Capital One No Hassle Cash Rewards MasterCard (For Excellent Credit)

This card offers better than average cash rewards. Since it's a MasterCard, it's more widely accepted than Discover Card.

• People with excellent credit who want to earn cash rewards on their credit card spending. 

Credit Rating Required 

• Excellent (740+)

Pros

• Generous cash-back rewards.
• No annual fee.
• No balance transfer fee.
• Relatively low APR.
• No over-limit fee.
• Flexible rewards redemptions.

Cons

• Not available for people with weak credit.

Rewards

• 2 percent cash back on purchases at gas stations and major grocery stores, 1 percent on all other purchases.

APRs

• 0 percent for first 12 months on purchases, then 14.9 percent.
• 14.9 percent on balance transfers.
• Penalty interest rate: 29.4 percent.

Fees

• Annual fee: none.
• Late payment fee: $15 to $39.
• Over the limit fee: None.
• Return check or payment fee: $39.
• Balance transfer fee: None.

This card is an attractive cash-back rewards card. It pays a full two percent back on purchases at gas stations and "major" grocery stores (i.e. not convenience stores) and one percent everywhere else. That's a better deal than Discover's "up to" one percent cash back. Also, since it's a MasterCard, it's accepted at more places than Discover and American Express.

The card also has a flexible rewards redemption feature. You can redeem your rewards upon request, automatically at a set time each year, or automatically when you reach a specific threshold such as $25 or $50. You can also redeem your cash for gift cards starting at $20. By contrast, some comparable cards don't let you redeem your rewards until you've reached $50 or more in rewards. You let Capital One know which option you want.

The lack of a balance-transfer fee is a nice feature, but the relatively high APR negates that benefit. If you have excellent credit, there are many cheaper alternatives below 14.9 percent, even if you have to pay a balance transfer fee. In any event, you shouldn't carry a balance on a card where you're trying to earn rewards.

Capital One has another version of the No Hassle Cash Rewards Card for limited credit. The limited credit version is an option if you've never had a credit card (or have had one but for less than three years) and you have limited credit history.

I highly recommend this card because of its generous cash-back rewards program and its flexible redemption policy.