Credit Cards / Rewards

Best Credit Cards for Passive Income — Will New ‘Unbiased’ Government Tool Help You Find One?

April 4, 2023

5 min Read

Written by David Nadelle

Edited by Nicholas Morine

PeopleImages / Getty Images/iStockphoto

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The general consensus is that over 80% of Americans have credit cards. According to Forbes, of households earning more than $100,000 per year, 98% contain at least one member who has a credit card. Credit cards make up 30% of the “amount owed” category on your FICO credit score, per CNBC.

A new “unbiased” government tool may make it easier to shop for the credit card that best suits your needs, including which cards on the market are the best for earning passive income.

According to the Consumer Financial Protection Bureau’s (CFPB) director Rohit Chopra, improving comparison shopping benefits everyone, giving smaller banks the chance to reach more consumers and consumers the credit standards needed to qualify for certain cards — as well as vital product information.

“Given the rise in interest rates, the CFPB has modernized how it collects credit card data to spur competition and help families use products with lower rates and fees,” said Chopra. “These improvements will also give smaller relationship banks that offer better terms and better service another way to compete against the dominant credit card companies.”

The CFPB is currently gathering details from issuers, who have a deadline to provide information by April 20. Hopefully, when eventually released to the public, the CFPB-supported model will provide effective rate and fee impact information. According to The New York Times, consumer advocate groups see the tool as “promising but… specifics remain to be seen.”

Earning money without any active involvement can be done via credit by using cards that offer points, miles and, especially, cash back. Because the banking world is ultra competitive — and with so many consumers shopping for cash-back rewards — you can be choosy and comparison shop for the best deals.

While you might find very good welcome bonuses and cash back rates on certain purchases at small banks, the following are six of the best big bank credit cards for passive income. All are offered to consumers with good to excellent credit scores and all have $0 annual fees (at least for the first year).

Chase Freedom Unlimited

Intro Bonus: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) worth up to $300 cash back.
Purchase APR: 0% APR is available for the first 15 months for balance transfers or card purchases, then 19.49% — 28.24% variable.
Annual Fee: 0%.
Cash Back: Earn 5% on Chase travel purchased through Chase Ultimate Rewards, 3% on dining and drug store purchases and 1.5% on all other purchases.

Capital One SavorOne Cash Rewards

Intro Bonus: Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening.
Purchase APR: 0% intro on purchases for 15 months, then 19.74% — 29.74% variable.
Annual Fee: $0.
Cash Back: Earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart and Target), plus 1% on all other purchases. Earn 5% cash back on hotels and rental cars booked through Capital One Travel and 8% cash back on Capital One Entertainment purchases.

Wells Fargo Active Cash

Intro Bonus: Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months.
Purchase APR: 0% intro APR for 15 months from account opening, then 19.74%, 24.74%, or 29.74% variable APR.
Annual Fee: $0.
Cash Back: Earn unlimited 2% cash rewards on purchases.

Blue Cash Preferred Card from American Express

Intro Bonus: Earn $250 back after you spend $3,000 in purchases on your new card within the first 6 months.
Purchase APR: 0% intro APR for 12 months, then 18.74% — 29.74% variable.
Annual Fee: $0 intro annual fee for the first year, then $95.
Cash Back: Earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%); earn 6% cash back on select U.S. streaming subscriptions; earn 3% cash back on transit (e.g., taxis/rideshare, parking, tolls, trains, buses and more) and at U.S. gas stations; earn 1% cash back on other eligible purchases. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.

Discover it Cash Back

Intro Bonus: Unlimited Cashback Match. Discover will automatically match all the cash back you’ve earned at the end of your first year.
Purchase APR: 0% intro APR for 15 months on purchases. Then 16.74% — 27.74% variable.
Annual Fee: $0.
Cash Back: Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations — up to the quarterly maximum.

Chase Freedom Flex

Intro Bonus: Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
Purchase APR: 0% intro APR for 15 months from account opening on purchases and balance transfers. A variable APR of 19.49% — 28.24% applies thereafter.
Annual Fee: $0.
Cash Back: Earn 5% cash back in categories that rotate quarterly on up to $1,500 when enrolled, 5% on travel purchased through Chase Ultimate Rewards, 3% on dining and drug store purchases as well as 1% on all other purchases.

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