The New Biggest Cash Back Card Has Launched

I receive compensation for many links on this blog. You don’t have to use these links, but I am grateful to you if you do. American Express, Citibank, Chase, and other banks are advertising partners of this site. I do not write about all credit cards that are available — instead focusing on miles, points, and cash back (and currencies that can be converted into the same).

There’s a new no-fee cash back card from Citibank that will offer most people the highest rate of return in the market.

Citi® Double Cash Card

You earn 1% when you make purchases and then 1% more when you pay off the purchases (which you should do right away, natch).

This is better than the Fidelity Investment Rewards American Express (which I’ve written about for a very long time) if you make purchases at places that don’t take American Express. (It’s a MasterCard.)

This is better than the Barclaycard Arrival Plus World Elite MasterCard if you don’t want to spend your rewards on travel. The Arrival Plus effectively earns 2.2% rebated towards travel. It also comes with an $89 annual fee ($0 fee the first year).

The only cash back card that could potentially be better, it seems to me, is Bank of America’s new offering that will let those who put $100,000 or more in assets on deposit with BofA earn 2.625%.

There’s no signup bonus for the card. It’s just the most solid broadly applicable cash back card on the market, the new benchmark. The Fidelity card was on record six months ago saying they wouldn’t reduce earnings for at least 18 months. That made me think it was plausible they’d do so after 18 months. Having this card in the arsenal may make that less likely, but at least provides an alternative if they do. And it isn’t an Amex.

I favor points over cash back. But I also recognized that if I’m doing any un-bonused spend, I’m effectively buying points at 2 cents apiece, since I could otherwise be earning two cents per dollar spent. I don’t want to do that with most points currencies. So as I’ve long said, a cash rebate like this may be the best option for spending that isn’t going to earn a bonus on a points and miles credit card.

So thrilled to have Citi® Double Cash Card enter the market.

Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Pingbacks

Comments

  1. Gary, this is a ridiculous “analysis”. Arrival comes with 40K signup bonus. Good for $444 in travel rebates. Plus first year AF waived. Plus you get points as soon as purchases post. Plus another 10% when you redeem.

    If you travel (and I presume that’s everyone reading your blog), then the Arrival is hands down a better card. As for Fido maintaining 2% for “at least another 18 months” that’s longer than some of the Citi TY benefits were around.

    I find this entire post highly deceptive. Are these the talking points you were given?

  2. @Paul – After the first year your analysis is flawed. Tough to make up that $89 fee with the extra 0.1% from the Arrival.

    Most people reading this blog already tried the arrival bonus, so can’t dip that again.

    Sorry the Arrival isn’t as competitive as it was yesterday.

  3. @Paul – no no no.

    This is a stronger cash rebate card. This is not a strong bonus card. Two entirely different things.

    You’d have to spend $44,500 in a year where you pay the annual fee on the Arrival card to break-even with this no fee card.

    I’m talking very specifically about rate of return on spending. And I say that Arrival *is* 2.2% back if you redeem for travel. But I have also argued strongly for a long time that the benchmark of value — what you need to compare all of your spend to in terms of rate of return — is the Fidelity Investment Rewards American Express. That’s a 2% cash back card, it’s the ‘opportunity cost’ for rewards on any given purchase. [And it has never offered any referral credit that I am aware of, but it’s still been a very important tool.]

    This card trumps the Fidelity card because it is also no fee but it is a MasterCard, not an Amex so greater acceptance.

    If you don’t like this card, then that’s cool, you wouldn’t like the Fidelity card either. But my advice here has been consistent over the past 3 years or so that I’ve written about the Fidelity card, no incentives involved.

  4. @Eric – Fidelity adds foreign transaction fees too. Fidelity was the benchmark for cash back. This is not meant to be the one ‘killer app’. This doesn’t do everything. It’s the new benchmark for cash rebates.

  5. Nice timing for me. I had grown tored of paying the annual fee on my Citi AA Visa, so I called them last month to cancel. They offered to switch me to a no fee cash back card instead. I accepted, not even asking for the details, just to keep the old account on my credit history. Anyway, it arrived today. It’s “Citi Dividend World Elite MC”, apparently it’s 1% on everything with 5% on rotating quarterly categories. So the only question now is whether to convert again to the 2% card, or to keep it (3Q bonus includes rental cars) and apply for the 2% as a new account.

  6. The Fidelity card offered $50 bonus before. The points it earns are essentially BofA WorldPoints that is more valuable than 1 cent/point.

  7. How does manufacture spending of this card measure up to Barclay Arrival? Doesn’t Citi charge cash advance for purchasing Visa gift cards or Amex gift cards or something?

  8. Gary, Fidelity adds 1% Foreign Transaction fee
    essentially 0% on foreign transactions since you get back 2% (1% cash back after forex fee)

  9. I have my AF waived on my Arrival card. All you have to do is ask for someone from the retention dept. If you travel, the Arrival card is still a better choice.

  10. @Frank there is no cash back card of any kind that sends or creates any 1099. Dont give those guys in DC any ideas.

    Priceline Barclays Visa is a 2% card with a 50.00 signup bonus. So nothing that exciting from Citi. I also have a Cap One card with 2% for gift cards and dush which is about the same as cash to me anyway.

  11. Gary, can you respond to this post and elaborate more on redeeming the 2% from Citi?

    http://freequentflyerbook.com/blog/2014/8/28/blogger-dont-ask-for-credit-card-affiliate-links

    “But today I was shocked, jaded as I am, that Gary Leff wrote about a new 2% cash back card offered by Citi without providing any details whatsoever on the details on the mechanics of the card’s rewards currency.

    Just like the example from Ariana above, that’s a situation that can only possibly come about because the people at Citi who pay Gary Leff (much more than $1,000 per month) don’t want him to write about the mechanics of redeeming the card’s rewards. They don’t want him to write about anything except the talking points they’ve passed along to him.’

  12. Curious about the B of A card – where do you find it? Don’t see it on the bank’s website. Never heard about this card before, and the searches I’ve performed haven’t located any info. Thanks for any help.

  13. @traveling232 I assume you’re the author of that post?

    The claim is absurd, (1) why in the world would Citibank not want me to write about how redemption works? (2) I don’t generally make “much more than $1000 per month” from Citibank?

    Brand new card, kind of excited about it, got news of it up on the first day it’s out. And I provided detail that Flyertalk didn’t have, for instance the offer page doesn’t mention it’s a MasterCard (not something Citi sends out in its marketing info either).

    But I also know better than to swing at a pitch in the dirt… (interesting that others covering the card don’t mention the one thing you’re apparently most interested in, but the post doesn’t call them out because they’re less-read and wouldn’t generate the notoriety/traffic) I’ll be following up on the card, but not because of wild theories and personal attacks. 😉

  14. I think it’s a good thing that you respond to people, because it gives more insight into your thinking and clarifies misconceptions (when that’s what comments consist of).

    I’m not really excited about this card due to lack of a signup bonus, since much of my spend goes to clearing signup bonuses or earning category bonuses anyway – not that much available for the simple 2% cash back. But it’s undoubtedly a fine choice for some, and without an annual fee it’s one you can keep and just use when you feel like it.

  15. Hey Gary, no, it was not the author of that blog post. Just a random reader out there who was curious what he was talking about. I’m sure all the details will come out in due time about the program. Thanks for replying!

  16. @traveling232 – there are great questions, I’ll share the answers soon [heading into a bunch of meetings]. Just didn’t see how ‘he didn’t explain the mechanism for the rebate = black helicopters’ happened, that makes me sad. Something to do with underwear gnomes probably. Ask a question, follow up with the answer, and the answer turns out to be kind of interesting actually.

  17. “You’d have to spend $44,500 in a year where you pay the annual fee on the Arrival card to break-even with this no fee card.”

    It’s $4,450 in a year, which is not that terribly bad.

    But I agree, this appears to be a strong CB card. I don’t see why emotions are flying here. Just use Fidelity when there is a risk of cash advance. Use Citi in places that don’t take AMEX. Don’t use either abroad. What’s with all weird accusations?

  18. @Andy Shuman, actually it’s $44,500 — not $4450.

    You’re earning only an incremental 0.2% return over, say, the 2% cash back card from Fidelity and that’s what needs to justify the fee.

    $44,500 * .002 = $89

    You don’t cover the fee with the incremental earn from Barclaycard Arrival+ until you’ve put $44,500 on it [in a year where the fee is charged].

  19. Gary – poppycock nonsense!

    How many years of AF does the $444 Arrival signup bonus cover? A: 5 plus the first year waiver, so total of 6.

    Even IF Arrival only offered 2% (vs 2.22%), it would take 7 years before the Citi card would a better deal. But of course you get 10% bonus for the Arrival, so compound that for 7 years and you’re closer to 8 years.

    And if you put any spend on the card at all, Barclays offers retention bonuses to cover the annual fee (FT thread showing multiple reports of retention offers to waive the AF).

    As such, it’s a flaming Red Herring to suggest Barclays is “only” better for first year when the AF is waived.

  20. @Paul but you get the signup bonus in the first year, you don’t get it again. Arrival is clearly better in that year because of it. But after that, going forward, you have a fee but no signup bonus. I think I’m clear in the post that in any year in which there is a fee on the Arrival card it isn’t better. And it isn’t necessarily better to earn 2.2% credit towards travel than to earn almost as much cash, but treating arrival’s credit as cash then whether there ‘s a fee in a given year (it hasn’t been around long enough to know if anyone will get that fee waived on a continuing basis) it’s not as good…

  21. Gary,

    How much do you value a Starpoint? In other words, for non-bonused spend, would you prefer to earn 1 Starpoint or 2.2% cash back?

  22. Gary,
    Good analysis. People got “jaded” by the Arrival card. It’s the emotion that is playing their decisions.
    That $44,500 extra spend on Arrival, to recover the $89 AF, is hard to “swallow” for them so they will just keep arguing and arguing.

    Folks,
    2%+ cash back cards gives you the flexibility to use the $$ any way you want w/o having to pay the nasty $89 AF for a measly 0.2% extra reward for travel on Arrival.

Leave a Reply

Your email address will not be published. Required fields are marked *