Is your rewards credit card giving you the cash back you deserve?
Money expert Clark Howard considers 2% cash back on all purchases from a no-annual-fee credit card the ideal starting point for consumers looking to maximize credit card rewards.
But is it possible to beat that cash back return without paying a hefty annual fee?
You probably know about credit cards that will give you 3% cash back or more on certain categories. But that's not a replacement for having an "everyday spender" at 2% back, as most of those cards pay a putrid 1% back on non-bonus spending categories.
There is another potential option: No annual fee cards that offer boosted rewards for participating in a bank or credit union’s ecosystem.
These programs aren’t for everyone. There are some balance and/or product requirements that may make the extra rewards “not worth the hassle” to many consumers. However, dedicated rewards chasers may be up for the challenge.
In this article, I’ll show you a few credit card rewards programs that offer you better than 2% back on your credit card spending if you’re willing to commit to banking and/or investing with a particular institution.
Alliant Visa® Signature Cashback Card
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Annual Fee:
$0.00
Rewards Program Details:
Tier 1 rewards members receive 2.5% cash back on all purchases up to $10,000 in spending per billing cycle. After that, they’ll receive 1.5% back for the remainder of the billing cycle. Tier 2 rewards members receive 1.5% cash back on all purchases.
This Is the Card for You If:
You are willing to join a credit union and keep money there in exchange for a great return of 2.5% back with no annual fee or categorical restrictions. |
We talk about this card a lot in our credit card content, and for good reason!
It offers up to 2.5% cash back on $10,000 worth of everyday purchases each billing cycle. To earn this return, which has no spending category restrictions, you have a few hoops to jump through.
First, you must become a member of Alliant Federal Credit Union. There are some qualifications that may get you in at no cost, but you can also join with a $5 donation to a non-profit.
Once you’re in their ecosystem, you have to open an Alliant High-Rate Checking account. Then, you have to maintain a daily average balance of $1,000 during the preceding calendar month in order to earn the 2.5% rate during the current billing cycle.
Some of the basic requirements for keeping yourself eligible for the Alliant High-Rate Checking account are signing up for eStatements and making at least one electronic deposit to the account each calendar month. The electronic deposit can be a direct deposit, ATM deposit, mobile check deposit or transfer from another financial institution.
Bank of America Preferred Rewards® Program
Bank of America has a menu of credit cards that are eligible for boosted rewards via the Bank of America Preferred Rewards® program.
To earn enhanced rewards with your BOA credit card, you need to utilize complementary banking and investing products offered by BOA and Merrill.
An example of a credit card that could work for beating 2% back this way is the Bank of America® Unlimited Cash Rewards Credit Card.
This card offers unlimited 1.5% cash back with no annual fee, which is not quite good enough to make it onto our list of recommended cash back cards by itself.
But the Preferred Rewards program can boost the cash back on everyday spending to as much as 2.62% if you qualify for the highest tier via your banking and investing services aligned with BOA.
We spoke to money expert Clark Howard about whether participating in this program is worth it, and we laid out the pros and cons.
The general sentiment is that it’s not worth signing up for these products just to eke out extra credit card rewards because fees on other services may eat away at your returns. However, existing BOA customers who are happy banking there may have an easy path to beating 2% cash back by using a card like the Unlimited Cash Rewards.
Fidelity Rewards+® Program
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Annual Fee:
$0.00
Rewards Program Details:
Earn unlimited 2% cash back on everyday spending when redeemed as deposit into Fidelity investment accounts. You can spend your rewards or deposit them into any eligible Fidelity account, giving your money more chances to grow.
This Is the Card for You If:
You want a cash back rewards card that can aid your investing goals. This card can deposit rewards directly into Fidelity retirement and investment accounts. |
If you read our credit card content often, you know that we're big fans of the Fidelity® Rewards Visa Signature® Credit Card.
It offers unlimited 2% cash back on all spending if you use your rewards toward a qualified Fidelity investment account. That makes this card a great way to simultaneously earn solid rewards on your spending and passively invest in things like a Roth IRA.
But there’s a way for some Fidelity investors to get even more rewards out of this card.
Investors who are signed up for the Fidelity Rewards+® Program can earn up to 3% cash back with this card if they have a certain amount of money professionally managed via their Wealth Management program.
Here’s how it works, via the Fidelity Rewards+ FAQ:
"As a card owner and participant in the Fidelity Rewards+® program for Wealth Management clients, you have two ways to earn rewards. The first is by using your Fidelity® Rewards Visa Signature® credit card. When you use the card you'll earn 2% cash back. Then, depending on your Fidelity Rewards+ program tier, you'll earn up to an additional 1% cash back. Note that the additional reward is variable, with the Gold tier earning an additional .25% and Platinum tier earning an additional .5%."
Gold members can earn 2.25% cash back, Platinum earns 2.5% back, and Platinum Plus earns 3% back.
However, it is worth noting that Fidelity has “paused” new membership for this program as of August 2024. So you’ll need to either be an existing member or wait for membership to reopen in order to take advantage of this deal.
Do you have a strategy for beating 2% cash back on your everyday spending? We’d love to hear about it in the Clark.com community.
The post Credit Cards That Can Beat 2% Cash Back on Everyday Purchases appeared first on Clark Howard.
