Best cash back cards with an annual fee

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Best cash back cards with an annual fee


Cash back credit cards are great ways to earn rewards when you make purchases. Some cards may have an annual fee, but depending on how much you spend, the rewards and perks associated with the card might outweigh the cost.

The pros and cons of three cash back credit cards

Different cash back cards may suit one person better than another. We chose the following three cards because they offer greater potential rewards or lower fees than other cash back cards. They also represent different rewards styles, as one offers a flat cash back rate on all purchases, two vary the rate depending on where purchases are made and one gives cardholders rewards points that can be redeemed in multiple ways.

Consider the pros and cons of different cash back cards, as well as other non-fee options, when trying to find the best card for you.

Chase Sapphire Preferred® card

  • Pros - This card is often featured as a travel rewards card because the Ultimate Rewards® points you earn when using the card can be redeemed to pay for travel costs or transferred to various frequent-traveler programs for airlines or hotels. However, you can also redeem the points for statement credits at a rate of 100 points per dollar. There's a minimum redemption of $20 (2,000 points).

    You can earn the equivalent of 2 percent back on dining and travel costs, and a 50,000-point bonus if you spend $4,000 within the first three months -- worth $625 in travel when you redeem through Chase Ultimate Rewards®. The $95 fee is the most expensive of the cards featured in this roundup, but it is waived the first year.

    There's no foreign-transaction fee -- a big plus for those who frequently travel overseas. And, if you miss a payment, the late fee varies based on how much you owe. It's $15 if the balance is under $100, $27 if it's between $100 and $250, and up to $37 if it's $250 or more.

  • Cons - If you're looking for a simple cash back card, this may not be it. The points are most valuable when redeemed for travel, which could take some extra planning.

    Frequent travelers may be able to make the most of the 2 percent back on dining and travel purchases, but the standard 1 percent back on other purchases isn't especially noteworthy.

    The card also doesn't have a 0 percent APR offer for purchases or balance transfers and may have a higher variable APR than some other rewards cards.

Blue Cash Preferred® Card from American Express

  • Pros - The Blue Cash Preferred® Card from American Express has one of the best cash back offers for grocery shopping: 6 percent back on up to $6,000 in purchases each year, after which you get the standard 1 percent back. The 3 percent back at gas stations doesn't have a spending limit.

    The $150 sign-up bonus that is credited to your account if you spend $1,000 in the first three months can help offset the annual fee of $95.

    For the first 12 months, new cardholders get 0 percent APR on new purchases and balance transfers made within the first 30 days.

  • Cons - The Blue Cash Preferred® Card has more fees than many other rewards cards. The annual fee isn't waived for the first year, it has a 2.7 percent foreign-transaction fee, and it also charges a late fee of up to $37.

Capital One® QuicksilverOne® Cash Rewards credit card

  • Pros - The Capital One® QuicksilverOne® Cash Rewards card makes cash back simple by offering 1.5 percent back on every purchase. You don't need to keep track of a rewards program or different spending categories.

    Cardholders get 0 percent APR on new purchases and balance transfers for nine months. The card also does not have a foreign-transaction fee.

  • Cons - The $39 annual fee for the QuicksilverOne® Cash Rewards card is lower than the others here, but it's not waived for the first year and there may be more rewarding no-fee cash back cards. The card also doesn't offer a sign-up bonus.

    Cardholders must pay a variable 23.24 percent APR on balance transfers and purchases after the introductory rate ends. The fee for late payments is up to $35.

Of the three cards, the Chase Sapphire Preferred® could potentially be the most rewarding for big spenders and frequent travelers. The sign-up bonus and option to use your points for cash back, or get a greater value when redeeming them for travel rewards, gives you flexibility. The American Express Blue Cash Preferred®, on the other hand, could be best for grocery runs, and the Capital One® QuicksilverOne® card may be right for you if you value simplicity.

Cash back card comparison chart

The following three cards stand out as good potential choices if you're looking for a cash back card and don't mind paying an annual fee. Here's how the details break down:

Chase Sapphire Preferred®Blue Cash Preferred® from American ExpressCapital One® QuicksilverOne® Cash Rewards
Annual fee$95 (waived first year)$95$39
Sign-up bonus50,000 points (worth up to $625 in travel when you redeem through Chase Ultimate Rewards®) after spending $4,000 within the first three months$150 after spending $1,000 within the first three monthsNone
Basic cash-back offering2 points per dollar spent on travel or dining
1 point per dollar on all other purchases
6 percent back on the first $6,000 spent at supermarkets each year (then 1 percent)
3 percent back at gas stations and select department stores
1 percent back on all other purchases
1.5 percent back on all purchases
Action-dependent additional cash back5,000 bonus points (worth $50 in statement credits) when you add your first authorized user and the new authorized user makes a purchase in the first three months

Get 20 percent off the cost of travel if you pay with points through Chase Ultimate Rewards®
Rewards expiryNot while your account is openNot while your account is openNot while your account is open
Additional perksTransfer points to participating frequent-travel airline and hotel programs0 percent APR on balance transfers (made within 30 days) and purchases for 12 billing cycles0 percent APR on purchases and balance transfers for nine months
Foreign-transaction feeNone2.7 percentNone
Balance-transfer fee5 percent ($5 minimum)3 percent ($5 minimum)None
Standard APR16.24-23.24 percent13.24-23.24 percent23.24 percent

Bottom line

Cash back cards can offer easy-to-use rewards programs, but when the card has an annual fee, it's probably best to compare your potential earnings to the cost before deciding which card is best for you. It's also important to keep in mind that cash back cards may also have higher interest rates than nonrewards cards, and many require good to excellent credit.

About the author: Louis DeNicola is a personal finance writer and educator. In addition to being a contributing writer at Credit Karma, you can find his work on MSN Money, Cheapism, Business Insider and Daily Finance. When he's not revising his budget spreadsheet or looking for the latest and greatest rewards credit card, you might spot Louis at the rock climbing gym in Oakland, California.

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