared to any other bank. I believe the current interest rate they offer is 1%. This rate is much higher compared to what brick and mortar banks offer in savings accounts from what I’ve seen. The only caveat is that transfers can take 2-5 days to clear and you’re limited to five withdrawals a month (which from what I understand is a standard for savings accounts.)
I’m always open to suggestions, so if anyone has any recommendations let me know!