Best Cards Summary
Chase Freedom Unlimited®
Why this is one of the best cash back credit cards: Chase Freedom Unlimited charges no annual fee. It earns 5% cash back on travel purchased through Chase Ultimate Rewards, 3% cash back on dining and drugstore purchases and 1.5% cash back on all other purchases. If you get this card and spend $500 within three months of opening it, you can earn a $200 bonus. [See our full review.]
Discover it® Cash Back
Why this is one of the best cash back credit cards: The Discover it Cash Back offers 5% cash back each quarter in rotating categories, such as Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. All other purchases earn unlimited 1% cash back. There is no annual fee. At the end of your first year as a cardmember, Discover will match all the cash back you earned. [See our full review.]
Bank of America® Cash Rewards credit card
Why this is one of the best cash back credit cards: The Bank of America Cash Rewards card lets you pick one category to earn 3% cash back, including online shopping or gas. Grocery store and wholesale club purchases get 2% back. You’ll also receive a $200 cash rewards bonus after spending $1,000 on the card in the first three months. [See our full review.]
Chase Sapphire Preferred® Card
Why this is one of the best cash back credit cards: The Chase Sapphire Preferred Card is appealing for cash back on dining and traveling. Those purchases earn two points per dollar, while other purchases earn one point per dollar. You can redeem points for cash back, travel, gift cards and more. [See our full review.]
U.S. Bank Cash+™ Visa Signature® Card
Why this is one of the best cash back credit cards: The U.S. Bank Cash+ Visa Signature Card has no annual fee and offers cardholders a three-tiered cash back rewards program. You’ll earn 5% cash back on the first $2,000 in combined eligible net purchases each quarter in two categories of your choice and 2% cash back on your choice of one everyday category. All other eligible net purchases earn 1% cash back. When you make $500 in eligible purchases within 90 days of opening an account, you’ll earn $200. [See our full review.]
Blue Cash Everyday® Card from American Express
Why this is one of the best cash back credit cards: The Blue Cash Everyday Card from American Express rewards you with cash back on day-to-day purchases. You’ll earn 3% cash back at U.S. supermarkets on up to the first $6,000 per year in purchases, then 1% back. Purchases at U.S. gas stations and select U.S. department stores earn unlimited 2% cash back. Plus, you’ll get unlimited 1% back on other purchases with no annual fee. New cardholders earn $200 back after you spend $1,000 in purchases within the first 3 months. [See our full review.]
Chase Sapphire Reserve®
Why this is one of the best cash back credit cards: The Chase Sapphire Reserve card offers a 50,000-point sign-up bonus worth $750 in travel rewards after you spend $4,000 on purchases in the first three months from account opening. You earn three points per dollar spent on travel and dining. Redeem points for travel through Chase Ultimate Rewards to receive a 50% points bonus. [See our full review.]
Discover it® chrome
Why this is one of the best cash back credit cards: This card caters to consumers who want to earn cash back on gas and dining purchases. You’ll earn 2% cash back at gas stations and restaurants on up to the first $1,000 in combined purchases quarterly. After that, you’ll earn 1% back, along with unlimited 1% cash back on all other purchases. There’s no annual fee and rewards never expire. [See our full review.]
Chase Freedom Flex℠
Why this is one of the best cash back credit cards: Chase Freedom Flex delivers 5% cash back on up to $1,500 each quarter in rotating bonus categories you activate. You’ll also earn 5% back on travel purchased through Chase, 3% back at drugstores and restaurants, including takeout and delivery, and 1% back on other purchases year-round. [See our full review.]
Blue Cash Preferred® Card from American Express
Why this is one of the best cash back credit cards: The Blue Cash Preferred Card from American Express offers cash back on everyday purchases. Cardholders earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases and then 1% back. Select U.S. streaming subscriptions earn 6% cash back; transit and U.S. gas stations earn 3% cash back; and other purchases earn 1% cash back. [See our full review.]
What Is a Cash Back Credit Card?
A cash back credit card allows you to earn cash rewards for card purchases that can be redeemed for checks, bank deposits or statement credits. You could get a rebate on every purchase you make with a cash back card.
Say your card earns 1% cash back on all purchases. That percentage might not seem like much, but it can add up: Spend $1,000, and you get $10 back just for using the card.
How Do Cash Back Credit Cards Work?
You can choose from several types of cash back credit cards, and each one works a bit differently. Here’s what you need to know about them:
Flat-rate cards. A flat-rate card pays the same amount of cash back on each purchase, regardless of what it is. You might earn 1.5% back on all purchases, for example.
Your options for redeeming cash back rewards with flat-rate cards are statement credits, checks or bank deposits. Some cash back cards provide other ways to redeem rewards, such as travel bookings, gift cards or products.
Tiered category cards. These credit cards offer different cash back rates for different types of purchases. Most cards let you earn 1% to 6% back on eligible purchases. You might get 3% back on groceries, 2% on gas purchases and 1% on other purchases, for instance.
If you choose this type of cash back card, you can earn a lot of rewards if you maximize your spending in each category. But read the fine print because each category usually has a dollar limit and often other limitations.
Rotating category cards. One of these cash back cards has 5% bonus categories that rotate quarterly. Common categories include groceries, gas stations, home improvement stores, and even Amazon and Uber purchases.
Some caveats: You have to sign up online every quarter or you won’t earn the bonus rewards. Also, the 5% bonus categories have dollar limits, so you will need to track your quarterly earnings.
U.S. News Survey: As You Earn Cash Back, Beware Card Costs
Are you using your cash back credit card the same way that others do? U.S. News has the answers for you after asking cash back cardholders how they choose and use their cards.
What’s common: carrying a balance. Many cash back credit card users carry a balance on a card at least once each year. Although cardholders often earn at least $300 annually in cash back rewards, interest charges on card balances can easily wipe out the value of these rewards.
Among the other key U.S. News survey findings are:
- Cardholders usually prefer cash back credit cards with rewards for everyday spending, such as gassing up or buying groceries.
- Cash back rewards rate is the top factor that affects card choice.
- Grocery and gas purchases earn cash back cardholders the most rewards.
- About half of cash back card users earn $300 or more in rewards annually.
- Cash back cardholders often don’t like interest charges or annual fees, and most will avoid cards with annual fees.
- Many cash back card users aren’t earning sign-up bonuses.
Cash back cards with rewards for everyday spending are the most popular choice in the cash back credit card category.
Cash back rewards rate is the top factor for consumers selecting a cash back credit card.
Grocery and gas purchases earn cash back card users the most rewards.
About half of cash back card users earn at least $300 in rewards each year.
More than half of cash back cardholders carry a balance.
Card costs are a negative for cash back cardholders.
Most cash back cardholders aren’t earning sign-up bonuses.
Nearly 70% of cash back cardholders prefer cash back cards with no annual fee.
Cash back rewards programs are easy to use for most cardholders.
- U.S. News ran a nationwide survey through Google Surveys in December 2019.
- The survey sample came from the general American population, and the survey was configured to be representative of this sample.
- The survey asked 10 questions related to cash back credit cards.
What Are Some Pros and Cons of Cash Back Credit Cards?
Easy to understand earnings. Tracking how much you’ve earned in rewards and what those rewards are worth is not hard. Generally, 1% back means you will get 1 cent for every dollar you spend. Some cash back credit cards track earnings as points, but the conversion is straightforward: Usually, one point equals 1 cent.
Simple to redeem cash back rewards. Your card might require you to have a certain amount of cash rewards – say $25 – before you redeem them. But once you earn them, you can easily cash out.
Wide range of bonus categories. Some cards pay the highest cash back rate when you make particular purchases, such as 2% cash back on travel bookings or 6% cash back at U.S. supermarkets. With certain cards, bonus categories change throughout the year, giving you different opportunities to earn extra rewards. But keep in mind that many of these categories have dollar limits.
Sign-up bonuses. Cash back credit cards may offer sign-up bonuses ranging from $100 to several hundreds of dollars. You might also be able to get extra cash back by adding an authorized user to your account or referring new cardholders.
Cardholder benefits. These are not exclusive to cash back cards but often include special event access, zero liability fraud protection, extended warranty and purchase protection, rental car insurance, roadside dispatch service, and lost luggage reimbursement.
Sign-up bonus requirements. If you want to earn a sign-up bonus, then you will have to meet a spending requirement. The spending requirement varies by card but ranges from about $500 to a few thousand dollars, and you’ll usually have to accomplish this within three months of opening an account.
But don’t increase your spending just to get the sign-up bonus. If you can’t meet the requirements within the bounds of your normal spending habits, then maybe it isn’t the right cash back card for you.
Monitoring bonus categories. If you want to earn the most cash back using a card with rotating categories, you will need to take time and effort to track the categories and their cash back rates.
Potentially less-valuable rewards than other cards. Your cash back card’s point value may be locked in at a certain level, which means you won’t have a chance to receive more value. This is different from co-branded airline and hotel cards that sometimes allow you to redeem points at different rates.
Fewer perks. Other types of rewards credit cards, especially elite travel cards, could offer more perks than cash back cards. If travel deals and free checked bags appeal to you, then a travel credit card could be a better fit.
Fees. You might find that you’re spending more on annual fees than you’re earning in cash back rewards, depending on how you use a card. And if you think you might carry a balance, you could be better off with a plain lower-interest credit card. Carrying a balance with a rewards credit card can lead to credit card debt.
Can You Get Cash Back From a Credit Card?
A card can put money in your wallet in a couple of ways: if you use it to get an advance at an ATM or to earn cash back as you make purchases. If you’re not sure whether a cash back card is right for you or whether you’re likely to be approved, here is what you need to know.
Check your credit. You need a good to excellent credit score to qualify for the best cash back credit cards.
Review your monthly purchases. If you don’t already keep a budget, upload your purchase history from debit or credit card accounts into budgeting software and categorize the purchases. Some of these programs have snazzy graphics that can help you see where your dollars go. A card that offers the highest cash back earnings on grocery stores might be a good fit for you, for example, if you spend the most on groceries.
Make sure you can always pay off your balance. If you think you might carry balances, do not get rewards credit cards because they have higher annual percentage rates than other types of cards. You’re better off getting a low APR credit card to reduce the interest expense.
How Can You Pick the Best Cash Back Credit Cards?
You might feel overwhelmed as you try to pick the right cash back credit card. Follow these steps to make the process easier:
- Calculate your earning potential.
- Factor in sign-up bonuses.
- Subtract annual fees.
- Understand cardholder benefits.
Calculate Your Earning Potential
You can earn rewards at different rates depending on what type of cash back card you use, where you make purchases and whether a category bonus applies. Analyze your spending and then look for a credit card that earns bonus rewards in the categories where you spend the most.
Flat-rate cards: Generally, the rate is 1% to 2% for all purchases, although you may find a card promotion for a higher rate. A flat-rate card can be valuable if your spending is evenly spread across multiple categories or if you don’t want to track which credit card will earn the most for your purchases.
Bonus category cards: These credit cards offer different cash back rates on certain categories. Common bonus categories include travel, dining, gas, and grocery and department stores.
- 6% cash back on up to $6,000 spent annually at U.S. supermarkets and then 1% back thereafter
- 6% cash back on select U.S. streaming subscriptions
- 3% cash back for transit and U.S. gas station purchases
- 1% cash back on all other purchases
Note that this card refers to cash back as Reward Dollars. Issuers can call cash back by many names, so try not to let this confuse you.
Rotating bonus category cards: They typically have a 1% cash back base rate, along with bonus categories that may change quarterly. The rotating categories typically offer 5% cash back, one of the highest cash back rates you’ll get on a credit card. But the categories almost always have limits to how much you can earn each quarter.
Factor In Sign-Up Bonuses
Many cards attract applicants by offering sign-up bonuses. A cash back card with a large sign-up bonus can certainly help boost your earnings, but you’ll need to know the minimum spending requirement to receive it. If you can’t get the bonus without spending more than you normally would, then the card probably isn’t a good match for your wallet.
Some cash back credit cards charge an annual fee, and the average fee is less than $100, according to U.S. News research.
Consider whether the earnings or benefits of using a card will more than offset an annual fee. If they don’t, you likely will be better off with a no-fee card.
When an annual fee is waived the first year, you may be able to cancel the card or downgrade to a no-fee version at the end of the year and avoid paying the fee. You could also call the issuer and ask for a credit card retention offer, such as a statement credit or rewards to offset the fee.
Understand Cardholder Benefits
Many credit card issuers and card networks offer benefits beyond a rewards program. Benefits could include not only free credit score access but also extended warranties, concierge services, travel accident insurance policies, theft and fraud protections, and low-price guarantees.
Chase Sapphire Preferred Card users, for example, can get trip cancellation and interruption insurance, baggage delay insurance, and auto rental collision damage waiver coverage, among other benefits.
How Can You Make the Most of Cash Back Rewards?
Here is how you can reap more rewards without necessarily spending more on your cash back credit card:
Avoid carrying a balance. This is the No. 1 rule with any rewards credit card.
The No. 2 rule? If you start carrying a balance, then step away from your cash back credit card.
Revolving balances can lead to paying more in interest than you earn in cash back. But the worst part? You could end up with credit card debt.
Choose a card that matches your spending habits. A rewards card with bonus categories that align with your normal spending can help boost your cash back earnings.
Look for a sign-up bonus you can achieve. Sign-up bonuses can be a great way to earn a lot of cash back quickly, but don’t spend money you wouldn’t have otherwise.
Earn extra cash back. Some cards have referral programs and offer a bonus or extra cash back for referring new cardholders. You might also get extra cash back for adding authorized users.
Don’t forget about the card’s other benefits. Your cash back credit card might offer purchase protection, extended warranty coverage or other perks.
Get a retention offer. This is an incentive from your issuer to keep your card, and it could take some good old-fashioned negotiating. You might be able to get an annual fee waived or reduced, for example, but you will need to call the issuer and ask for it. The higher your credit score, the better your chance of success.