Citi just launched a new credit card, and it actually has a somewhat novel approach to cash back.
In a nutshell, you earn 1% cash back for every purchase, and an additional 1% cash back when you pay off the purchase.
So at the end of the day you can earn 2% cash back for all your spending, which ain’t too shabby. And it’s unlimited!
There aren’t any categories to worry about and you don’t need to enroll or sign up to get the 2% cash back. (Chase Freedom, we’re looking in your direction).
How Citi Double Cash Works
It’s pretty simple, really. You make a purchase and earn 1% cash back. Then when you pay off the purchase, you get the other 1% cash back.
Your rewards are broken down as “cash back on purchases” and “cash back on payments”.
Once you earn $25 in cash back, it can be redeemed. So after you spend and pay off $1,250, you’ll be able to cash out.
Just note that your cash back will expire if you haven’t earned any cash back from purchases or payments for 12 months.
You don’t need to pay off your balance in full each month to get the entire 2% cash back. You can pay off purchases over time and earn the extra 1% as your balance dwindles.
The caveat is that you must make at least the minimum payment each month to get the additional 1%. But that kind of goes without saying.
However, Citi does provide a “late fee pass” on your first missed payment, not that it’s a good idea, seeing that you’d lose out on half of your cash back.
Why It’s Better Than Other 2% Cash Back Options
Another plus is that the cash back on Citi Double Cash can be redeemed via check, statement credit, or gift card.
This differs from other 2% cash back credit cards that often can only be used for certain things, like travel in the case of Barclaycard Arrival Plus and Capital One Venture Rewards, or investment rewards in the case of the Fidelity Amex.
I actually have the Fidelity Amex card and have no problem with them depositing cash into my retirement account at a rate of 2% for every purchase. But not everyone is into retirement savings so this card is a nice alternative.
Additionally, one doesn’t have to worry about whether American Express is accepted because Citi cards are backed by Visa/MasterCard.
Citi Double Cash also comes with 0% APR for the first 15 months on both purchases and balance transfers with a 3% balance transfer fee. Just note that the balance transfers don’t earn the cash back with Citi.
All in all this is a pretty solid credit card if you want to earn more cash back when your rotating cards are only earning 1%. And if you buy gift cards through portals, your cash back can be even greater.
In summary, I’ll stick with my Fidelity Amex for now, but if Citi Double Cash throws in a sign-up bonus, I’ll be all over this, especially with the lack of an annual fee.