What Is A Rewards Card?

We run a pretty tight financial ship here in the PoP household, and helping us do so is judicious use of rewards cards for almost all of our everyday spending.


What Is A Rewards Card?

A rewards credit card is a card that lets you earn rewards (like cash, points, travel, gifts, etc) for using it to do your everyday spending.

Our personal favorite type of rewards credit cards are cash back rewards cards.  We like the flexibility of being able to use the cash on whatever we want without being limited by what’s available in the current “points catalog” for a given card.

To maximize our rewards, we limit ourselves to no fee cash back rewards credit cards.


No Fee Cash Back Rewards Cards FAQ

  1. What Is Cash Back? Cash back is a refund given to you by the credit card company that is a percentage of the charges that you make every month.  A 5% cash back bonus would give you $5 for every $100 in spending.  Depending on the card, these can be given to you as a statement credit, a direct deposit, or a check in the mail.
  2. Why No Fee?  With no fees, you can get used to them and used to maximizing your rewards without worrying if you’re spending enough to make up for the fees.  You can always upgrade to cards with fees (and earn more sign-up bonuses!) once you’re confident that you’re earning more than enough in rewards to justify the fees.
  3. What Is An APR?  It’s the annual percentage interest rate that you’re going to be charged on any balance you carry on the card.  But if you’re going to carry a balance, these aren’t the cards for you.  In general, you’re going to have a higher APR on cash back rewards cards (after all, the companies need to earn the money to reward you!), so cash back rewards should be something you never carry a balance on.  Never.  Seriously.  Never.
  4. When Do I Get My Money?  For these cards, whenever you want it.  The easiest method is to request a statement credit, which applies the cash back directly as a payment to your bill.  We like to save our rewards up every year and use them for holiday spending.  It’s our little method of budgeting for the holidays without feeling like we had to work for it.
  5. What Percent Cash Back Can I Get?  This depends on the card, the time of year, and sometimes even the time of day.  Okay, maybe not the time of day.  Hey – no one said this was easy.  But we’re here to make it as easy as possible.  All the cards we list below have a minimum 1% cash back on all of your spending all of the time.  That part’s easy.  Beyond that, there are certain categories of purchases that you’re going to be able to earn bonus rewards that are as high as 5% (sometimes even 10% in special cases!).  Depending on the card, these bonus categories rotate quarterly – so make sure to check the specifics of the cards below.
  6. Show Me The Money!  How Much Can I Earn?  The top three cards shown below are what we use.  For these cards, there is no cap to potential rewards you can earn.  But remember, spending $100 just to earn $5 cash back isn’t really a wise investment.  We earned almost $1,100 in 2012 by putting our everyday spending on the American Express Blue Cash Everyday, Chase Freedom, and Discover It and maximizing across their various bonus programs.


The Best No Fee Cash Back Credit Cards

Here’s a table with some of the best no fee cash back rewards cards out there right now.  We consider the top three to be some of the best rewards cards out there, with the remainder all being solid runners up.

To apply for any of these cards, click the name of the card in the table.

[table “1” not found /]



Just a reminder, some of the links on this page are affiliate links, which means if you sign up through the affiliate link, Planting Our Pennies will get a small payment for referring you.

2 comments to What Is A Rewards Card?