Which 1.5% Cash-Back Credit Card Should You Choose?

The field is so crowded that it can be hard to notice differences between contenders. Here's how to find the one that fits you.

Gregory Karp, Robin Saks FrankelSeptember 14, 2020
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Which 1.5% Cash Back Credit Card Should You Choose?

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Some people just want a simple cash-back credit card that offers a decent flat rewards rate on all their spending. No tracking bonus categories or worrying about which card to use at which merchant.

The problem is, plenty of cards offer a respectable 1.5% cash back on all purchases, which is the industry standard among flat-rate credit cards. How do you choose?

We’ll show some top contenders and then explain factors to help you pick one for yourself. But the short answer is that most 1.5% cash-back cards are very similar. So if you’re not fussy, just pick one you like — maybe from the chart below, or maybe from an issuer you already like or do business with.

And below the chart, for those who like to optimize and make a personalized choice, we offer a dozen factors to consider.

Nerd tip: You can find cash-back cards that earn 2% back or more on purchases, but they might have other shortcomings, such as an annual fee, a requirement to join a credit union or no sign-up bonus.

Good 1.5% cash back credit cards

Choices abound for no-annual-fee 1.5% cash-back cards that have two key offerings: a sign-up bonus and a 0% intro APR promotion. Here are some we like. But, again, they’re pretty similar.

How to choose

All these cards have a flat 1.5% cash-back rate, the most important factor. So that doesn’t help you choose. Instead, consider these factors as tiebreakers.

Sign-up bonus

If you’re hunting for a cash-back card, the dollars are important. You can boost those dollars by earning a sign-up bonus — sometimes called a new cardholder offer or welcome offer. The catch? You must charge a certain dollar amount on the card to earn the bonus, and you have to do it relatively soon after you get the card, typically within three months.

Heavy spenders will be able to earn the bonus on cash-back cards without a problem. Compared with travel cards, for example, the spending requirement is typically modest — maybe $500 in three months. But if you’re a light spender, consider choosing a card whose bonus has a lower spending requirement.

For example, the light spender might choose the Chase Freedom Unlimited® over the American Express Cash Magnet® Card, which has double the spending requirement.

Sometimes a bonus is baked into a temporary boost in the rewards rate. For example, the HSBC Cash Rewards Mastercard® credit card is basically a 1.5% cash-back card, but its rewards rate in the first year is 3% cash back, after which the rate falls to 1.5% back. Its annual fee is $0.

0% intro APR period

An introductory 0% annual percentage rate can be valuable. Unlike a bonus, it doesn’t give you free money. Instead, it saves you money for free — by allowing you to carry debt, typically for a year or more, without paying interest.

What to look for:

  • How many months does the promotional offer last? A year or more is good.

  • Does the 0% APR apply to purchases, balance transfers or both?

  • If you’re interested in a balance transfer, look up the balance transfer fee. A 3% fee is typical; 5% is high. (It's difficult, but not impossible, to find cards that don't charge balance transfer fees at all.)

Ongoing APR

In the chart above, you have a sampling of the APRs that top cards are charging for carrying a monthly balance. If you won’t pay your balance in full, rethink whether a rewards card is best for you. You might focus on other cards that specialize in introductory 0% offers and low ongoing APRs.

Annual fee

It’s typical for 1.5% cash-back cards to have no annual fee. If you have to pay an annual fee, make sure there’s a good reason.

Credit required

One good reason to pay an annual fee is if you don’t have top-notch credit. That’s why Capital One, for example, offers two different 1.5% cash-back cards. They might seem the same, but there's a key difference between the two: your credit.

If you're working to build or repair your credit, you've got a better shot at getting approved for the Capital One® QuicksilverOne® Cash Rewards Credit Card. It could be worth paying the annual fee.

Foreign transaction fees

Many cash-back credit cards have foreign transaction fees; 3% on each purchase abroad is common. But some don’t. If you’ll often be traveling out of the country with this cash-back card, make sure it doesn’t charge these fees on foreign transactions.

Example: The Capital One® Quicksilver® Cash Rewards Credit Card has no foreign transaction fees.

Hassle

People who want a simple, flat-rate cash-back card probably want to avoid complexities. If that’s you, make that part of your decision. For example, while credit unions can be very consumer-friendly financial institutions, getting one of their credit cards means joining the credit union, which involves at least a little hassle compared with general market cards.

Example: USAA is known for excellent financial products, but you have to qualify to join. So, the USAA® Preferred Cash Rewards Visa Signature® Card might be impossible for you to get if you don’t have a link to the military to qualify.

Perks

Dive deeper into each card’s features and you might find they make one choice more appealing. Examples:

Rewards cap

Typically, the 1.5% cash back is unlimited, meaning you continue earning 1.5% back whether your annual spending on the card is $5,000 or $50,000. If a card you're considering caps its 1.5% earnings at a certain dollar amount that you’re likely to hit, consider a different card.

Redemption options

Most cards have similar redemption options. You might be able to get your cash back as a statement credit, direct bank deposit or paper check, among other choices. As long as you’re getting full value for your rewards, it doesn’t matter much. But choose a card that has a payout method you prefer.

Related to this point is a redemption requirement: the minimum rewards you’re allowed to redeem. Many cards let you redeem for any amount, but some require you to accumulate $25 first before you can cash out rewards, for example. It’s a minor factor unless it’s important for you to cash out, say, $12 in rewards, instead of waiting until you accumulate $25.

Desirability of issuer

If you already have a Chase credit card, for example, and you’re happy or disgruntled with your experience, that might affect whether you want another card by the same issuer.

Many people like to use two cards in tandem: one for higher rewards on certain spending categories and a 1.5% cash-back card for all other spending. You might want to use two cards by the same issuer to keep things simpler. Then, you can access your accounts with a single app or website login.

Acceptance of card network

American Express and Discover credit cards typically rank high in customer satisfaction, as measured by J.D. Power, and are accepted at many merchants in the United States.

However, you might want to avoid cards from those issuers if you often travel abroad. Their card networks are not as widely accepted in other countries as Visa and Mastercard.

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