Which cash-back credit cards are best for you?
Posted By Herb Weisbaum
Over the past year, a lot of banks ditched their debit card rewards programs while continuing to push their cash-back credit cards.
All cards are not created equal, but there are resources out their to find the best card for you.
According to a report from Bankrate.com, nearly half of the cash-back credit cards it surveyed pay back 1 percent from the first dollar of spending. About 14 percent of the cards pay more than 1 percent, and relatively few charge an annual fee.
"If you have a cash-back credit card and you're not getting at least 1 percent back on all of your purchases, or you're paying an annual fee, it's time to search for another card," said Greg McBride of Bankrate.com.
To encourage you to use their cash-back card, some banks haven an introductory offer that's mighty sweet.
Reach a certain spending threshold within the first couple of months and you get extra money back.
For example, with the Chase Freedom card if you spend $500 in the first three months you get a $100 cash bonus.
McBride said many cards pay 5 percent on certain shopping categories, such as gasoline, groceries and travel. These bonus categories rotate every month or every quarter.
But there's a catch: You have to sign up for the bonus.
"You get halfway through the quarter and realize you never signed up, you've missed out on that higher payout ratio for whatever purchases you've made up until that point," McBride said.
As with all reward cards, cash-back cards charge a higher interest rate than traditional credit cards.
That's why these cards are only for people who pay off the balance in full each and every month.
"If you carry a balance even occasionally, the interest charges will more than wipe out whatever reward that you've earned," McBride said. "So even if you only carry a balance once or twice a year, you need to focus instead on the lowest interest rate possible and ignore the rewards cards."
You also need to be careful that you're not tempted to spend more and bust you budget just to rack up that cash-back reward.
Here are a few good sites that make it easy to compare credit card offers: Bankrate.com,
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