Cash Back Credit Cards I Have

A reader asked me to write a post about specific credit cards I like and why, so I figured I’d start off with just listing the credit cards I currently have and explain what I like and dislike about them. I currently have 12 credit cards, so this post is just about the three cash back (or pseudo cash back) credit cards that I have: Discover It, Chase Freedom, and Citi Forward. I’ll write follow-up posts covering the points credit cards and airline credit cards that I have, as well as deeper dives into how to choose the right credit card for you. (As an aside, if you have any suggestions on things you ever want me to write about, feel free to email me at efficientasianman (at) gmail (dot) com)

Discover It

This is the credit card that I’ve mentioned most often in my blog, surprisingly enough. It’s a basic cash back credit card that carries no annual fee.

Things I like about this card:

1. Rotating 5% cash back categories. This quarter is restaurants and movies; next quarter is home improvement.
2. 1% cash back on everything else. In the past, the Discover More card only earned .25% cash back on the first $3000 in purchases, but that’s not true of the new Discover It card (and if you still have an old Discover card, you can call to convert your card to the new Discover It card).
3. Good online shopping portal (e.g. 5% back on Apple store purchases, 15% back on Groupon).
4. Good customer service. They pick up the phone quickly once you get past the phone tree (hint: press 0), and their customer service agents have all been based in the US.
5. Lots of random benefits that usually don’t come with no fee cards like trip delay insurance, baggage delay insurance, purchase protection, and a concierge service.
6. Random times when you’ll get extra cash back like on your birthday or double cash back for groceries.
7. No annual fee.
8. No foreign transaction fees. In fact, I think (although I haven’t rigorously tested this) that Discover even offers the best foreign exchange rates of the no foreign transaction fee cards that I’ve tested.
9. You can up to $500 per month to people for free via Paypal. It’s like printing free money.
10. They waive the fee for the first late payment, and they won’t raise your APR if you pay late.

Things I dislike about this card:

1. Discover isn’t as widely accepted as Visa or Mastercard. I don’t have many problems in the Bay Area, but it’s not as widely accepted in Seattle. Internationally, you’re generally looking for Diner’s Club, JCB, or China Union Pay, which is great in some areas (I had few problems using Discover in Cape Town), but crappy in others (very few places accepted Discover in Paris or Amsterdam).
2. My initial credit limit was pretty low.
3. You can only redeem in increments of $50 for cash back if you want statement credits, but you can also use your cash back for Amazon purchases (and they were running a deal last Christmas where you could get free expedited shipping if you paid with Discover) in any amount, so I guess this doesn’t matter as much. You can also redeem for gift cards and get better redemption rates (e.g. $50 gift card for $40 of cash back).

Overall, I think it’s a solid card if you want a cash back card, and it can complement other cards with its good benefits, no foreign transaction fee, and rotating 5% categories. Also, if you apply for the card through the link I posted, you can get $50 cash back after your first purchase within 3 months instead of having no sign up bonus at all. This wouldn’t be the only card that I carry around in my wallet, but it does get put in my wallet pretty frequently.

Chase Freedom

This is another basic cash back card like the Discover card. They also do rotating categories where you get 5% cash back and 1% cash back otherwise.

Things I like:

1. Rotating 5% cash back categories. This quarter is Starbucks, drug stores, and gas stations; next quarter is restaurants and movie theaters. This card and the Discover It card can be good complements for each other.
2. 1% cash back everywhere else.
3. Access to the Ultimate Rewards shopping portal (although I’ve had problems in the past of getting credit for purchases made through this portal).
4. No annual fee.
5. If you also have a Chase checking account, you get extra perks like an additional 10 points and 10% per purchase (1 point = 1 cent for cash back), but some of these perks are going to be phased out.
6. If you also have a Chase Sapphire Preferred or Chase Ink card, you can consolidate points earned from your Chase Freedom card to those cards, which means you can then transfer points to various hotel and airline partners. This can make each point worth much more than just 1 cent.
7. It’s Visa, so it’s widely accepted.
8. You can redeem for statement credits in any amount.

Things I dislike:

1. No interesting benefits for the card. Most people usually get approved for the normal version of the card (not the Visa Signature version), so that means you don’t get fancier benefits like a concierge or extended warranty.
2. 3% foreign transaction fee.

I use this card if I’m spending money on a rotating category, but otherwise, this card stays in my drawer. Which means that this card stays in my drawer for much of the year. This card normally comes with a $100 sign up bonus for spending $500 in the first three months. I’ve occasionally seen higher bonuses.

Citi Forward

Spending money on this card gets you Thank You points, which can be redeemed for lots of different things including statement credits, gift certificates, travel, and products. Some redemptions are much better values than others. Redeeming strictly for statement credits means each Thank You point is worth ~.6-.7 cents; redeeming for travel by booking flights through their portal means each point is worth 1 cent. This card is marketed specifically to college students.

Things I like:

1. 5x Thank You points per dollar on restaurants, movies and bookstores (1 Thank You point per dollar spent everywhere else). And the best part is that Amazon counts as a giant bookstore (at least it did the last time I checked). Which means that this credit card offers more cash back than the Amazon-branded Chase credit card.
2. No annual fee.
3. Visa branded, so wide acceptance.
4. I don’t know as much about this, but you can consolidate points earned from a Citi Forward card with a Citi Thank You Premier card, which means points can be worth more than 1 cent for certain redemptions.
5. Citi also seems to have gotten into trying random bonuses. Like I got an offer for 5x points for drug store purchases last month.

Things I don’t like:

1. Card comes with no special benefits.
2. 3% foreign transaction fee.
3. Thank You points aren’t strictly worth 1 cent per point for cash back. This is ameliorated by the fact that you can get 1 cent per point when redeeming for airline tickets, but there can be other reasons why you don’t want to book airline travel through a portal (e.g. United Mileage Explorer benefits don’t get applied for the outbound for flights booked through a portal; you can’t use vouchers or gift cards when redeeming through portals).

Honestly, this card should probably have a more regular place in my wallet since the 5x per dollar at restaurants and Amazon are pretty compelling, but for some reason, I never use this card any more.