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Wondering how to choose the best cash back credit card? Jump to our tips »
We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.
Best card for flat-rate cash rewards earning: Wells Fargo Active Cash Card
Best card for everyday spending: Chase Freedom Unlimited
Best card for rotating categories and flexible redemptions: Chase Freedom Flex
Best card for rotating cash-back categories: Discover it Cash Back
Best card for families: Amex Blue Cash Preferred
Best card for dining, groceries, and entertainment with no annual fee: Capital One SavorOne
Best card for automatically customizing rewards: Citi Custom Cash Card
Best card for choosing your own cash back categories: US Bank Cash Plus
Best card for balance transfers: Citi Double Cash
Best card for fair or average credit: Capital One Quicksilver One
Best card for lower credit scores: Discover it Secured Card
Best card for students: Capital One SavorOne Student Cash Rewards Credit Card
Best card for Bank of America Preferred Rewards members: Bank of America Unlimited Cash Rewards
Best card with bonus categories for small businesses: Chase Ink Business Cash
Best card for big-spending small businesses: Capital One Spark Cash Plus
Compare the best cash back credit cards
Wells Fargo Active Cash® Card (jump to Wells Fargo Active Cash card details »)
The Wells Fargo Active Cash℠ Card is our top pick if you prefer a card that earns a flat rewards rate on everything. There are no bonus categories to keep track of, and you’ll earn 2% cash rewards on purchases.
It offers a substantial welcome bonus for a no-annual-fee card: Wells Fargo Active Cash℠ Card. In addition, new cardholders get a Wells Fargo Active Cash® Card (followed by a Wells Fargo Active Cash® Card APR), which is super useful if you have large expenses you want to pay off over time.
Credit cards with 0% APR offers can be tempting to use for big purchases. Just be sure you have the ability to pay off the entire balance before the introductory period ends. Otherwise, you could find yourself saddled with high-interest debt.
The Wells Fargo Active Cash℠ Card comes with a good array of benefits, which include cell phone protection, roadside dispatch, travel emergency assistance, and access to the Visa Signature Concierge. However, it does charge foreign transaction fees, so if you’re traveling outside the US, you’ll want to pack a different card.
Read more about the Wells Fargo Active Cash:
Wells Fargo Active Cash credit card review
Chase Freedom Unlimited® (jump to Chase Freedom Unlimited details »)
If you’re looking for a card that combines strong bonus categories with a decent flat-rate earn rate on non-bonus spending, the Chase Freedom Unlimited® could fit the bill. It offers 5% cash back (5x points) on travel purchased through Chase Ultimate Rewards, 3% cash back (3x points) on dining and drugstore purchases, and 1.5% cash back (1.5x points) on everything else.
The Chase Freedom Unlimited® has no annual fee and offers a Chase Freedom Unlimited®. After that, there’s a 14.99%–23.74% variable APR. If you have a major purchase ahead of you, that introductory offer can be useful.
Although it’s marketed as a cash-back card, the Chase Freedom Unlimited® actually earns Chase Ultimate Rewards points that you can redeem for cash, travel, and gift cards at a rate of 1 point = 1 cent.
If you also have an annual-fee Ultimate Rewards card like the Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, or Ink Business Preferred® Credit Card, you can pool your points from the two cards. Then, you’ll be able to transfer the whole body of points to Chase’s airline and hotel partners or use them to book travel through Chase with a bonus.
Plus, the Chase Freedom Unlimited® has a substantial welcome offer: Chase Freedom Unlimited®.
Read more about the Chase Freedom Unlimited Card:
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Chase Freedom Flex℠ (jump to Chase Freedom Flex details »)
The Chase Freedom Flex℠ replaced the Chase Freedom in Chase’s lineup of cash back cards, and the good news is that it’s even better than the original. Unlike the Chase Freedom Unlimited®, it earns 5% cash back on up to $1,500 spent in combined purchases (then 1%) within certain bonus categories each quarter of the year (activation is required).
Sometimes there’s just one major category per quarter, while other times there can be a few different ones. Past categories have included gas stations, local commuter transportation, department stores, grocery stores, drug stores, restaurants, movie theaters, and even Amazon.
Like the Chase Freedom Unlimited®, the Chase Freedom Flex℠ earns rewards in the form of Chase Ultimate Rewards points, which are worth 1 cent apiece when you redeem them for cash back, travel, or gift cards.
The Chase Freedom Flex℠ also earns 5% cash back on travel booked through Chase Ultimate Rewards, 3% back on dining and drugstores, and 1% back on everything else. These other bonus categories are exactly what you’ll find on the Chase Freedom Unlimited®.
Right now, the Chase Freedom Flex℠ offers a welcome bonus of Chase Freedom Flex℠. There’s no annual fee.
Read more about the Chase Freedom Flex card:
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Discover it® Cash Back (jump to Discover it Cash Back card details »)
If you prefer a card that earns straight cash back, not points, and like the idea of rotating bonus categories, the Discover it® Cash Back could be a great fit. You can earn 5% cash back in popular rotating quarterly bonus categories when you activate, on up to $1,500 in combined spending (then 1%). You’ll also earn 1% back everywhere else Discover It Cashback rotation.
Discover cards, including the Discover it® Cash Back, don’t charge an annual fee or foreign transaction fees. So you can safely use this card on trips abroad without worrying about getting dinged with extra charges.
Instead of a regular welcome bonus, Discover rewards new cardholders in a different way. After the first 12 months, it will match all of the rewards you earn from the card through the Discover Cashback Match program. That means you can effectively earn up to 10% back in your first year — and if you’re a big spender, this can pay off handsomely.
Read more about the Discover it Cash Back Card:
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Blue Cash Preferred® Card from American Express (jump to Amex Blue Cash Preferred card details »)
If you’re looking for an American Express cash back card, especially if you have a large family that spends a lot on groceries, streaming, and commuting, the Blue Cash Preferred® Card from American Express is an excellent option. The Blue Cash Preferred® Card from American Express offers a Blue Cash Preferred® Card from American Express, before switching to a 12.99% to 23.99% variable APR APR (See Rates).
Currently, the card offers a welcome bonus of Blue Cash Preferred® Card from American Express. It also comes with a handful of travel and purchase protections, including car rental insurance, purchase protection, return protection, and extended warranty.
Keep in mind there’s an annual fee of Blue Cash Preferred® Card from American Express, so you’ll want to be sure you spend enough to justify paying it. If you prefer a no-annual-fee Amex cash-back card, check out the Blue Cash Everyday® Card from American Express instead.
Cash back comes in the form of a statement credit, so effectively, you can use it to “erase” purchases.
The Blue Cash Preferred® Card from American Express offers the highest rewards rate available for grocery spending, although there is a $6,000 annual spending cap on that 6% rate. After that, you earn 1% (cash back is received in the form of Reward Dollars). Otherwise, the card earns 6% back on select U.S. streaming subscriptions, 3% back at U.S. gas stations and on transit, and 1% back on all other purchases.
Read more about the Amex Blue Cash Preferred card:
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Capital One SavorOne Cash Rewards Credit Card (jump to Capital One SavorOne card details »)
The Capital One SavorOne Cash Rewards Credit Card seems almost custom-made for folks who like to get out and experience life to the fullest. If you’re a foodie, love attending concerts and sporting events, or even enjoy entertaining at home, this no-annual-fee card can help you earn a lot of rewards for your spending.
Cardholders earn 3% cash back on dining, at grocery stores (excluding superstores like Walmart and Target), entertainment, and popular streaming services, and 1% cash back on all other purchases. The Capital One SavorOne Cash Rewards Credit Card recently began offering 5% cash back on hotels and car rentals booked through Capital One Travel and 8% cash back on Capital One Entertainment purchases, and there’s a promotion to earn 8% cash back on Vivid Seats purchases through January 2023.
The welcome bonus is generous, too: Capital One® SavorOne® Cash Rewards Credit Card. And if you’ve got big purchases coming up, a Capital One SavorOne Cash Rewards Credit Card (followed by a Capital One® SavorOne® Cash Rewards Credit Card APR) can make it easier to spread out your payments.
This card offers a handful of good benefits, including extended warranty, travel accident insurance***, and travel emergency assistance services. As with all other Capital One cards, you won’t pay foreign transaction fees on international purchases, so it’s great to use when you’re out globetrotting.
Read more about the Capital One SavorOne Cash Rewards card:
Capital One SavorOne credit card review
Citi Custom Cash℠ Card (jump to Citi Custom Cash card details »)
For a more hands-off approach to maximizing your rewards, the Citi Custom Cash℠ Card offers 5% cash back on up to $500 in purchases in the eligible category you spend the most in each billing cycle (then 1%), and 1% on all other purchases. It also comes with a decent welcome offer for a no-annual-fee card: Citi Custom Cash℠ Card.
If your spending habits tend to change from time to time, this card is worth a look — especially because the list of eligible categories includes lots of common expenses.
Qualifying 5% back categories with the Citi Custom Cash℠ Card are restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs, and live entertainment.
While the Citi Custom Cash℠ Card is advertised as a cash-back credit card, it actually earns Citi ThankYou points. You can redeem your points for cash back, travel booked through Citi, gift cards, merchandise, and more at a rate of 1 cent per point.
However, you could potentially get more value from your rewards if you also have the Citi Premier® Card or Citi Prestige® Card (no longer available to new applicants). That’s because you can pool your points in either of these card accounts and then transfer them to airline and hotel partners, including JetBlue, Singapore Airlines, Virgin Atlantic, and Wyndham Rewards.
Read more about the Citi Custom Cash:
Citi Custom Cash credit card review
U.S. Bank Cash+® Visa Signature® Card (jump to US Bank Cash Plus card details »)
One of the newer types of cards offers the ability to choose your own bonus categories, and they’re a great way to maximize your cash back by earning the highest rewards on the purchases you make the most. The U.S. Bank Cash+™ Visa Signature® Card leads the way in this regard, because it offers 5% cash back on two eligible categories (from a list) of your choice, on up to $2,000 in combined purchases each quarter (then 1% back).
Cardholders also get to choose a 2% cash back “everyday” category from gas and EV charging stations, restaurants, or grocery stores, and earn 1% cash back on all other eligible purchases.
What makes the U.S. Bank Cash+™ Visa Signature® Card such a compelling option is its long list of eligible 5% categories: prepaid air travel, hotel stays, and car reservations booked directly in the Rewards Travel Center online portal, fast food, home utilities, TV, internet, and streaming services, department stores, electronic stores, cell phone providers, sporting goods stores, furniture stores, movie theaters, gyms and fitness centers, ground transportation, and select clothing stores.
New cardholders can earn a U.S. Bank Cash+™ Visa Signature® Card, which is a solid offer for a no-annual-fee card. After opening your account, you’ll also qualify for a U.S. Bank Cash+® Visa Signature® Card (then a U.S. Bank Cash+™ Visa Signature® Card APR).
As a Visa Signature card, it comes with additional perks including Visa Signature concierge and Visa Signature Luxury Hotel Collection access, travel and emergency assistance, and roadside dispatch.
Read more about the US Bank Cash Plus card:
Citi® Double Cash Card (jump to Citi Double Cash card details »)
The Citi® Double Cash Card was once our overall favorite flat-rate cash back card, but it’s since been overshadowed by the Wells Fargo Active Cash℠ Card, which offers a welcome bonus, more benefits, and the same effective cash rewards rate on purchases.
That said, the Citi® Double Cash Card has an advantage if you’re looking for a long intro 0% APR on balance transfers. New cardholders get a Citi® Double Cash Card (then a Citi® Double Cash Card APR).
This no-annual-fee card earns 1 point per dollar as you spend, and 1 point per dollar when you pay your bill (worth a total of 2% cash back).
As of March 28, 2022, the Double Cash card earns Citi ThankYou points instead of cash back directly. You can use these points for cash back, travel, gift cards, and more, at a rate of 1 point = 1 cent.
The Citi® Double Cash Card doesn’t offer a whole lot of other benefits, so it makes the most sense if you’re specifically after a generous balance transfer offer (or want a card that earns Citi ThankYou points to boost your stash — yes, you can combine the points from this card with other ThankYou points-earning cards like the Citi Premier® Card).
Read more about the Citi Double Cash card:
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Capital One QuicksilverOne Cash Rewards Credit Card (jump to Capital One QuicksilverOne card details »)
If you’re new to credit or working on building (or rebuilding) your credit score, it’s quite possible you’ll fall into the “fair” credit range. Fair or average credit is defined as any FICO score between 580 to 669 on a 300 to 850 scale, and unfortunately, there aren’t as many good options for earning credit card rewards if that’s where your score lands.
That said, a handful of credit cards for fair or average credit do come with decent earning rates, albeit without a welcome bonus. The Capital One QuicksilverOne Cash Rewards Credit Card is among the best of the bunch, offering 1.5% cash back on all eligible purchases (with the exception of hotels and rental cars booked through Capital One Travel, which earn 5% cash back), with no caps.
Opening and using credit cards responsibly can actually help boost your credit score over time. If you’re still working on your credit, read our step-by-step guide to building credit with credit cards to learn more about this strategy.
As with many cards geared to those with lower credit scores, the Capital One QuicksilverOne Cash Rewards Credit Card charges an annual fee (Capital One® QuicksilverOne® Cash Rewards Credit Card). But, like other Capital One cards, it doesn’t add any foreign transaction fees to international purchases, so it’s a safe bet to use abroad.
Discover it® Secured Credit Card (jump to Discover it Secured card details »)
If you have a bad credit score or a limited credit history, you may not be approved for some of the other cash back credit card options outlined in this article. In that case, the Discover it® Secured could make the most sense.
Even though it’s a secured card, you can earn bonus cash back at gas stations and restaurants on up to $1,000 each quarter — and Discover will match all the cash back you’ve earned at the end of your first year.
Since it’s a secured credit card (meaning you put down money as a refundable deposit to “secure” your account), it’s easier to get approved for this card. With the Discover it® Secured, automatic reviews start at eight months to see if Discover can transition you to an unsecured line of credit and return your deposit.
Read more about the Discover it Secured Card:
Discover it Secured Card review
Capital One SavorOne Student Cash Rewards Credit Card (jump to Capital One SavorOne Student card details »)
Applying for a credit card when you’re still in college can be a little tricky because most students don’t have a long credit history or high credit score. Student credit cards are more accessible because they typically only require fair or average credit to get approved.
The Capital One SavorOne Student Cash Rewards Credit Card is a great choice if your spending habits are typical of many college students. It earns 3% cash back on dining (including restaurants, bars, cafes, and lounges), at grocery stores (except superstores like Walmart and Target), entertainment (such as movies, professional sporting events, and amusement parks), and popular streaming services (like Netflix, Hulu, and Disney+).
It also earns 5% cash back on car rentals and hotels booked through Capital One Travel, 8% cash back on Capital One Entertainment purchases, and 8% cash back on Vivid Seats purchases (through January 2023). All other purchases earn 1% back.
The Capital One SavorOne Student Cash Rewards Credit Card doesn’t always come with a welcome bonus, but for a limited time, it’s offering a Capital One SavorOne Student Cash Rewards Credit Card. The minimum spending requirement is very attainable compared to other student credit cards that offer a sign-up bonus.
This card comes with built-in travel and purchase coverage you don’t often find on student credit cards, including price protection***, extended warranty***, car rental insurance***, roadside dispatch***, and travel accident insurance***. There are no foreign transaction fees to worry about, so if you’re heading out on a study-abroad program or plan to travel during your summer breaks, using your card won’t result in extra charges.
Read more about the Capital One SavorOne Student card:
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Bank of America® Unlimited Cash Rewards Credit Card (jump to Bank of America Unlimited Cash Rewards card details »)
On the surface, the Bank of America® Unlimited Cash Rewards Credit Card doesn’t particularly stand out. It earns 1.5% cash back on all purchases and comes with a welcome bonus of Bank of America® Unlimited Cash Rewards Credit Card — a decent return, to be sure, but not more compelling than similar cards.
But the card has one feature that can make it a lot more appealing if you’re already a Bank of America customer. Bank of America Preferred Rewards members can earn 25% to 75% more cash back with this card, depending on their rewards tier. Effectively, Preferred Rewards members at the highest level can earn 2.625% cash back on all purchases, which is hard to beat for a no-annual-fee card.
Bank of America Preferred Rewards tiers are: Gold (25% more rewards on eligible Bank of America rewards credit card spending, or effectively 1.875% cash back), Platinum (50% more rewards, effectively 2.25% cash back), and Platinum Honors (75% more rewards, effectively 2.625% cash back).
The Bank of America® Unlimited Cash Rewards Credit Card can also be a good choice if you’re looking for an intro APR offer. New cardholders receive a Bank of America® Unlimited Cash Rewards Credit Card, followed by a Bank of America® Unlimited Cash Rewards Credit Card APR.
Read more about the Bank of America Unlimited Cash Rewards card:
Ink Business Cash® Credit Card (jump to Ink Business Cash card details »)
Whether you have a part-time freelance gig or operate a full-blown LLC, opening a small-business credit card is a smart way to keep your personal and business expenses separate while earning rewards for your purchases. The Ink Business Cash℠ Credit Card is a great no-annual-fee option for those who spend a lot on common business expenses, because it offers up to 5% cash back on your spending.
Cardholders earn 5% cash back (5x points) at office supply stores and on internet, cable, and phone services, 2% cash back (2x points) at gas stations and restaurants, and 1% cash back (1x points) on all other purchases. The 5% and 2% cash-back categories are capped at a combined total of $25,000 in purchases per year; after that, you’ll earn 1% back.
The Ink Business Cash℠ Credit Card offers one of the highest welcome bonuses of any no-annual-fee business card: Ink Business Cash® Credit Card.
Although it’s marketed as a cash-back card, the Ink Business Cash℠ Credit Card actually earns Ultimate Rewards points that you can redeem for cash, travel, or gift cards at a rate of 1 cent per point. This also means you can pool the rewards you earn from this card with another annual-fee Chase card (Ink Business Preferred® Credit Card, Chase Sapphire Reserve®, Chase Sapphire Preferred® Card) and unlock more valuable redemption options, including transferring rewards to airline and hotel partners.
As for benefits, there’s an impressive list, including primary car rental insurance (when renting for business purposes), extended warranty, purchase protection, travel and emergency assistance services, and roadside dispatch. New cardholders also receive a Ink Business Cash® Credit Card, followed by a Ink Business Cash® Credit Card APR.
Read more about the Chase Ink Business Cash card:
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Spark 2% Cash Plus (jump to Capital One Spark Cash Plus card details »)
Paying an annual fee for a credit card doesn’t always make sense, but if your small business makes a lot of big purchases, the Spark 2% Cash Plus could be well worth its Spark 2% Cash Plus annual fee. Because it’s a charge card, it doesn’t have a preset spending limit, so it’s perfect for small businesses that need flexibility.
New cardholders can earn a substantial bonus, as well: Spark 2% Cash Plus. As for rewards on spending, the card earns unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, and 2% cash back on all other purchases.
If you also have a Capital One miles-earning card, like the Capital One Venture X Rewards Credit Card, Capital One Venture Rewards Credit Card, or Capital One Spark Miles for Business, you can convert rewards from the Spark 2% Cash Plus to miles. Then, if you transfer your miles to Capital One’s airline and hotel partners, you can potentially squeeze even more value from them.
Big spenders can also take advantage of a $200 bonus every year they spend $200,000 or more on their card. The Spark 2% Cash Plus also offers car rental insurance, extended warranty, roadside assistance, and travel emergency assistance.
Read more about the Capital One Spark Cash Plus card:
Capital One Spark Cash Plus review
Other top credit cards that just missed the cut
We evaluated dozens of cash back credit cards and chose 15 of the very best in the most broadly useful categories for our list. Several other cards were on our short list, and they’re all very good in their own right, but for various reasons they didn’t quite cut it.
Here are some of the cards that didn’t make it, and why:
Capital One Savor Cash Rewards Credit Card— While it offers a bigger welcome bonus and slightly stronger rewards rate than its sibling, the Capital One SavorOne Cash Rewards Credit Card, it also charges a Capital One Savor Cash Rewards Credit Card annual fee. You’d have put a lot of spending on the card to justify the extra cost, so for most folks the no-annual-fee version is a better deal. Here’s our Capital One Savor card review.Bank of America® Customized Cash Rewards Credit Card — This card is good for choosing your own bonus categories, but you’ll only earn 3% cash back in the category of your choice, versus two 5% cash-back categories of your choice on the U.S. Bank Cash+® Visa Signature® Card. That said, if you’re a Bank of America Preferred Rewards member, this card could be a lot more lucrative. Read our Bank of America Customized Cash Rewards review to find out more.Capital One Quicksilver Cash Rewards Credit Card— This card is a decent choice if you’re looking for a card that earns 1.5% cash back on most purchases, but other cards, like the Chase Freedom Unlimited® and Wells Fargo Active Cash℠ Card, offer opportunities to earn more rewards and benefits. You can find side-by-side comparisons in our Capital One Quicksilver review.Blue Cash Everyday® Card from American Express — This is decent option if you want a card with no annual fee that earns bonus rewards on groceries, gas station purchases, and online retail purchases, but the 3% cash back it earns at US supermarkets only applies to the first $6,000 spent each calendar year (then 1% back). To compare, the Capital One SavorOne Cash Rewards Credit Card earns an unlimited 3% on groceries worldwide, plus on dining, entertainment, and eligible streaming. Here’s our Amex Blue Cash Everyday card review if you want to learn more.Amazon Prime Rewards Visa Signature Card — If you’re an Amazon Prime member, earning 5% cash back at Amazon and Whole Foods with this card is hard to beat (and 2% back at restaurants, gas stations, and drugstores is nothing to sniff at, either). But if you’re not a Prime member or don’t spend a lot at Amazon, other cards are probably a better pick. Check out our Amazon Prime Rewards card review for a closer look. Ink Business Unlimited® Credit Card — The sibling to the Ink Business Cash℠ Credit Card, this card has the same welcome bonus but a totally different earning structure, offering 1.5% cash back (1.5x points) on all purchases. It’s definitely worth a look if you don’t spend a lot in the Business Cash card’s bonus categories, but you won’t have opportunities to get outsized earnings. Read our Ink Business Unlimited review to help decide which version is better for you.
How we chose the best cash back credit cards
In terms of flexibility, cash back is the king of credit card rewards. Many cash back credit cards give you the option to redeem your accrual as either cash, a statement credit, or a transfer to your bank account.
Cash back cards vary greatly in their return rates — you can earn anywhere from 1% to 6% back. Even better, many cash back cards have no annual fee, so you don’t have to pay for the privilege of earning rewards.
If you’re new to rewards credit cards and aren’t interested in earning travel points or miles, a cash back card is the best option for you. With cash back cards, 1% back will always be 1 cent back, no matter what, and you can use your cash back to lower your monthly bill or transfer it to your checking account, among other options.
The best cash back credit card for you depends on your spending habits and if you prefer a flat rate of cash back on all spending or earning bonus cash back on specific types of purchases. Flat-rate cash back cards are best for those who don’t want to keep track of multiple bonus categories and just want a simple earning structure.
But if you really want to maximize your rewards earning, choosing a card that earns bonus cash back in categories where you spend a lot — like groceries, dining, or gas — can make a huge difference in your rate of return.
We narrowed down the dozens of cash back credit cards currently available to new applicants by looking at a few factors:
Ease of use — Are there any hoops to jump through, like needing to be a member of a specific bank?Cash-back earning potential — How much cash back can you earn with this card, and how broad are the bonus categories?Annual fee — Many cash back cards waive an annual fee, but for the few that do charge a fee, is it justified based on the card’s rewards?Options for various types of consumers — We wanted our top cash back card picks to reflect different types of users, from families looking to maximize grocery spending to those looking to rebuild their credit score.
Cash back credit cards frequently asked questions (FAQ)
How does earning cash back work?
Cash-back credit cards earn you a percentage of cash back — usually at least 1%— on every dollar you spend (or more with cards that have bonus cash back categories). You can transfer the cash back you earn from these cards to a bank account or use them to wipe charges from your credit card statement.
Credit card issuers also allow you to redeem the cash back you earn for gift cards and merchandise. If you’re trying to put money back in your wallet, our top recommendations are to transfer your cash back to a bank account or use it to reduce the amount owed on your credit card statement.
Do cash back cards actually give you cash?
Cash-back credit cards do give cash, but that’s not to say you’ll necessarily see the physical cash. You’re typically awarded cash back as a credit that you can use to cancel out purchases from your credit card statement, or to redeem for gift cards or merchandise online.
What are the different types of cash back cards?
Flat rate — These cards earn the same rate of cash back on all purchases. For example, the Chase Freedom Unlimited® earns 1.5% back on most spending (the Freedom Unlimited also offers bonus cash back on eligible travel and drugstore purchases).Select bonus categories — Many other cash back cards offer bonus cash back (more than 1%) on select spending categories. For example, with the Capital One Savor Cash Rewards Credit Card, you’ll earn 4% back on dining, streaming services, and entertainment, and 3% back at grocery stores.Rotating categories — A few cards, including the Chase Freedom Flex℠ , offer bonus cash back on a selection of spending categories that changes every quarter of the year. These cards have a cap on how much bonus cash back you can earn each quarter — with the Chase Freedom Flex℠ , you’ll earn 5% back on up to $1,500 in combined purchases each quarter (then 1%).Some cards are starting to offer yet a fourth format for delivering cash back rewards: pick your own bonus categories from a list of options. These cards include the Bank of America® Customized Cash Rewards Credit Card and the U.S. Bank Cash+™ Visa Signature® Card.
What credit card offers the most cash back?
The Blue Cash Preferred® Card from American Express earns 6% back on the first $6,000 you spend each calendar year at US supermarkets (then 1% back), and 6% back on select US streaming services, for example, and the Capital One Savor Cash Rewards Credit Card is the most rewarding pick for dining out with 4% back. As you can see, different cards earn the most cash back in different categories, so you’ll want to factor in your spending habits and preferences when deciding which cash-back card makes the most sense for you.
Is a cash back card better than a travel or rewards card?
It depends on what you want to do with your rewards. If you want to put money back in your bank account, a cash back credit card will help you accomplish just that — and you usually won’t have to pay a very high annual fee, if you have to pay one at all.
On the other hand, if you’re hoping to earn rewards that you can redeem for travel, a card that earns points is more up your alley. Our picks for best points-earning rewards cards earn either Amex Membership Rewards points, Chase Ultimate Rewards points, Citi ThankYou Rewards points, or Capital One miles. You can transfer all of these currencies to travel partners and redeem them for things like free flights. (Note that while Capital One calls its rewards currency “miles,” they aren’t miles with a given airline program.)
Read Insider’s guide to points and miles valuations to find out what your credit card rewards are worth.
If you’re willing to juggle multiple credit card accounts, there’s value in having both cash back and points-earning cards. If you prefer a single-card strategy, evaluate your goals and consider how much you’re willing to pay in annual fees to make the best decision for your situation.
How do you compare cards to find the best one?
A good cash back card is one with generous bonus categories, since the goal is to earn as much cash back as possible on your spending. The more bonus categories, the better, and the higher the cash back rate, the better.
That said, the best cash back card is different for everyone. To find the best one for you, you’ll want to look for a few things:
The cash back rate for your common spending categories. Extra cash back for gas isn’t much use if you don’t drive. Consider how you intend to use this card, and look at the rate for those spending categories.How you redeem your cash back. Make sure you’re clear on what you’re earning. Is it statement credit? Cash? Points? If points, can they be combined with or transferred to other cards you have, or brands you like?The annual fee. An annual fee may make or break your choice. Are you willing to pay one? And more importantly, can you afford it comfortably — or will it be effectively wiped out by the cash back you’ll earn in a year?
We don’t mention the APR because the rate only applies if you’re carrying a balance on your credit card. We recommend applying for a cash back credit card intending to pay off the balance in full each month. For other categories of credit cards, like balance transfer cards, the APR might be a more important consideration.
If this all sounds too complicated, you can’t go wrong by using the Wells Fargo Active Cash® Card, which has no annual fee and a flat earning rate 2% cash rewards on purchases.
What are the pros and cons of a cash back credit card?
Cash back credit cards are often best used in combination with cards that earn points to create a complete credit card portfolio that takes advantage of multiple types of rewards. If you’re trying to decide whether to open a cash back credit card, whether as your first card or one of many, bear these pros and cons in mind:
Pros of cash back credit cards:
They rarely carry annual feesThere are no restrictions on how you can redeem and spend the cashYou can earn airline and hotel status by booking with cash (but not points)
Cons of cash back credit cards:
They rarely offer large sign-up or welcome bonusesCash back is generally less valuable, dollar for dollar, than points
How can you make the most of a cash back credit card?
If you have a cash back credit card or are considering opening one, you’ll want to make the most of it. Keep the following steps in mind to get the most value from your card:
Always pay the balance in full. Credit card cash back or points aren’t useful if you’re carrying a balance and paying interest charges each month. To make the most of rewards, use your card responsibly: Spend only money you have and pay your bill in full each month.
Read up on rewards rates for different spending areas. Some cash back cards offer elevated rewards rates on specific spending areas, like restaurants, gas stations, or supermarkets. Some of these cards even change those areas from quarter to quarter, meaning you’ll want to stay on top of where your card earns the most and when. If you’re using this card for every purchase, you don’t need to be as diligent, but if you’re using your card as one of many you’ll want to be sure you know how to maximize rewards.
Make sure to redeem your cash back. It might be tempting to let your cash back pile up just to watch the total tick up, but it’s more useful if you redeem it. You can generally apply the cash to your card balance or get it deposited in your checking account, and either one is a fine option.
Consider opening a “sister” card. In some cases, you can transfer cash back to a points-earning card on which your rewards are worth more. Chase cards are an example of this: If you hold a cash back card like the Chase Freedom Flex℠ and a points-earning card like the Chase Sapphire Preferred® Card, you can transfer cash back earned on the Freedom Flex (which is technically earned in Ultimate Rewards Points) to the Sapphire Preferred, and unlock more redemption options. This strategy isn’t required to make the most of your cash back card, but it can help take rewards to the next level.