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Somewhere, there's a catch
Arnold, the author of "How You Can Profit From Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line" and founder of CardRatings.com, cautions to be wary of the fine print.He notes, for instance, that the ExxonMobil MasterCard requires that rebates be used within six months of being earned. Otherwise, they expire.
You also need to check closely how rebates are paid. Some cards issue monthly or annual checks. Other plans apply the rebates to future purchases. Still others accumulate points that may be redeemed for cash, merchandise or airline miles. Some cards cap the amount of rebates.
"A consumer should take at least 20 or 30 minutes to research the reward plans," Arnold said, calling it time well spent to avoid surprises later.
You'll find the details on top-rated rebate cards from CreditCards.com here and those from CardRatings.com here.
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The experts' picks
- The Chase BP Visa Rewards card drew kudos from Arnold and CreditCards.com's director of consumer research, Ben Woolsey. Its drawbacks are noted above, but it's the biggest rebate going.
- The American Express Blue Cash card pays a comfortable 5% rebate on purchases at supermarkets, gas stations and drugstores, but only after $6,500 in charges. Until that point, it rebates only 1%. "The aggressive charger might find the Blue Cash card is just for them," Arnold says, noting that a family that charges most of its purchases could rack up $6,500 pretty quickly.
- Arnold also likes the Discover Open Road card, which offers 5% back on gas and auto-maintenance purchases. "But there is a $100-a-month spending limit on that rebate," he notes. Spend more than $100 a month, or $1,200 in a year, and the rebate drops to 1% or less. But partnerships with 80 other companies can as much as double the value of the rebate.
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- Costco's American Express TrueEarnings card offers an unlimited 3% rebate on gasoline and dining expenses, 2% on travel and 1% on all other purchases. The rebate comes annually in the form of a coupon redeemable at Costco for cash or merchandise. Though the card can be used at any gas station, if you shop at a Costco that sells gasoline, its rock-bottom gas prices are an added bonus to the rebate.
- Woolsey also likes the Chase PerfectCard MasterCard (3% on gas and 1% on other purchases, 6% for the first three months) and the Capital One No Hassle Points card (5 points per dollar on gas and 1 point per dollar on other purchases), though points can be more of a hassle to redeem than straight cash.
Published May 2, 2008
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