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What’s the Catch With Cash Back Credit Cards?

Editor’s Note: The credit card offers in this article have expired and are no longer available.

Earn 5% cash back just for shopping and using your credit card. Get bonus rewards each time you make purchases in common categories, like gas and groceries. It sounds almost too good to be true… and in some cases it is.

If you have good to excellent credit (a FICO credit score of about 700 or more), you can qualify for some of the top-tier rewards credit cards that offer cash back of 5% or more, with no annual fee and a host of other perks and benefits. Pay your balances in full each month so you don’t pay interest on your purchases, and you could be earning hundreds of dollars a year — simply by using a good cash back rewards credit card.

Last Christmas I used my Chase Freedom card and earned more than $100, which was a nice bonus in January when money always seems to be tight. I did it by activating the bonus categories, shopping carefully, and using the Chase Ultimate Rewards Mall online to earn even more (10% or more) at select retailers.

Of course, I also made sure I had the money in the bank to cover my credit card balance before I accrued interest. For many people, that’s the biggest “catch” when it comes to managing credit and maximizing rewards credit cards.

Let’s look at some of the other ways you’re not getting as much as you might think with a few of the most popular cash back rewards cards. We’ve ranked the cards below based on the amount of fine print we found with each program.

Editor’s Note: The following credit card offers in this article have expired and are no longer available.

Some Fine Print: Chase Freedom
With Chase Freedom you start earning 1% cash back right away, with no cap on how much you can earn — except in the changing categories that allow you to earn 5% cash back. With Chase, you’ll earn 5% cash back on purchases up to $1,500 net each quarter, which equals $60 cash back. Of course you have to remember to activate the bonus categories to earn points, and you have to remember which categories are active for the quarter.

There’s no limit to the bonus points you can earn in the Ultimate Rewards Mall, but there’s something else to watch out for. You may be able to find what you’re shopping for at a lower cost elsewhere.

I was recently shopping for books and DVDs and decided to shop at BN.com through the Chase portal to earn bonus points. But I decided to check Amazon.com (not a Chase partner) before I finalized my purchase. Amazon had all three items for less money (with free shipping), even after I factored in the bonus points. I used my Chase Freedom card to earn the base 1% cash back and shopped at the website with the lower price.

Chase is also currently offering new cardholders a sign-up bonus with the Freedom Card. However, there is a small catch with this as well. You don’t earn your bonus with Chase until you spend $500 or more on purchases in the first three months of account opening.

That’s just the start of the various qualifications you must meet to maximize your rewards on these cards.

No Fine Print: Blue Cash from American Express

Editor’s Note: The following credit card offers in this article have expired and are no longer available.

With its recently revamped rewards program, American Express Blue Cash now seems to have far less “fine print” behind its rewards program. You earn 3% cash back at supermarkets, 2 % back at gas stations and department stores, and 1 % on all your other purchases. You don’t have to “opt-in” and you start earning at the bonus rate immediately. Additionally, there’s no cap to how much you can earn at the bonus rate.

I mentioned how I used my Chase Freedom card to shop through Amazon. Looking back, I really should have used Blue Cash because of the fact that Amazon is considered a department store through the Blue Cash Rewards program, meaning you earn 2% back on purchases (or 3% with the preferred version), which beats Chase Freedom and actually matches the Amazon credit card. Terms and limitations apply.

At CreditShout, we’re big fans of this card and recommend it over the other cash back cards in many cases. If you can look past the sign-up bonus offered by Chase Freedom or aren’t a fan of the rotating rewards categories offered by the other cards, then Blue Cash is definitely the better choice. Terms and limitations apply.

Dawn Allcot joined the CreditShout team over two years ago. Since then, she’s been sharing her knowledge and enthusiasm for managing credit and saving money through responsible credit card use.


Disclosure: Credit Sesame is an independent comparison service provider. Reasonable efforts have been made to maintain accurate information throughout our website, mobile apps, and communication methods; however, all information is presented without warranty or guarantee. The editorial content on this page is not provided by any company or credit card issuer. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, not those of any company or credit card issuer, and have not been reviewed, approved or otherwise endorsed by any company or credit card issuer. The offers that appear on this site are from companies from which we may receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all companies or all available products or credit card offers. All images and trademarks are the property of their respective owners.

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