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The Citi Dividend Platinum Select will give 5% cash back on Hilton hotels, car rentals, movies and theme parks during the third quarter of the year, from July 1st through September 30th. However, rewards are capped at $300 cash back annually, which works out to $6,000 spent in bonus categories. How does the Dividend stack up against the other 5% cash back behemoths? We’ll break down the perks and particulars of each one.
The Citi® Dividend Platinum Select® Visa® Card offers 5% cash back in rotating bonus categories that change every quarter and 1% elsewhere, and like we said, it caps rewards at $300 cash back earned per year. It comes with a Earn $100 cash back after $500 in purchases within the first 3 months of account opening. signup bonus, which doesn’t count towards the $300 cap, and also has 0% APR for 12 months on purchases and balance transfers. We generally think that the Dividend is a good idea if you’re going to spend big in one of that quarter’s bonus categories – if you’re planning on spending $6k at the Hilton this summer, for example – because it imposes annual rather than quarterly limits. However, you’ll note that your non-bonus spending is essentially capped as well. This puts the card at a significant disadvantage compared with the Chase Freedom, Discover it® and US Bank Cash+.
5% bonus categories for 2013
||Drugstores, gas and Starbucks
||Restaurants and movies
||Zappos, fitness clubs, drugstores
||Restuarants, movies and Lowe’s
||Home furnishing and home and garden stores
||Gas, theme parks and Kohl’s
||Hilton, car rentals and theme parks
||Amazon and select department stores, including Macy’s, Nordstrom and Kohl’s
Chase Freedom: Our most popular 5% cash back card is the Chase Freedom. It gives 5% back on rotating bonus categories up to $1,500 spent per quarter, and an unlimited 1% back elsewhere. Assuming that you max out your bonus categories on both the Freedom and the Dividend, you’d earn more with the Freedom, because the Dividend limits overall spending while the Freedom only limits bonus spending. The Freedom also has a Get a $100 Bonus after spending $500 on purchases in your first 3 months from account opening. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories and unlimited 1% cash back on all other purchases, all with no annual fee. signup bonus, and offers 15 months of 0% APR on purchases and transfers. Again, as long as you don’t plan on spending a couple thousand on the Citi’s current bonus category, we tend to recommend the Freedom.
Discover it®: Discover’s 5% card also caps bonus rewards at $1,500 spent per quarter and offers an unlimited 1% elsewhere, but has no signup bonus. One main draw of the card is that it has no foreign transaction fee, which is helpful if you go abroad; one main drawback is that Discover’s international acceptance leaves a lot to be desired, and many countries simply don’t take the card (here’s a list of countries that take Discover). Moreover, its acceptance in the US is not as good as that of Visa or MasterCard. Still, when deciding between the Freedom and it, the choice comes down to which of the bonus categories you prefer.
US Bank Cash+: The only card without a predetermined set of offers, the US Bank Cash+ offers 5% cash back on two categories chosen from a rotating slate up to $2,000 spent per quarter, plus 2% back on gas, groceries or drugstores (you pick one) and 1% elsewhere. If you rack up $100 worth of cashback rewards, once a year, you can get an extra $25 when you redeem. There are only two downsides to the card – there’s no signup bonus, unlike the Freedom and Dividend, and while the other cards have retroactive opt-ins (you can register in July but still get Q3 rewards), with the Cash+, you snooze, you lose. If you plan to hold the card for a long time, you’re better off with the Cash+’s improved rewards; if not, the signup bonus puts the Dividend ahead in the short run.