1% or Better Cash Back Cards with No Annual Fee

Legend

Cash Back Tiers / Earning Method / Reset  The cash rebate percentage for normal credit card spending. Where applicable, details on the "spending tier" levels.

Cards with spending tiers offer more cash back as you spend more on the card. For example, American Express Blue Cash pays 0.5% cash back on the first $6,500 spent on the card. Purchases after spending $6,500 earn 1.25%.

Tiered reward programs revert to the lowest paying tier upon a "reset event." Rewards programs that reset every year are marked "Reset Annually." Programs that reset upon redemption are marked "Reset on Cash Out."

The "Earning Method" describes whether you have the chance to earn more money by waiting longer to cash out.

The "as you spend" earning method always pays the cash back percentage of the spending tier, regardless of when you cash out. With this earning method, it makes sense to cash out as often as allowed by the reward program.

The "accumulated" method pays the cash-out tier's percentage rate for all spending. The accumulated method pays better than "as you spend," assuming the tier spending levels and percentages are the same. However, you'll likely wait longer, maybe years, between reward redemptions to earn the better rate of return.

Check the "Rewards Cap" column to ensure reaching the top tier is realistic. Rewards often have an expiration date in cumulative cash back programs.

Bonus Categories  The card may offer more cash back for various spending categories. The percentage shown is the total cash back these purchases earn; it is not in addition to the standard cash back percentage shown in the first column.

"Rotating" indicates the spending category is only available during certain months of the year. Knowzy publishes the bonus category calendar for each card under its footnote.

Earn better returns by timing your purchases to coincide with bonus category months.

 "Average" (the percentage on the right side of the slash) applies to rotating categories. It indicates the percentage of cash back if you were to spend consistently in the rotating bonus category over a year.

The average percentage is calculated by dividing the actual bonus cash back percentage by 12 (months) and multiplying the result by the number of months the bonus is available. For example, Chase Freedom offers 5% cash back on groceries for 3 months out of the year. 5 percent divided by 12 is 0.42 and 1/3 percent times 3 is 1.25 percent.

You must sign up for rotating bonus categories in most rewards programs. Failure to sign up means your purchases will earn the standard cash back percentage. The credit card company usually allows you to sign up a month before the offering the bonus category.

The merchant, not the credit card company, declares the category to which it belongs. You can look up what category a retailer reports itself as on Visa's web site (of course, the category may vary for MasterCard, American Express or Discover).

Bonus Mall  Many companies offer additional cash back at major online retailers. Where available, we provide a link to the complete list of stores and cash back bonus. To earn the additional cash rebate, you must start shopping from the credit card's bonus mall; you do not earn the bonus if you go directly to the online store.

Cash Out Event  Describes when you can turn your accumulated rewards into cash. Most cards have a minimum threshold, such as $25 in earned rewards, before you can cash out. Others, like American Express Blue Cash, automatically give you a statement once per year. CaptialOne's No Hassle Rewards lets you cash out any time.

Reward Caps  If rewards expire or are limited to a certain amount, it is listed here. Some cash back cards, like CitiBank's Platinum Select, limit the total amount of cash rewards you can earn in a year. Others, like Chase and Discover, limit the amount you can earn in bonus categories. On a few cards, the cash you earn can expire if you don't redeem it in a timely fashion.

Footnotes

1  Chase Freedom offers 5% cash back on all categories listed in the chart. However, Chase only offers each category for 3 months out of the year. This means each category averages 1.25% cash back unless purchases are timed for better returns.

2  Chase limits the 5% cash back reward to a certain amount. After the limit is reached, purchases in the 5% category earn 1%. You must sign up for the 5% cash back bonus every 3 months.

Here are the 5% cash back categories and limits for 2011:

• January – March:  $1,500 spending limit; $75 maximum reward; Categories: Grocery Stores, Drug Stores
• April – June:  $1,500 spending limit; $75 maximum reward; Categories: Home Improvement, Lawn and Garden, Home Furnishings
• July – September:  $1,500 spending limit; $75 maximum reward; Gas, Hotels, Airlines
• October – December:  $1,500 spending limit; $75 maximum reward; Dining, Department Stores, Movies, Charity

3  This is not a complete set of categories. Knowzy is still trying to get the complete 2010 bonus category calendar from Citi's public affairs department. CitiCard offers as much 5% cash back in categories that rotate throughout the year. 1.25% represents the average cash back bonus over the course of a year. Timing purchases to coincide with bonus categories will yield better returns. Learn more about how the average is calculated in the Legend section under Bonus Categories. You must enroll in the cash back bonus program every 3 months.

4  You can earn no more than $300 in rewards per year ($30,000 in spending). This limit doesn't apply to bonus mall purchases- they always earn rewards. You must make at least one purchase every 12 months in order to maintain your rewards balance.

5  Purchases from stores categorized as "warehouse clubs" always earn 0.25%, regardless of spending tier. Call Discover at 1-800-347-7896 for the current, complete list of stores. As of December 30, 2010, these stores are:

• Walmart
• Walmart Neighborhood Market
• Sam's Club
• Costco
• BJ's Wholesale Club
• Supermercado Amigos

Grocery stores affiliated with these warehouse clubs also earn 0.25% cash back. Affiliated gas stations earn the full reward.

6  Discover More offers 5% cash back on all categories listed in the chart but not for the entire year. The percentage listed represents the cash back bonus when averaged out over the year. Timing purchases to coincide with bonus categories will yield better returns. Learn more about how the average is calculated in the Legend section under Bonus Categories. You must sign up for each set of categories to earn the 5% cash back bonus.

7  Discover limits the total reward you can earn in the 5% Cashback Bonus categories. After the cap is reached, purchases in these categories earn the standard cash back rate, which is 1% if your spending has exceeded $3,000 for the year or 0.25% if you've spent less.

Here are the 2011 5% cash back categories and their limits:

• January – March:  $800 spending limit; $40 maximum reward; Categories: Airlines, hotels, car rentals, cruises, restaurants
• March:  $200 spending limit; $10 maximum reward; Grocery stores, drug stores
• April – June:  $400 spending limit; $20 maximum reward; Categories: Home improvement stores, department stores, clothing stores
• June:  $200 spending limit; $10 maximum reward; Grocery stores, drug stores
• July – September:  $300 spending limit; $15 maximum reward; Gas stations, hotels, movies, theme parks
• October – December:  $300 spending limit; $15 maximum reward; Restaurants, department stores, clothing stores

8  You must make credit card payments on time for six months in a row to receive a full month's interest as a cash back bonus.

9  2% cash back bonus only applies to the first $250 in spending on gas and restaurants per month. Any spending in these categories beyond $250 earns the standard cash back rate of 1% (or 0.25% if total spending for the year is below $3,000).

10  Tiers are based on the balance maintained in a companion savings account, not on spending. The required Emigrant Direct American Dream savings account must have an average balance of over $10,000 for 6 months to qualify for 1.4% cash back on purchases made with the Emigrant Direct World MasterCard.

11  Groceries no longer earn 2% beginning March 1, 2011.

12  Even if you put up the $2,500 required to open a Fidelity brokerage account, American Express or Visa may still deny your application based on your credit history. See footnote 4 in Chart 2 to learn more about becoming eligible to apply for the card.

13  Eligibility to join the PenFed credit union doesn't guarantee you will be approved for the Platinum Rewards Cashback card. Approval is based on your credit worthiness. See footnote 6 in Chart 2 to learn more about becoming eligible to apply for the card.

14  Joining the Navy Federal Credit Union (NFCU) doesn't guarantee your approval for the cashRewards card. Approval is based on your creditworthiness. See footnote 8 in Chart 2 to learn more about becoming eligible to apply for the card.

16  CapitalOne conceals the retailers offering a cash back bonus in its Perk Central mall. You must log in to a CapitalOne online account to see the list. The majority of stores in the ShopDiscover mall also participate in CapitalOne's Perk Central.

17  Discover doesn't announce their quarterly bonus category spending limits until shortly before the categories are offered to customers. The chart uses the previous year's spending limits when the current year's limits are not available. Historically, these limits do not change drastically from year-to-year, if at all.

18  Bank of America pays a bonus of 10% of the redemption value when redeemed into a linked BofA checking or savings account. For example, if you redeem $50 in rewards, Bank of America deposits $55 in your account.

19  Only the first $1,500 in bonus category spending per quarter earns 3% or 2% cash back. This is a $45 cash back bonus maximum every three months. You earn 1% cash back for spending in bonus categories after exceeding the $1,500 cap.

20  Every year on your sign-up anniversary date, CapitalOne pays a bonus of 50% of last year's earnings. For example, if you earned $200 in cash rewards in a year, CapitalOne credits you another $100 in rewards at the end of the year. It's equivalent to 1.5% cash back but with a long wait between redemptions for 0.5% of the 1.5%.

21  You must have excellent credit for CapitalOne Cash. The Cash Rewards for Newcomers and Journey Student Rewards cards offer 1% back to applicants with "Average Credit."

22  Earn $500 cash back by spending over $5,000 in the first 3 months on your new Citi Dividend World MasterCard. This is a limited time offer.

If that's too rich for you or you missed your chance to apply, the $100 cash back cash back offer only requires you to spend $500 on your Dividend World card in the first three months.

Legend

Prerequisites  You might need to meet certain requirements before you can apply for some cash back cards. Fidelity cards require a brokerage account. You must be eligible to join the Pentagon Federal Credit Union before you can apply for their card. Meeting the prerequisites does not guarantee your approval for the reward card; approval is based on your credit history.

Introductory Offer  More often than not, credit card companies offer an enticement to sign up with them. It might be a low or 0% introductory interest rate for a period, a balance transfer with favorable terms or even some cash. An introductory offer could be the deciding factor between two similar cards.

Fine Print  Includes links to cardmember agreements, details on reward programs, required disclosures, Schumer's box, legalese and any other small print the credit card company makes available online. Some companies are more forthcoming than others are.

Footnotes

1  You must have excellent credit for CapitalOne Cash. The Cash Rewards for Newcomers and Journey Student Rewards cards offer 1% back to applicants with "Average Credit."

2  Requires an Emigrant Direct American Dream savings account, which is paying 1% interest as of January 11, 2011. The 1.4% cash back rate on the Emigrant Direct World MasterCard requires a $10,000 balance in the savings account.

3  You must spend $100 on the BankAmerica Cash Rewards card in the first 60 days to earn $50 bonus.

4  Only Fidelity brokerage account customers can apply for card. Fidelity requires $2,500 minimum to open a brokerage account. You can park the $2,500 in a mySmart Cash account with a low interest rate- 0.1% as of January 11, 2010.

5  Even if you put up the $2,500 required to open a Fidelity brokerage account, American Express or Visa may still deny your application based on your credit history. See footnote 4.

6  Pentagon Federal Credit Union (PenFed) is open to members of the military and their families, certain US government agencies and members and volunteers of the American Red Cross. Another option is joining National Military Family Association (NFMA) for a $20 annual fee. It is not necessary to maintain membership in NMFA once PenFed membership is established. Full details are on PenFed's How to Join page.

7  Eligibility to join the PenFed credit union doesn't guarantee you will be approved for the Platinum Rewards Cashback card. Approval is based on your credit worthiness. See footnote 6.

8  Navy Federal Credit Union (NFCU) is open to members of the armed forces, including the National Guard, Department of Defense employees and family members. See complete details on the NFCU web site.

9  Joining the Navy Federal Credit Union (NFCU) doesn't guarantee your approval for the cashRewards card. Approval is based on your creditworthiness. See footnote 8.

10  Must spend $500 in the first three months on the Chase Freedom card to qualify for $150 cash back. Reward shows up 6 to 8 weeks after it is earned.

11  Earn $500 cash back by spending over $5,000 in the first 3 months on your new Citi Dividend World MasterCard. This is a limited time offer.

If that's too rich for you or you missed your chance to apply, the $100 cash back cash back offer only requires you to spend $500 on your Dividend World card in the first three months.

12  Must spend $500 in the first 90 days on the BankAmericard Cash Rewards Visa Signature card to qualify for $250 cash back. Reward appears as statement credit 8 to 12 weeks after it is earned.

13  Must spend $500 in the first 90 days on your CapitalOne Cash card to qualify for $100 cash back.