If you spend a lot of money dining out, the right cash-back credit card could save you hundreds of dollars per year.
To determine which card can earn you the most cash back at restaurants, CNBC Make It analyzed the most popular cash back offers in the U.S. Using a sample budget based on spending data from the Bureau of Labor Statistics, we estimated how much money each card would save you after five years, adding up bonuses and cash back rewards while deducting annual fees. We also considered other characteristics that could set a card apart, such as interest rates and introductory offers.
The Capital One Savor card promises 3 percent cash back on spending at restaurants year-round, as well as 2 percent on groceries and 1 percent on everything else. It requires no annual fee and no foreign transaction fee when you use it overseas. Plus, if you spend $500 in the first three months after getting it, Capital One tacks on a $150 bonus.
While the Savor is the best choice for those looking to maximize cash back at restaurants and on groceries, according to our analysis, frequent travelers may also want to consider travel credit cards, which often reward dining out as well as hotels and transportation.
The Chase Sapphire Reserve, for instance, promises 3 points for every dollar you spend at restaurants. If you redeemed those points for cash, you'd get the same 3 percent return, but if you redeemed them for travel expenses, they could be worth even more. The Reserve, however, does have a $450 annual fee and requires users to travel a fair amount to offset that charge. The Uber Visa Card, meanwhile, another popular choice among travelers, currently offers an impressive 4 percent return at restaurants.
Capital One Savor at a glance:
To determine which cash back card offers the best return at restaurants, CNBC Make It vetted highly rated cash back cards based on their cash back offers, introductory and eventual APRs, annual fees, bonuses, recommended credit scores, late fees, balance transfer fees, foreign transaction fees, redemption options and customer reviews.
We then estimated how much money each card would save the typical American after one year, two years and five years. Our assessment heavily weighs the five-year return to avoid a large sign-up bonus skewing the results. We also assume that most people want a great card that they can stick with for years, especially since bouncing from card to card can be bad for your credit score.
To estimate the return, we used expenditure data from the Bureau of Labor Statistics to make a sample budget broken down by average annual spending in categories like gas ($1,909), groceries ($4,049), dining out ($3,154) and general purchases ($10,529). The general purchase category includes shopping, entertainment, public transit and vehicle expenses other than gas.
The estimate incorporates bonuses and assumes you have a high credit limit and that you use your card for 90 percent of the purchases you make in these categories, accounting for instances where you have to use cash or shop somewhere that doesn't accept your card.
Once we had our estimates, we then weighed cash returns against other factors including interest rates and fees, cash-back categories, practicality, bonuses and other perks.
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