Which No-Fee credit card has the most cash back reward % for ALL purchases across the board, regardless categories?

Credit card companies want your business. I mean, they really want it, and there’s a reason for that. Every time you use a credit card, the place you shop has to pay the credit card issuer (the bank) and the payment network (MasterCard (NYSE: MA), Visa (NYSE: V), or similar) stand in line to earn as much as 3% in various interchange, assessment, and processing fees. Card companies make even more money off card users, in the form of annual fees, cash advance fees, interest payments on card balances, late payment fees, foreign transaction fees, balance transfer fees, and on and on.

More fees than you can shake a proverbial stick at, probably.

All of which is to say, there’s a lot of revenue flowing into the credit card companies. Enough revenue that they can afford to kick back a goodly portion of this money to you, the customer, in order to win your business and keep the credit card game going. Knowing this, when a credit card company offers you a deal in the form of cashback, or “points,” or “miles” in an effort to win your business, it only makes sense that your answer should be: “yes, please.”

But how do you know which credit card deal to accept? How do you cut through the confusion of competing offers, often involving different levels of “rewards” for different kinds of spending, especially when the rewards often depending on the time of year? A good start is to make sure to carry around in your wallet at least one card that offers a decent cashback deal no matter what you buy, and no matter when you shop, all year round.

In fact, that’s exactly what our next inquirer from the Reddit mailbag is looking for.

For simplicity, let’s call our guest Redditor today “Samantha,” or “Sam” for short. Because her request today is mercifully short, sweet, and to the point:

“Just wonder if there is a No-Fee card that earns more than 1.5% cash back for ALL purchases, regardless  categories?”

Ask and ye shall receive

And the answer to Sam’s query is even shorter: Yes, there is. In fact, there are several to choose from. Here’s just a sampling:

• Wells Fargo Active Cash from Wells Fargo (NYSE: WFC) pays 2% cash back on all categories of spending.
• Citi Double Cash is sponsored by Citigroup (NYSE: C), and pays 2% cash back in two stages, 1% immediately when you make your purchase, and 1% more when you pay your bill.
• Fidelity Awards links a credit card to a Fidelity investment account, and deposits 2% cash back in the latter for any purchase you make.
• SoFi similarly deposits 2% cashback into a SoFi (Nasdaq: SOFI) savings or checking account, assuming you have those.
• And arguably best of all is the Alliant Cashback card, sponsored by credit union Alliant. Open an account with them, and they’ll deposit 2.5% cashback in your account. (Don’t open a credit union account, though, and the reward drops to 1.5%).

None of these cards, by the way, charge an annual fee, which makes the 2% (or 2.5%!) rewards even sweeter, because you get to keep all the cash, and not have to hand back some of it, for the privilege of being able to collect any of it.

A little effort can yield a big payoff

Now, is this the best Sam can do, “just” 2%? Not necessarily, no. As multiple respondents on Reddit pointed out, many consumers can outperform 2% cashback by carrying multiple cards that pay better than 2% in specific categories.

For example, you might have one card that pays 3% cashback on restaurant purchases (such as the Chase Freedom card), a second that pays 3% on gas purchases (such as the Blue Cash Everyday card from American Express (NYSE: AXP)), and a third card that pays 5% on whatever eligible category of spending you spend most on in a month, up to $500, such as Citigroup’s Custom Cash Card. Average those three out, and the bulk of your spending in a month may well earn you more than 3% cash back, so more than a 50% improvement over a universal 2% cashback card.

Still, there’s something to be said for the simplicity of just sticking with a 2%-on-everything card. Not least the fact that it’s already 33% better than a 1.5%-on-everything card!

If there’s no more effort to apply for the one than the other, there’s really no reason why you shouldn’t take the card that pays you the most.

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