The Capital One Cash: a No-Fee, No-Gimmicks Credit Card
One of the best free credit cards out there, the Capital One Cash gives a solid 1.5% back on all purchases made. It’s low-maintenance, with no annual fee or foreign transaction fee. In terms of straight-up rewards rate, it doesn’t fare well against the cash rewards heavyweights. However, its best feature is that in addition to giving rewards, it has one of the longer 0% introductory APR periods out there. We’ll break down the Capital One Cash’s benefits and compare it to the best cash back credit cards on the market. Read on!
|Capital One® Cash Rewards - $100 Cash Back Bonus|
|Annual Fee||Signup Bonus||APR , Variable*||APR Promotions|
|$0||$100 bonus after you spend $500 on purchases within the first 3 months||12.9% - 20.9% (V)||0% introductory APR on Purchases and Balance Transfers until May 2014.|
Cashing in without the fees
The card gives a flat 1% rewards rate on all purchases, but increases your rewards (spent or unspent) by 50% at the end of the year, so your effective rewards rate is 1.5% as long as you stick with the card. (Plus, you get your bonus all at once, which is pretty darn exciting). The card comes with a $100 cash back signup bonus.
Your rewards never expire, and you can redeem them via cash, check, statement credit, donation or gift cards. You can also automatically redeem your rewards by saying, for instance, that if you’ve accumulated more than $25 cash back by the third Tuesday of the month, you want a gift card.
It’s a no-frills card, as we’ve said, without the hassle of redemption tiers, spending caps, or enrollment bonus categories. It has no annual fee or foreign transaction fee, but best of all, it has a 0% purchase and balance transfer APR for the first 12 months. Most other balance transfer credit cards don’t give rewards at all.
Cash back credit card showdown
How does the Capital One Cash fare against our reigning cash back champions?
Capital One Cash vs. Chase Freedom
The Chase Freedom easily has better rewards than the Cash: it gives 5% back in rotating bonus categories up to $1,500 in purchases a quarter, plus an unlimited 1% back elsewhere. The Freedom also has a promotional $100 cash back signup bonus. It doesn’t have a 0% APR deal, so if you’re already carrying credit card debt or need to make a big purchase, you can get the best of both worlds with the CapOne Cash. However, if you’re just looking to maximize rewards, you should probably consider the Chase Freedom.
Capital One Cash vs. AmEx Blue Cash
The American Express Blue Cash Preferred is one of the most popular cash back credit cards. Like the Cash, it’s pretty simple, steering clear of thresholds. Its rewards rate is quite high: 6% back on up to $6k spent on groceries, unlimited 3% at gas stations and department stores, and 1% elsewhere. It does have a $75 annual fee, though, so it doesn’t have quite the simplicity of the Capital One Cash. If you’re a big suburban spender (i.e., you buy gas, groceries and clothes for a family) you’re better off with the Blue Cash, but someone whose spending patterns are more diversified will prefer the Cash.
Citi® Dividend World MasterCard® – $100 Cash Back
We wanted to compare the CapOne Cash with a credit card that has a balance transfer deal as well as rewards. The Citi® Dividend World MasterCard® – $100 Cash Back has a 0% APR period of 15 months*, but caps its annual rewards at $300. That’s $20,000 of spending on the Cash. If your annual spending exceeds $20k, you’re probably better off with the CapOne Cash’s unlimited rewards. On the other hand, if your spending is well below that threshold, you may prefer the longer 0% intro period.