3 of the Best Cash-Back Credit Card Perks

By Jordan Wathen Markets Fool.com

Card companies are increasingly rolling out new cards with lengthier terms and confusing cash-back rewards programs. To combat the complexity, we ranked some of the best cash-back cards depending on a user's specific spending habits and requirements from a new card.

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Here are the three best cash-back card perks, and five cards that provide some of those perks.

Sign-up bonuses

Credit card companies will effectively pay new cardholders just for opening an account, with a sign-up bonus for spending a certain amount shortly after opening the card. These bonuses can be very lucrative for new cardholders, given that they act as high-double-digit cash-back rewards cards during the sign-up bonus period.

For a no-frills cash-back card with no annual fee and easy sign-up bonus criteria, look no further than JPMorgan Chase's Chase Freedom Unlimited. Cardholders enjoy a $150 cash sign-up bonus for spending just $500 in the first three months after account opening, plus a 1.5% rewards rate on all spending.

In the premier card category, Chase Sapphire Preferred offers a sign-up bonus of 50,000 points ($500 in cash, or $625 in travel) for spending $4,000 in the first three months after account opening. The card's ongoing rewards program is a little underwhelming when points are redeemed for cash, and cardholders should know about its $95 annual fee, which is waived for the first year. But the 1% rewards rate (2% for travel and restaurants) doesn't seem to have ever been its biggest draw; the real attraction (from a cash-back standpoint) is the sign-up bonus.

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Cash-back cards reward you with a portion of your spending on every swipe. Image source: Getty Images.

Recurring rewards

Cardholders who simply want a flat but high rewards rate on every dollar spent may want to take a look at Citigroup's Citi Double Cash Card. While it doesn't offer a sign-up bonus, it does offer a 1% cash-back rewards rate for each purchase, plus 1% cash back as you pay down your balance. In effect, cardholders enjoy a 2% cash-back rate.

Whether cardholders should prioritize the cash-back rate or sign-up bonuses depends on their spending habits. The Citi Double Cash Card tops the Chase Freedom Unlimited only after cardholders spend more than $30,000, due to the Chase Freedom Unlimited's $150 sign-up bonus. For some, that rate of spending may be achieved in months, while others would take several years to put $30,000 on a card.

Category bonuses

People who can optimize their spending among a few cards can typically eke out higher rewards rates by maximizing bonus categories on other cards. The next cards offer the opportunity to earn 5% or more on spending in specific categories like gas, groceries, online retail, and more.

Bank of America's BankAmericard Cash Rewards card is a really great cash-back rewards card all round, serving up an easy-to-reach sign-up bonus, and a healthy rewards rate on big categories like gas and groceries -- and best of all, it doesn't carry an annual fee. Rewards are paid out under a 3-2-1 system, in which cardholders earn 3% on gas, 2% on groceries, and 1% on everything else. Bank of America customers can qualify for bonuses ranging from 10% to 75%, potentially bringing the all-in rewards rate on gas purchases up to 5.25%. You don't need to do anything special to claim your $100 sign-up bonus, though -- just spend $500 in the first 90 days.

Discover Financial Services' Discover it Card keeps it simple with 1% cash back, with rotating categories that earn a 5% rate. The card also doubles all rewards earned in the first year, resulting in a large lump sum of rewards after the cardholder's first anniversary of use. Rotating bonus categories have included gas, restaurants, and Amazon.com purchases, with quarterly bonus caps on the first $1,500 of spending. With no annual fee, and no particularly complicated requirements for the bonus categories (log in and click to enroll each quarter), it may be worth keeping around even if you use it just a few months out of the year.

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Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.