WASHINGTON—In the battle of credit card rewards, get ready to pay up. According to a new report in U.S.News & World Report, 1.5%, not 1%, is becoming the new normal in cash-back programs.
The report shared that cardholders can get no-annual-fee cards handing out 1.5% cash back on every purchase from many big issuers — including Capital One, Barclaycard, Chase, Wells Fargo and U.S. Bank.
The report also highlighted how even those deals are being bested by Citi, which offers 1% on every dollar spent and another 1% on every dollar paid off.
"For a long time, 1% has been seen as the floor," Sean McQuay, NerdWallet's credit card expert, told U.S.News.
"Everyone jumps on the bandwagon," Tiffani Montez, a senior analyst for Aite Group told U.S.News & World Report. "But then, as things progress again, everything starts to flatten, and there becomes this new normal for what's acceptable for cash back. Then (issuers) go look for a new source of differentiation, such as credit monitoring and frictionless rewards redemption."