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What is the best cash-back reward credit card?

Credit Cards » What Is The Best Cash-Back Reward Credit Card?

Not all cash-back credit cards are created equal, so Bankrate aimed to find out which ones offered the best rewards redemption in its 2013 Credit Card Cash-Back Rewards Survey. The results showed that while there was no clear winner, there's probably a best card -- even if it's not the same card -- for every type of card user.

The trick is to know what kind of cardholder you are. For example, do you prefer strategic shopping to get higher returns, or would you rather get the same cash-back return on all your spending? Do you swipe your cash-back card for every purchase or only use it on occasion? Depending on your credit card habits, there's probably one that's the best fit for you.

Cards that require planning

Budget-makers and financial strategists would probably dig the machinations it takes to maximize cash-back cards that offer different reward redemption rates on certain spending categories. Twenty-one cards in Bankrate's 2013 survey offered accelerated earnings for specific permanent categories such as dining, travel, groceries and gas.

Four cash-back rewards cards in the survey were even more complex, with rotating categories that require quarterly registration. In one instance -- the U.S. Bank FlexPerks Travel Rewards Visa Signature Card -- cardholders get double rewards on the category they spend the most on each month such as gas, groceries, airline travel or cellphone bills.

"(This) means that consumers have to spend more time understanding and monitoring these more complex cards," says Bill McCracken, CEO of Synergistics Research Corp. in Atlanta. "So (that's) more frustration, but (for a) potentially richer payback."

Paying for your rewards? Find out now!

Too busy? There's a card for that

Overscheduled moms and others juggling a lot of responsibilities would rather have a cash-back card that is uncomplicated and straightforward. Seventeen cards in Bankrate's survey feature a flat cash-back ratio on all purchases -- ranging from a half-percent to 2 percent -- that wasn't affected by annual bonuses, tiered redemption or category spending.

"These consumers should get a card that has a simple structure and that offers auto-redemptions if possible," says Amy Lenander, vice president of rewards programs at Capital One. "That way, they get their rewards without spending too much time on it."

Cash-back cards come with numerous ways to redeem rewards, perfect for the convenience user. Some will issue rewards as checks, statement credits, gift cards or charity donations. Others will automatically deposit rewards directly into a bank account.

Best cards for light users

The occasional cash-back card user would be smart to stay away from cards that charge annual fees, says John Ulzheimer, president of consumer education at SmartCredit.com. Eleven cards in the Bankrate survey came with an annual fee, ranging between $12 to as much as $400.

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