Loading
Tap on the profile icon to edit
your financial details.
We maintain strict editorial integrity in our writing and assessments. This post contains links from our advertisers, and we may receive compensation when you click these links. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been provided, reviewed or otherwise endorsed by our advertising partners. Please visit our Advertiser Disclosure for more information and to view our partners.

Best Cash Back Credit Cards

Your Details Done
by Sam Lipscomb | Updated Sep. 15, 2020

Overview of the Best Cash Back Credit Cards

Cash back credit cards are perfect for saving you money on everyday spending and fueling memorable experiences with a vast array of redemption opportunities. There are often many considerations to be made when looking for the right cash back credit card, including which categories earn you the most cash back, redemption options, and annual fees. Using a rigorous approach to calculate how much your everyday spending can earn you, we identified which credit cards would get you the best bang for the buck. In picking our winners, we estimated how much a typical cash back credit card user can expect to get in rewards each year. To make the comparison experience more transparent, we show the total cash back you can expect to get from each of the cards per year. See More



Best Flat-Rate Cash Back Card

More Details

  • Receive 2% cash back on all purchases. This breaks down to earning 1% when you buy and another 1% as you pay for those purchases
  • To be eligible to earn cash back you must pay the minimum due on your account, without paying late
  • 0% Intro APR for the first 18 months on Balance Transfers. Afterward, the ongoing variable APR will be 13.99% - 23.99% based on your creditworthiness
  • If you choose to transfer a balance, a fee of either $5 or 3% of each transfer, whichever is greater will apply
  • Certain transactions do not earn cash back i.e., balance transfers, cash advances, items returned for credit, lottery tickets, and more
  • Standard APR when taking part in the Citi Flex Plan is a variable 13.99% - 23.99% depending on creditworthiness

Annual Fee

$0

Purchase Intro APR

N/A

Balance Transfer Intro APR

0% for 18 Months (for balance transfers completed within first 4 months)

Regular APR

13.99% - 23.99% Variable

Details

The Citi Double Cash Card pays 2% cash back on all purchases. You’ll earn 1% back as you spend and another 1% back when you pay your bill. This card does not come with a sign-up bonus, but it also doesn’t have an annual fee. There is a 3% foreign transaction fee.

Why We Like It

It’s rare to find a personal credit card on the market that pays you 2% cash back with no annual fee. With the Citi Double Cash Card, it’s extra important to pay your bill in full and on time, as you only get the full 2% cash back advertised upon paying your statement. As seen in our honorable mentions below, there are plenty of cards that pay 1.5% with no annual fee, and even a no-annual fee business card that pays 2% on your first $50,000 in purchases every year. However, this personal card’s 2% cash back is what makes it our top pick for cash back credit cards.

Compare Other Cash Back Offers

Best Credit Card for Cash Back in Rotating Categories

More Details

  • Earn a one-time bonus of $200 when you spend $500 on purchases in your first 3 months with your new card
  • Earn 5% cash back in selected categories that change each quarter, up to $1,500 in combined purchases. Categories must be opted into each quarter to earn the 5%
  • Earn 5% cash back on your grocery purchases on up to $12,000 spent in the first year. (This does not include Walmart or Target purchases)
  • Earn 5% cash back on travel when you purchase through Chase Ultimate Rewards and 3% cash back on drugstore purchases and on dining including takeout and eligible delivery services
  • Earn an unlimited 1% cash back on everything else
  • Pay no annual fee
  • Receive 0% APR for the first 15 months on purchases, then an ongoing variable APR of 14.99% - 23.74%
  • No minimum amount required to redeem your cash back, redeem anytime. Your cash back rewards will not expire as long as your account is open and in good standing

Annual Fee

$0

Purchase Intro APR

0% for 15 months

Balance Transfer Intro APR

N/A

Regular APR

14.99% - 23.74% Variable

Details

The Chase Freedom Flex earns 1% cash back on all purchases, but also earns 5% cash back on up to $1,500 in specific category purchases combined that change for each quarter of the year. There is also 5% cash back at grocery stores on up to $12,000 in the first year. If you purchase travel through Chase, you can also get 5%. Dining at restaurants and purchases at drugstores will earn you 3% cash back. This card doesn’t have an annual fee but will incur a 3% foreign transaction fee. You’ll also earn $200 in bonus cash back after spending $500 on purchases in the first 3 months.

Why We Like It

While 1% cash back is nothing to write home about, 5% cash back on rotating quarterly categories is a higher rate than even some of the heaviest hitting rewards cards. The 5% bonus categories can be easy to take advantage of. While Chase only releases the calendar once a quarter, categories typically include gas stations, streaming services, restaurants, or even purchases made with Apple Pay or Chase Pay. What’s more, this card doesn’t have an annual fee, so there’s no reason not to have it in your wallet. It’s one of only a few cards that offers bonuses on rotating categories.

Compare Other Rewards Offers

Best Cash Back Card for Choosing Your Own Bonus Categories

More Details

  • In your first year, earn up to $550 cash back
  • If you spend $500 in eligible net purchases in the first 90 days from account opening, you will earn $150
  • Earn 5% cash back on the first $2,000 in combined eligible net purchases ($100 each quarter) in 2 categories you choose. That means you can earn up to $400 in cash back!
  • Earn 2% cash back in your choice of 1 everyday category, like grocery stores or gas stations. Category options are subject to change quarterly.
  • Earn 1% cash back on all other eligible net purchases, automatically
  • There is no limit to the amount of cash back you can earn
  • 0% Intro APR balance transfers for the first 12 billing cycles. Afterwards, a variable APR currently 13.99% - 23.99% depending on creditworthiness
  • There is no annual fee

Annual Fee

$0

Purchase Intro APR

N/A

Balance Transfer Intro APR

0% for 12 billing cycles

Regular APR

13.99% - 23.99% Variable

Details

With the U.S. Bank Cash+ Visa Signature Card you’ll earn a $150 cash back bonus after spending $500 in qualified purchases in the first 90 days. Every quarter, you’ll be able to choose two categories in which you’ll earn 5% cash back on up to $2,000 in eligible net purchases between the two categories. You’ll also be able to choose one category for which you’ll earn unlimited 2% cash back and you’ll earn unlimited 1% cash back on all other eligible purchases. This card has no annual fee, but a 2-3% foreign transaction fee.

Why We Like It

Much like the Chase Freedom Flex, any card that offers 5% cash back on any category is worth considering. You have a large selection of 5% categories to choose from, typically including movies, utilities or specific types of stores. While the 2% category has fewer options to choose from they tend to be broader, including such options as gas stations or restaurants. If you spend in the right places, this card has the potential to be extremely lucrative from a cash back perspective. Also like the Chase Freedom, it has no annual fee, so there aren’t many drawbacks to keeping this card around.

Compare Other Competitive Offers

Best Cash Back Credit Card for Dining and Travel

More Details

  • Earn a one-time bonus of 20,000 points when you spend $1,000 in eligible purchases in the first 3 months of card membership
  • No annual fee and no foreign currency conversion fees
  • Earn 3 points per dollar when you dine out or order in
  • Earn 3 points per dollar on travel purchases including car rentals, cruise lines, flights, hotels, homestays and more
  • Earn 3 points per dollar at gas stations, transit, and rideshare purchases
  • Earn 3 points per dollar on qualifying streaming services
  • Earn 1 point per dollar on all other qualifying purchases
  • Select "Learn More" to read more about the features of this card including terms and conditions

Annual Fee

$0

Purchase Intro APR

0% for 12 Months

Balance Transfer Intro APR

0% for 12 months (on qualifying balance transfers)

Regular APR

13.99% - 25.99% Variable

Details

The Wells Fargo Propel American Express card earns 3x points on travel (flights, hotels, homestays, rideshares, transit and car rentals), dining, gas stations and popular streaming services. You’ll also earn 1x points on all other purchases with the card as well as a 20,000 point signup bonus after spending $1,000 on purchases within the first 3 months. This card has no annual fee or foreign transaction fee.

Why We Like It

The Wells Fargo Propel American Express card has great return on some very popular bonus categories. If you’re the type of person who spends a significant chunk of money on travel and dining, then this card could be a good fit for you. You’ll earn points that can be redeemed for cash back at a value of 1 cent per point. The card has no annual fee, giving it a leg up on other popular travel rewards cards, some of which charge upwards of $400 in annual fees. It also doesn’t charge foreign transaction fees, and it comes with certain built-in travel and purchase protections that could come in handy.

Compare Similar Offers

Best Cash Back Credit Card for Dining and Entertainment

More Details

  • Receive a one-time early spend bonus of $300 after making $3,000 worth of purchases in your first 3 months from account opening
  • Earn an unlimited 4% cash back on dining and entertainment purchases, 2% at grocery stores, and 1% on everything else. If you purchase tickets at Vivid Seats now through May 2020, you will earn 8% cash back.
  • No need to opt into categories every month, rewards are automatic. There is no limit to the cash back you can earn and cash back won't expire as long as your account is in good standing
  • Pay no foreign transaction fees when traveling abroad
  • Cardholders receive access to next level culinary experiences, some of the biggest concerts, and big-time sporting events
  • Introductory annual fee of $0 for your first year, after that pay $95

Annual Fee

$0 for the first year, $95 after that

Purchase Intro APR

N/A

Balance Transfer Intro APR

N/A

Regular APR

15.99% - 24.99% Variable

Details

The Capital One® Savor® Cash Rewards Credit Card earns 4% cash back on dining and entertainment purchases, 2% cash back at grocery stores and 1% cash back on all other purchases. You can earn a $300 early spend bonus when you get the card by spending $3,000 on purchases within the first 3 months of account opening. The annual fee of $95 is waived the first year and there are no foreign transaction fees.

Why We Like It

Despite carrying a $95 annual fee, the Capital One® Savor® Cash Rewards Credit Card can still be a great option for anyone who spends a significant amount on dining and entertainment. The early spend bonus is more than enough to cover three years of the card’s annual fee. It’s rare to find a card that gives 4% cash back on dining purchases, and those that do usually carry much higher annual fees. Still, it’s good to make sure that you spend enough to get adequate value out of this card before applying.

Compare Other Capital One Offers

Best Cash Back Credit Card for Students

More Details

  • Earn 1% cash back on every purchase - plus, you can increase that to 1.25% just by paying on time for the month
  • No foreign transaction fees when you travel abroad and there is no annual fee
  • With responsible card use the Journey® Student Rewards card can help build your credit
  • Receive assistance from Eno®, your Capital One® assistant, to manage your account and to help keep you safer online
  • Have the freedom to pick the monthly due date that works best for your payment schedule
  • Capital One® will automatically review your account and consider you for a higher credit line in as little as six months
  • Zero fraud liability coverage if your card is ever lost or stolen
  • Get access to CreditWise® and monitor your credit score and credit report for free

Annual Fee

$0

Purchase Intro APR

N/A

Balance Transfer Intro APR

N/A

Regular APR

26.99% Variable

Details

The Journey® Student Rewards from Capital One® is a simple beginner's cash back card. You’ll earn 1% cash back on all purchases with the opportunity to earn an additional 0.25% cash back when you pay your statement on time. This card is easy to be approved for with limited income or limited credit history. Plus, you won’t pay any annual fee or foreign transaction fees.

Why We Like It

The Journey® Student Rewards from Capital One® is a great way for younger or new-to-credit users to familiarize themselves with using a credit card and redeeming rewards. The bonus cash back incentivizes users to pay their bills on time, and there are no annual or foreign transaction fees to eat into your cash back. Responsible users can gain access to a higher credit limit in as little as six months as Capital One® will automatically review your account. This card is easily accessible for those who have never used credit cards before, making it a great student option and one that could be well worth keeping in your wallet if you’re unable to qualify for other cash back cards.

Compare Other Student Offers

Best Cash Back Credit Card for Businesses

More Details

  • Earn a one-time early spend bonus of $500 when you spend $4,500 on purchases within the first 3 months.
  • Earn unlimited 2% cash back - no matter the purchase
  • Introductory annual fee of $0 for your first year, after that pay $95
  • Add card for your employees for free and earn cash back from their purchases
  • Zero fraud liability coverage if your card is ever lost or stolen
  • Redeem cash back at any amount, plus cash back won't expire as long as your account is in good standing
  • There are no foreign transaction fees when you travel abroad

Annual Fee

$0 for the first year, $95 after that

Purchase Intro APR

N/A

Balance Transfer Intro APR

N/A

Regular APR

18.49% Variable

Details

The Capital One® Spark® Cash for Business earns unlimited 2% on all purchases. You can also earn a $500 early spend bonus after spending $4,500 in the first 3 months of account opening. The card has a $95 annual fee that only kicks in after a year of card membership. You also won’t pay any foreign transaction fees when you use this card abroad.

Why We Like It

The Capital One® Spark® Cash for Business stands out first and foremost because of its stellar earnings rate of 2% cash back on all purchases. While some other business cards offer 2% cash back, such cash back rates are often capped at a certain amount every year. The Spark Cash card offers unlimited cash back, so you don’t have to keep track of any limits. While there is a $95 annual fee, the early spend bonus of $500 is more than enough to cover five years’ worth of annual fees. The Spark Cash card is a viable option for any business looking for a simple flat-rate cash back card with great earnings potential.

Compare Other Business Offers

Cash Back Credit Card with the Best Signup Bonus

More Details

  • Earn a $500 cash back early spend bonus after spending just $3,000 in purchases in the first three months after account opening
  • Earn unlimited 1.5% cash back on all purchases
  • 0% intro APR on purchases for the first 12 months, after that a variable APR of 13.24% – 29.24%
  • Receive employee cards at no extra cost
  • No annual fee for maintaining your account
  • Purchase protection for 120 days against damage or theft up to $10,000 per claim and $50,000 per account

Annual Fee

$0

Purchase Intro APR

0% for 12 months

Balance Transfer Intro APR

N/A

Regular APR

13.24% - 19.24% Variable

Details

The Ink Business Unlimited Credit Card has one of the highest cash back early spend bonuses on the market, earning $500 back after spending just $3,000 in purchases in the first 3 months after account opening. The card also earns unlimited 1.5% cash back on all purchases. On top of all that, the card has no annual fee. However, you’ll pay a 3% foreign transaction fee if you use the card abroad.

Why We Like It

The Ink Business Unlimited Credit Card is a solid cash-back credit card for business owners. With 1.5% cash back on all purchases and a huge sign-up bonus, it’s not hard to get a ton of value out of this card. The card comes with other perks as well, such as fraud and purchase protections. Plus, while you can redeem your rewards directly for cash at any time, you can also use them to book travel through the Chase travel portal.

Honorable Mentions

Capital One® Quicksilver® Cash Rewards Credit Card

Quick Look

The Capital One® Quicksilver® Cash Rewards Credit Card earns unlimited 1.5% cash back on every purchase. The cash back calculates instantly, and you don’t have to wait until your statement closes to redeem. You can also earn a $150 early spend bonus after spending $500 within the first 3 months of card membership. This card has no annual fee and no foreign transaction fee, making it a great option to keep in your wallet.

The Capital One® Quicksilver® Cash Rewards Credit Card also goes nicely with any card with specific cash back bonus categories. Since most of those cards only earn 1% cash back on non-bonus spending, the Capital One® Quicksilver® Cash Rewards Credit Card can help pick up the slack and earn you 1.5% cash back on all your non-bonus spending that might otherwise go on other cards.

Compare Other No Annual Fee Offers

SA First Year Rewards
$420
Pros
  • Unlimited 1.5% cash back on all purchases
  • No annual fee or foreign transaction fees
  • $150 early spend bonus after spending $500 within the first 3 months of cardmembership
Cons
  • No bonus categories
Qualifying Credit Score

More Details

  • Earn a one-time early spend bonus of $150 when you spend $500 on purchases within the first 3 months of having an account
  • Earn unlimited 1.5% cash back - no matter the purchase
  • Categories don't change or rotate, rewards are automatic. There is no limit to the cash back you can earn and cash back won't expire as long as your account is in good standing
  • Low 0% intro APR on purchases for the first 15 months; receive 15.49% - 25.49% variable APR after that depending on creditworthiness
  • There is no annual fee and there are no foreign transaction fees when traveling abroad

Annual Fee

$0

Purchase Intro APR

0% for 15 Months

Balance Transfer Intro APR

N/A

Regular APR

15.49% - 25.49% Variable

Quick Look

The Capital One® Quicksilver® Cash Rewards Credit Card earns unlimited 1.5% cash back on every purchase. The cash back calculates instantly, and you don’t have to wait until your statement closes to redeem. You can also earn a $150 early spend bonus after spending $500 within the first 3 months of card membership. This card has no annual fee and no foreign transaction fee, making it a great option to keep in your wallet.

The Capital One® Quicksilver® Cash Rewards Credit Card also goes nicely with any card with specific cash back bonus categories. Since most of those cards only earn 1% cash back on non-bonus spending, the Capital One® Quicksilver® Cash Rewards Credit Card can help pick up the slack and earn you 1.5% cash back on all your non-bonus spending that might otherwise go on other cards.

Compare Other No Annual Fee Offers

Chase Freedom Unlimited

Quick Look

The Chase Freedom Unlimited is a simple card to use. You'll earn 5% at grocery stores up to $12,000 in the first year, and 5% on travel purchases made through Chase. Purchases at the drugstore or at a restaurant will earn you 3% cash back with an unlimited 1.5% cash back on all other purchases. Target and Walmart purchases are not included in the 5% grocery cash back category. These rewards come in the form of points and can be redeemed for a variety of uses, from cash back to travel. This card has no annual fee, so it’s worth carrying in your wallet. However, there is a 3% foreign transaction fee.

The Chase Freedom Unlimited is a great card for anyone who wants to earn significant cash back without keeping track of bonus categories. It also combines well with a card like the Chase Freedom, if you’re someone who can keep track of using two cards at once. By using the Chase Freedom for 5% cash back bonus spending and the Chase Freedom Unlimited for all other spending, you’ll make sure you’re maximizing your cash back earnings.

Compare Other Chase Offers

SA First Year Rewards
$555
Pros
  • $200 cash bonus after spending $500 on purchases in the first 3 months
  • Unlimited 1.5% cash back on all purchases
  • Earn 5% cash back on grocery store purchases on up to $12,000 in the first year, 5% on travel purchases with Chase, 3% on drugstore and restaurant purchases
  • No annual fee
Cons
  • 3% foreign transaction fee
  • 5% cash back at grocery stores category does not include Target or Walmart purchases
Qualifying Credit Score

More Details

  • Earn a one-time cash bonus of $200 when you spend $500 on purchases in your first 3 months with your new card
  • Earn 5% cash back on your grocery purchases on up to $12,000 spent in the first year. (This does not include Walmart or Target purchases)
  • Earn 5% cash back on travel when you purchase through Chase Ultimate Rewards and 3% cash back on drugstore purchases and on dining including takeout and eligible delivery services
  • Earn an unlimited 1.5% cash back on everything else
  • Pay no annual fee
  • Receive 0% APR for the first 15 months on purchases, then an ongoing variable APR of 14.99% - 23.74%
  • No minimum amount required to redeem your cash back, redeem anytime. Your cash back rewards will not expire as long as your account is open and in good standing

Annual Fee

$0

Purchase Intro APR

0% for 15 months

Balance Transfer Intro APR

N/A

Regular APR

14.99% - 23.74% Variable

Quick Look

The Chase Freedom Unlimited is a simple card to use. You'll earn 5% at grocery stores up to $12,000 in the first year, and 5% on travel purchases made through Chase. Purchases at the drugstore or at a restaurant will earn you 3% cash back with an unlimited 1.5% cash back on all other purchases. Target and Walmart purchases are not included in the 5% grocery cash back category. These rewards come in the form of points and can be redeemed for a variety of uses, from cash back to travel. This card has no annual fee, so it’s worth carrying in your wallet. However, there is a 3% foreign transaction fee.

The Chase Freedom Unlimited is a great card for anyone who wants to earn significant cash back without keeping track of bonus categories. It also combines well with a card like the Chase Freedom, if you’re someone who can keep track of using two cards at once. By using the Chase Freedom for 5% cash back bonus spending and the Chase Freedom Unlimited for all other spending, you’ll make sure you’re maximizing your cash back earnings.

Compare Other Chase Offers

American Express Blue Business Cash Card

Quick Look

The American Express Blue Business Cash Card is a great option for business owners who don’t want to pay an annual fee. You’ll earn 2% cash back on up to $50,000 in purchases every calendar year. After hitting that $50,000 mark, you’ll earn 1% on all subsequent purchases. There isn’t a welcome bonus for the Blue Business Cash Card, but it can be a solid option to keep in your wallet given the lack of an annual fee. However, be wary of using this card abroad as there is a 2.7% foreign transaction fee.

Like our other honorable mentions, this card is also great to combine with cards that have bonus categories. Since you’ll earn 2% cash back on up to $50,000 in purchases every year, it’s smart to use this card for all your non-bonus spending. Once you hit the $50,000 mark and start earning just 1% cash back on all purchases, it may be a good idea to switch to a different card with a higher earnings rate.

Compare Other American Express Offers

SA First Year Rewards
$730
Pros
  • 2% cash back on $50,000 in purchases every calendar year, 1% on all purchases thereafter
  • Earn up to $300 in statement credits with purchases at DocuSign, FedEx, and Dell Technologies in your first 3 months of card membership – Terms Apply
  • No annual fee
Cons
  • 2.7% foreign transaction fee
  • 2% cash back rate only applies to the first $50,000 in purchases each calendar year
  • No welcome bonus
Qualifying Credit Score

More Details

  • If you make an eligible purchase at Dell Technologies, DocuSign, and FedEx you can earn up to $100 in statement credits at each of the merchants for a total of up to $300 in your first 3 months with your new card.
  • Earn 2% cash back on up to $50,000 in eligible purchases each year, unlimited 1% cash back after that. Cash back is credited to your statement, and is easy to redeem. Cash back doesn’t expire as long as your account is open and in good standing.
  • Flexibility to spend above your credit limit Credit limit adjusts with your payment history, credit record, use of the card, financial resources known to us, and other factors. Your credit limit is not unlimited.
  • 0% introductory APR on purchases for the first 12 months. After that, you will receive a variable APR of 13.24% - 19.24% based on your creditworthiness and other factors.
  • There is a 2.7% foreign transaction fee on each transaction made abroad.
  • There is no annual fee to keep and maintain your account.
  • Terms Apply.

Annual Fee

$0

Purchase Intro APR

0% for 12 months

Balance Transfer Intro APR

N/A

Regular APR

13.24% - 19.24% Variable

Quick Look

The American Express Blue Business Cash Card is a great option for business owners who don’t want to pay an annual fee. You’ll earn 2% cash back on up to $50,000 in purchases every calendar year. After hitting that $50,000 mark, you’ll earn 1% on all subsequent purchases. There isn’t a welcome bonus for the Blue Business Cash Card, but it can be a solid option to keep in your wallet given the lack of an annual fee. However, be wary of using this card abroad as there is a 2.7% foreign transaction fee.

Like our other honorable mentions, this card is also great to combine with cards that have bonus categories. Since you’ll earn 2% cash back on up to $50,000 in purchases every year, it’s smart to use this card for all your non-bonus spending. Once you hit the $50,000 mark and start earning just 1% cash back on all purchases, it may be a good idea to switch to a different card with a higher earnings rate.

Compare Other American Express Offers

Methodology

SmartAsset has developed a quantitative and independent system for evaluating the relative value of a credit card offer versus other offers in the marketplace. Our system evaluates cards based exclusively on their features, such as their rewards earning rate (if applicable), fees, perks, and rewards program redemption options. The annual rewards values on this page are calculated using annual spending assumptions in various categories such as, but not limited to, gas, restaurants, airfare, and US supermarkets. These spending assumptions are built on research that SmartAsset has conducted on existing cash back credit cardholders. Our promise with our credit card recommendations is that we will always strive to have the most comprehensive, accurate, and objective method of evaluating credit card offers. Any recommendations are solely determined by the result of this research and model, and is never influenced by any fees, commissions, or other forms of compensation that SmartAsset may receive from credit card issuers for leads generated on our website.

Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the issuer.

Advertiser Disclosure: The card offers that appear on this site are from companies from which SmartAsset.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). SmartAsset.com does not include all card companies or all card offers available in the marketplace.


Cash Back Credit Cards: Everything You Need to Know


The Basics


Rewards cards offer consumers incentives for using their credit cards to make purchases. A credit card company may reward cardholders by offering them cash back on their purchases. That means you can get paid for just using your credit card.

With a cash back credit card, a small percentage of what you spend is returned to you in the form of cash, points or statement credits. The more you use your cash-back credit card, the more rewards you’ll earn.

Looking for the best cash back credit card for your lifestyle? Read on to learn about the kinds of cash back credit cards that are available to consumers and what to consider before applying for a card.

Redeeming Cash Back Credit Card Rewards

Rewards you earn with a cash back credit card may be redeemed in multiple ways. Typically, it’s on the user to decide. Some cards let you either apply your cash back as a statement credit or simply deposit the amount to your bank account as cash. Both serve essentially the same purpose.

Some cash back credit cards provide cash back that can only be exchanged for statement credits or statement credits to offset specific expenses, like travel. These credits will appear on your credit card statement. You can use them to pay off outstanding balances in your credit card account.

The Benefits of Cash Back Credit Cards

There are many reasons why you should consider applying for a cash back credit card. When it comes to redeeming rewards, cash back cards may offer more flexibility than credit cards that provide airline miles or points. You could use the cash rewards you earn to knock out debt and meet other financial goals. You could even use your cash rewards to pay for travel expenses that you might not be able to cover using the rewards from a travel credit card.

Another great thing about cash back credit cards is the fact that there are usually no surprises. You’re unlikely to have to worry about your rewards losing value. In most cases, they won’t expire as long as your account remains active and is in good standing, though this is also true for most points or miles earning cards.

If you qualify for one of the best cash back credit cards, you could earn as much as 5% or 6% back for purchases within certain categories. You may earn as much as 20% cash back by purchasing products sold by certain stores (especially retailers in online bonus malls).

Not all cash back credit cards come with a sign-up bonus, but lots do. And some cards have a bonus cash back rewards rate that they apply when your account is active for a certain number of consecutive months. Other cash back credit cards offer sign up bonuses when you spend a certain amount of money within three months of opening an account.

How a Cash Back Credit Card Could Save You Money


Saving money can be easy when you have a cash back credit card. If you can redeem the rewards you earn for a statement credit, you can use it to pay off your credit card balance. Then the funds that you would normally use to make credit card payments could cover other bills (or go into a savings account).

Barely managed to sock away any money for retirement? You could use a cash back credit card to boost your savings. Every so often (or whenever your credit card company lets you cash out), you could transfer the cash you’ve earned to a traditional or Roth individual retirement account (IRA). Or you could stick your credit card rewards into an investment account with a decent return rate.

You could also use your cash rewards to lower your tax bill. If you’re itemizing your deductions and you need an extra tax break, you can donate your rewards to a qualifying charity. With many rewards programs, you can make a quick donation online. Your rewards will be deductible in the tax year that you make a contribution. So a donation you make in the middle of December will count toward your tax bill for that year (even if you don’t pay your credit card bill until January of the following tax year). Don’t forget to find out what’s considered a charitable organization in the eyes of the IRS. Contributions made to private foundations and foreign groups, for example, cannot be deducted when filing income taxes.

Finally, cash back could save you money on the purchases you make daily. As your rewards add up, you could use the cash you earn to pay for your morning coffee, the snacks for your kids’ lunches or your weekend getaways.

The Drawbacks of Cash Back Credit Cards

With a cash-back credit card, you can get your finances on track and make room in your budget for splurging. But some of these rewards cards come with annual fees.

Many cash back credit cards have higher interest rates than traditional credit cards. If you carry a balance every month or make late payments every once in a while, the fees and interest payments you have to pay are almost certainly going to surpass the number of rewards you earn. Unless you plan on paying your bill in full and on time every month, you should not get a cash back or any other rewards credit card.

Some credit card issuers place a cap on the amount of cash back you can earn. For example, you may only be able to earn cash back on top of the first $1,500 you spend within a quarter in a certain category. Or your credit card company may say that you can’t earn any more cash back once you spend a certain amount within a year. If this is true, your earning rate is likely to drop to 1x points or 1%.

Cash back rewards rates usually aren’t that high. In most cases, you’ll only be able to earn around 1% to 2% cash back. This means that if you’re allowed to earn 1% cash back on the first $5,000 you spend in a year, you’ll only earn $50 in cash back rewards. Still, that $50 is $50 more than you’d receive using a debit card or cash.

Another thing to keep in mind is that if you spend money just to earn cash back, you could land in hot water. In your attempt to earn as many rewards as possible, you could overspend and end up with too much debt, rendering your credit card rewards essentially useless.

How a Cash-Back Credit Card Could Affect Your Credit Score

Applying for a cash-back credit card can affect your credit score in several different ways. A credit card issuer will have to check your credit report before approving you for new credit. That move is known as a hard inquiry. It will likely lower your score by a small degree. But your credit shouldn’t take a long time to recover.

According to the FICO scoring model - which is widely used among lenders - 10% of your credit score depends on recent credit inquiries and the number of new credit accounts you have (among other things). Adding a single new credit account to the mix should barely affect your credit score. Submitting applications for a series of credit card accounts within a few weeks or months, however, could have an adverse effect on your credit. Even if your credit score is on the higher end of the spectrum, a credit card issuer may reject your application if you have too many recent inquiries. FICO credit scores depend on the number of hard inquiries you’ve had within the past 12 months.

Having a new credit account will also reduce the average age of all of your credit accounts. The length of your credit history accounts for 15% of your FICO credit score. The upside to having new credit is that it’ll increase your total credit line and could improve your credit utilization ratio (or the amount of credit you’ve used in relation to the individual credit limit on each card and your total credit limit across all of your credit cards).

If you manage to qualify for a cash back credit card, your own actions are mainly what will determine what happens to your credit score. If your statements close every month with high balances and you constantly make late credit card payments, your credit score could take a hit. But meeting all of your credit card deadlines and keeping your credit utilization ratio below 30% can raise your credit score. Your credit utilization ratio and the amount of debt you’re carrying account for 30% of your FICO score. Under the same scoring model, 35% of your credit score depends on your payment history.

Avoiding the temptation to spend more money than you should can be tricky when you have a cash back rewards card. But keeping your long-term financial goals in mind may help you keep your credit card spending under control.

Who Should Apply for a Cash Back Credit Card?


Cash back credit cards are usually a good match for cardholders with good financial habits. In order to take full advantage of your rewards, you’ll need to consistently pay off your entire credit card balance. If you only pay the minimum every month - or you can’t pay your credit card bill in full because you have a lot of debt and other financial obligations - you absolutely should not get a cash back credit card. A card with a low interest rate, for example, or a balance transfer credit card could be more useful.

Like other kinds of credit accounts, the best cash back credit cards with the best rates are generally available to the most creditworthy consumers. If your credit score isn’t too hot, you could work on raising your score before applying for a cash back credit card.

However, it’s important to remember that if you can be responsible with a credit card, you may as well be earning rewards when you spend. Provided that you’re not paying unnecessary fees that outweigh the benefits of having a cash back card, there’s no reason not to have one - even if you only use it sparingly.

Bottom line: If you regularly use a credit card, you have little to no debt and you want more freedom when you’re ready to redeem your rewards, a cash back credit card could be perfect for you.

How to Choose the Best Cash Back Credit Card

If you’ve decided that getting a cash back credit card makes sense, you’ll need to do your research and pick a card. The best cash back credit cards have high rewards rates and make it easy to earn cash back on items you buy every day. After all, there’s no point in having a cash back credit card that makes it difficult to redeem your rewards. Great cash back credit cards let you trade in the points you earn for statement credits, actual cash rewards and points that you can apply to purchases through an online bonus mall.

There are some simple steps you’ll need to take if you’re trying to pick the right card. For one thing, you’ll need to think about the kind of credit card you need. The best cash back card for you may not be the best card for your significant other or your friend. Knowing that you want a flat-rate cash back card rather than a card with rotating bonus categories should narrow your list of options substantially.

You’ll also need to check your credit. Your score will affect your odds of getting approved for a credit card. If your score isn’t high enough, your credit card application could be denied. Applying for multiple credit cards that you don’t think you can qualify for (based on your credit score) could be a risky move.

It’s important to consider the fees you’ll have to pay as well. Some cash back cards have annual fees or foreign transaction fees that you should take into account.

As you can see, there are many factors to take into account before signing up for a card. But some of them are more important than others.

What Matters Most When Applying for a Cash Back Credit Card

One of the first things you’ll need to think about before choosing a cash back credit card is the rewards rate (or the earn rate). That’s the amount of cash back you’ll earn with every dollar you spend. A credit card with a 1.5% cash back offer should be more appealing than a card with a 1% cash back offer. You’ll also need to pay attention to whether there’s a limit to the amount of cash back you can earn. Most cash back credit cards let consumers earn an unlimited amount of rewards.

The way you spend your money is something else to consider before applying for a cash back credit card. If you’re dropping hundreds of dollars on groceries each month, getting a credit card that gives you cash back for shopping at the supermarket probably makes sense. Before you choose a card, however, just make sure your favorite retailer is on the credit card company’s list of approved merchants.

The costs associated with carrying a particular credit card should also matter. If you travel frequently, you run the risk of having to pay foreign transaction fees. And at some point, you may slip up and have to pay a late payment fee. Choosing a card with high fees doesn’t make sense for a lot of people. But in some situations, the rewards can make the fees an easier burden to bear. For example, if your annual fee is $50 and you expect to earn more than $50 in cash back each year, the fee may be worth paying.

Assessing the Value of Cash Rewards

Another way to evaluate cash back credit card offers is to examine the value of the rewards you’ll be earning. Let’s take a closer look at what to do when comparing the rewards rates for different cash back rewards cards.

Calculating the value of cash back rewards is a two-step process. The first step involves calculating the earn rate. Again, this is how much cash back you can expect to receive on top of each dollar you spend with your credit card. Ideally, you’ll want the credit card with the highest cash back percentage tied to the purchases you spend the most money on.

Let’s check out an example. Let’s say that Card A gives you a flat rate of 1.5% cash back on all purchases. Card B gives you 3% cash back on department store purchases and 1% cash back on everything else. If you spend a large percentage of your paycheck on shoes, clothing and other items that you purchase at a department store, you might as well apply for Card B. But if your spending across multiple categories is fairly even and you rarely shop at department stores, you might be perfectly fine with Card A.

The second step in assessing the value of a cash back credit card’s rewards is calculating the redemption rate. That’s the monetary value of a single cash back reward. Figuring out the redemption rate for cash back rewards simply involves taking the earn rate and dividing that amount by 100. If your cash back rewards card’s earn rate is 2%, you’ll earn 2 cents for every dollar you spend. If the rewards rate is 5%, you’ll earn 5 cents for every dollar you spend. The higher the rewards rate and the redemption rate, the higher the value of your cash back rewards.

Cash in the form of a check or statement credit may not be the only reward you can earn when you use a cash back credit card. Both standard and rewards credit cards come with various perks, such as free credit scores, roadside assistance, return protection and price matching. Calculating the value of these rewards could also be a good idea. Thinking about how much money those benefits could save could be helpful if you’re not sure whether you should choose one cash back card over another. For example, getting a car towed could cost you more than $100. If a rewards credit card offers this service at a discount, applying for it may be worth considering.

Which Type of Cash Back Credit Card Should You Choose?

Having a cash back credit card with rotating bonus categories may not work for everyone. To make the most of it, you’d have to keep track of which purchases will give you more cash back during certain months. And with these types of cash back credit cards, you often have to opt in to take advantage of the new spending category with the higher rewards rate. If you’re looking for a simple rewards card, you may want to pick a flat-rate cash back card instead.

On the flip side, if you don’t mind putting in more effort in order to earn rewards, you could benefit from having a bonus category cash back card or a card with a tiered rewards structure. A tiered rewards credit card could give you more cash rewards than a flat-rate cash back credit card, particularly if the category with the highest rewards rate is the one you tend to spend the most money on. If you spend a lot of money on a few different types of purchases, you may want a bonus category card instead.

What to Do After Choosing a Cash Back Credit Card

If you’ve found the best cash back credit card for your wallet, you can go ahead and sign up for it. Submitting an online application is normally the fastest way to get approved for a credit card, particularly if you choose a card that you can be instantly approved for. But if you’re in no rush to find out whether you qualify for a cash back credit card, you could fill out a paper application and mail it in. Be prepared to share some personal information about yourself, including your household income, your Social Security number and the amount of money that you’ve socked away in your bank accounts.

Once you’re approved for a credit card, your credit card issuer will mail it to you within seven to 10 business days. You’ll need to activate your account as soon as possible and take a look at your credit card’s terms and conditions.

If a credit card issuer refuses to issue you a cash back credit card, you might want to find out why. Is your credit score too low? Is your debt-to-income ratio (the amount of debt payments you make each month compared to your monthly gross income) too high? Have you applied for too many credit cards in recent months? Or is there a derogatory mark on your credit report that’s making you seem like a risky borrower? Knowing what you need to work on can help you fix your mistakes and prepare to apply for another credit card in the near future.

Should You Apply for More Than One Cash Back Card?

Some credit cardholders have multiple accounts open at one time. But whether you should apply for another cash back credit card depends on your lifestyle and your financial habits. If you can barely remember to pay off the one credit card you have, you probably don’t need a second one. Furthermore, if you can only pay for one annual fee, you may want to stick with just one cash back credit card. Annual fees can cost consumers hundreds of dollars. You wouldn’t want to be stuck paying a high fee you can’t afford.

On the other hand, if you’re good at keeping up with deadlines, you’re willing to pay an annual fee (or you can qualify for a card without an annual fee) and you don’t pay credit card interest, having more than one cash back credit card could be helpful. If you spend a lot of money on restaurant meals and gasoline, you could find two different cash back rewards cards that offer high rewards rates for both of those types of expenses. But if you decide to apply for two (or more) rewards cards, it’s best to protect your credit score by spacing out your applications.

Some folks take up credit card churning as a hobby. Credit card churning is the act of applying for a rewards credit card, earning a sign-up bonus, closing the account and going through the same process repeatedly. Churning cash back credit cards could be one strategy that you can implement if you’re trying to earn as many cash rewards as possible. But it could wreak havoc on your credit score, especially if your score isn’t that high to begin with. Closing a credit card could be even worse for your credit score than opening a new account since it could cause your credit utilization ratio to rise above 30%.

How to Maximize Your Cash Back Credit Card

Making your cash back card your go-to card is a good idea. That way, if your credit card company rewards you for making everyday purchases, you can rack up rewards regardless of whether you’re spending money at the mall, the airport or the movies. But you’ll need to be careful. Going over your credit line could cost you. And spending money just to earn rewards could hurt you if you find yourself with debt that you can’t get rid of.

Of course, the key to making the most of your cash back credit card is making good financial decisions. If you always pay your credit card bill on time and you pay off the entire bill every month, you’ll never spend any money on interest.

Cash back rewards typically don’t have an expiration date. But you’ll need to read your card’s fine print to find out whether that’s true for the card you selected. If your cash rewards will disappear after a certain period of time, it’s best to use them before you lose them.

Keeping track of your cash rewards and setting goals are two other ways to maximize your cash back credit card rewards. Knowing how much you’ve earned and deciding that you want to save up for a gift or earn money to put toward your mortgage payments could motivate you to make earning rewards one of your top priorities.

How to Earn as Many Cash Rewards as Possible

If your goal is to earn as much cash back as you can, you’ll need to read over your cardholder agreement carefully. That’s the only way to fully understand how to earn cash rewards and maximize them. If you can earn rewards by paying bills with your credit card, that’s one way to get extra cash back or statement credits every month.

Cash back cards with sign-up bonuses give extra cash (or higher rewards rates) when you meet a minimum spending requirement within a set period of time. With a card like that, you could earn hundreds of dollars in cash rewards or credits within months of opening your account.

Some cash back cards can be used when making purchases through online bonus malls. Not every credit card company has one. But if yours does, you can earn extra rewards by purchasing merchandise through the online shopping portal. Savvy online shoppers can find ways to claim additional rewards by making purchases through sites that offer cash back.

Frequently Asked Questions


1. Do cash back credit cards always offer cash rewards?

Some credit card companies don’t allow their customers to redeem their cash back rewards for cash. Instead, you may receive a statement credit that you can use to pay off the balances within your credit card account. Or you may be able to earn points that you can trade in for merchandise, gift cards and other items.

If your cash back credit card offers cash rewards, you’ll get a check in the mail or have your rewards deposited directly into your bank account.

2. Is it better to earn cash rewards, points or statement credits?

The answer to that question will vary based on how you plan to use your cash rewards. If you want to redeem your rewards for any kind of expense, you’ll probably want a credit card that mails a check or wires rewards to bank accounts. But if you’re serious about eliminating your credit card debt, you may want to opt for a statement credit.

If you want to easily redeem your cash back (as points) through specific rewards programs, you may have better luck with that than trying to withdraw cash from your checking account and using that money to pay for flights and other travel expenses.

3. Can I donate my cash back credit card rewards to charity?

It depends. Some rewards programs let cardholders donate their cash rewards to qualifying charitable organizations. Your contribution may be deductible. That’s one way to score an extra write-off before tax season arrives.

4. How can I evaluate cash back credit card offers?

If you’re trying to pick a cash back credit card, you’ll need to think about your financial situation and your spending habits. The best cash back cards tend to have low annual fees (or no annual fee), high rewards rates and an opportunity to earn an unlimited amount of rewards. Just make sure that the earn rate is high for the spending categories that you care most about.

You’ll also need to pay attention to the rewards structure and the way that cash back rewards can be redeemed. A cash back credit card with rotating bonus categories may not appeal to you if you’re looking for an easy way to earn cash back. But a cash back card with a flat rate that applies to all purchases may not have a high cash back percentage.

Cash back cards tend to have higher interest rates than regular credit cards. If you think you’ll eventually carry a balance, you’ll need to look at cash back credit card APRs to make sure you can afford the interest payments.

5. What’s the typical rewards rate for cash back credit cards?

Most cash back credit cards let cardholders earn between 1% and 2% cash back. The best cash back credit cards have higher earn rates for at least one or two spending categories.

6. Do cash back credit cards come with sign-up bonuses?

There are some cash back credit cards that offer a sign-up bonus. If you can qualify for one of these cards, you’ll earn cash back at a faster rate. Just remember that you’ll need to meet some sort of requirement in order to earn the bonus cash back (or the bonus rewards rate). You may have 90 days to spend a certain amount of money and claim your prize. Or you may have to wait an entire year before you can get any additional rewards.

7. Do I have to shop at specific stores in order to earn cash back rewards?

You’ll need to read your credit card’s terms and conditions to find out the answer to that question. If a cash back credit card offers cash back on everyday purchases regardless of where you shop, you shouldn’t have to worry too much about spending money at a specific store. But if you can only earn cash back when you stop by the grocery store or the mall, you might want to double-check and find out whether you can only earn rewards when you purchase items from certain places.

8. Do I need to pay my credit card bill in full every month to earn rewards?

Generally, you should be able to earn rewards as long as you make the minimum credit card payment on time every month and there aren’t any issues with your account. While you don’t have to pay off your entire credit card balance, doing so is a good idea. You’ll maximize your cash back credit card rewards when you can ensure that the benefits you’re earning outweigh the cost of fees and interest payments.

9. How soon can I cash in on my cash back credit card rewards?

Some credit card issuers make you wait until you’ve gone through a billing cycle or two before you’re allowed to redeem the rewards you’ve earned. That way, a card issuer can ensure your account is in good standing.

Some credit card companies won’t let you cash in until you spend a certain amount of money. However, most give you your cash back once a month. Some calculate cash back after each purchase. If your cardholder agreement doesn’t say much about redeeming your cash back rewards, you may want to make a phone call or check the company’s website.

10. Do cash back rewards ever expire?

Many cash back rewards don’t expire as long as an account remains open and a cardholder maintains a good track record with his or her card issuer. But some cash back rewards expire at some point. If your rewards come with an expiration date, you’ll need to make sure you use all of them while you still can. If you decide to close your credit card account, you may have to forfeit any rewards that you failed to redeem.

Final Thoughts

Cash back credit cards make it easy to earn rewards on a daily basis that you can redeem for statement credits, cash rewards, gift cards and merchandise. Most cash back rewards are only worth 1 or 2 cents for every dollar you spend. If you want your rewards to add up quickly, you’ll need to find a card with a sign-up bonus or a rewards rate that’s higher than average.

Photo credits: ©iStock.com/SIphotography, ©iStock.com/SIphotography, ©iStock.com/Xesai

Comparing
Add your details
Credit Score
Credit Rating
Select Your Credit Rating Do this later
Dismiss
Add your details
Card Category
Do this later
Dismiss
How helpful was this page in answering your question?
not helpful
very helpful
​If you could change one thing about ​this page what would it be?​
Thank you for your answer! Your feedback is very important to us.
We are working hard to improve our product and could use your help!
We pay $30 for 30 minutes on the phone to hear your thoughts on what we can do better.
Please enter your email if you'd like to be contacted to help.

Please enter your name

Best Cities for Rewards Shopping

SmartAsset’s interactive map highlights the places that are best for rewards shopping. Zoom between states and the national map to see where people can get the most rewards out of their shopping.

Worse
Better
Rank City Total Stores Store Concentration Property Crime Rate Sales Tax Rate Credit Score

Methodology Our study aims to find the cities that are best for rewards shopping. To find these places we looked at five key factors: total stores, store concentration, property crime rate, sales tax rate and credit score.

First, we added up the total number of stores in each city that fit into the following categories: Clothing/Jewelry, Luggage, Furniture, Electronics & Appliance, Hardware & Construction, Food, Small Gift Stores and Miscellaneous. Next, we calculated the store concentration by determining the number of those store types per square mile. Then we looked at the average credit score for people by state.

We also calculated the sales tax rate for each area by taking an average of state and local tax rates. Finally, we wanted a metric to show how safe it is to shop in the area so we looked at the property crime rate per 100,000 people.

To calculate the Best Cities for Rewards Shopping Index, we ranked the cities on each of the categories and then indexed each category. We then calculated a weighted average of the indices (with greater weighting given to sales tax rate and property crime rate) to yield an overall Best Cities for Rewards Shopping Index. A city that is suitable for rewards shopping means people there have low sales tax rates, low property crime rates, high store concentration, high number of stores and high credit scores.

Sources: Federal Bureau of Investigation, United States Census Bureau, Experian