Cash-back credit cards fall into two basic categories: cards that pay the same rewards rate on all your purchases and cards that pay higher rewards on certain types of purchases.
The Citi® Double Cash Card – 18 month BT offer is an example from the first category. The Discover it® Cash Back falls into the second. A comparison can help you decide which type of cash-back card is right for you.
Rotating bonus categories: Discover it® Cash BackDiscover it® Cash Back.
This year’s bonus categories are:
|Discover bonus categories for 2018|
|Q1 2018 (Jan. 1 – March 31)||Gas stations and wholesale clubs|
|Q2 2018 (April 1 – June 30)||Grocery stores|
|Q3 2018 (July 1 – Sept. 30)||Restaurants|
|Q4 2018 (Oct. 1 – Dec. 31)||Amazon.com and wholesale clubs|
The trick with these cards is to find one that offers bonus rewards in categories where you spend a lot of money and then direct as much of your spending as you can to the card while the quarterly bonus is in effect. For example, if you have a $1,000 bathroom makeover in mind, you might wait until “home improvement” is a bonus category before heading to Home Depot.
The caveat is that you must remember to opt in to, or “activate,” the bonus category each quarter — and you’ll receive the bonus only on the first $1,500 you spend in the designated category. After that, your rewards will revert to the flat 1% you’ll receive on all purchases. That’s still a pretty good rewards rate, but it doesn’t match the Citi® Double Cash Card – 18 month BT offer.
If you like the idea of a card with rotating bonus categories, the Discover it® Cash Back is a great option. It has an annual fee of $0, and it gives cardholders access to their FICO score and to the extra-high rewards available through the Discover Deals online bonus mall. It also has a promotion for new cardholders: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
A flat cash back rate: The Citi® Double Cash Card – 18 month BT offer
For this type of card, the Nerds are partial to the Citi® Double Cash Card – 18 month BT offer. The card rewards you with 1% cash back on all your purchases and an additional 1% when you pay them off.
The Citi® Double Cash Card – 18 month BT offer rewards structure is great for people who habitually pay their credit card balance in full every month and for people who need a little extra motivation to pay it off.
The card has an annual fee of $0 and offers an introductory APR of 0% on Balance Transfers for 18 months, and then the ongoing APR of 15.24% - 25.24% Variable APR.
Why choose just one?
If you’re really looking to optimize your credit card rewards, getting both a flat-rate cash-back card and one that offers rotating bonus categories is a tried-and-true strategy. The pair we’ve examined above complement each other nicely. You could do a whole lot worse than using this Discover card up to the spending limit on bonus categories and the Citi® Double Cash Card – 18 month BT offer for everything else.