If you’ve been looking for a rewards card, you’ve more than likely come across something called a cash back credit card. This is the most basic type of rewards card, and if you know how to use cash back cards to your advantage, you can see fantastic rewards.
Scotia Momentum Visa Card
Scotia Momentum Visa Card
Purchase interest rate
Eligibility criteria, terms and conditions, fees and charges apply
Scotia Momentum Visa Card
Apply today and get an introductory balance transfer rate of 2.99% for the first 6 months – with a 0% balance transfer fee.
Purchase interest rate: 19.99%
Cash advance rate: 22.99%
Balance transfer rate: 2.99% for the first 6 months, 22.99% thereafter
*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
Cash back credit cards are a type of rewards credit card that pays cash rewards on purchases. With a cash back credit card, cash is rewarded as a percentage of each purchase made. If your cash back credit card paid 1% cash back on all purchases, for example, you would earn $1 for every $100 in credit card purchases you make.
Most providers will automatically send your cash back to you – either monthly or annually – by making a direct deposit into your bank account or by sending you a cheque in the mail. This means you can typically use your cash back however you please.
Types of cash back rewards programs
Cash back rewards programs are set up in three basic ways:
Flat rate rewards. With flat rate rewards, the credit card pays a flat percentage as a reward on all purchases. This kind of reward program is easy to understand and earning rewards is almost effortless.
Tiered rewards. This type of program pays different percentages of rewards on different categories of purchases. This type of rewards program will require a little more calculation and strategy in using your credit card if you want to earn the maximum amount of rewards.
Rotating categories. A rotating categories cash back credit card offers a higher reward rate for certain categories. With these cards, you may even be able to choose the spending categories yourself and change them monthly. Much like tiered rewards, you’ll need to analyze your spending and choose categories accordingly.
Is a cash back credit card right for you?
While the opportunity to earn cash back may sound appealing, cash back credit cards aren’t for everyone. A cash rewards credit card is ideal for you if you:
Pay your balance in full every month. Paying interest on a cash back credit card can add up quickly. Spending money on interest negates the rewards you’ve earned on your credit card.
Can responsibly use a credit card often. Earning the maximum amount of cash back rewards means using your credit card as frequently as possible. However, you should spend only what you can afford to pay back and to use your income to pay off your credit card balance rather than to make additional purchases.
Decide whether a cash back card is the right choice. A cash back credit card may be a good fit if you want rewards that are easy to redeem and you’re okay with not having top-of-the-line perks such as travel credits and elite status in loyalty programs. If you want a card with more features, consider a premium travel card.
Decide if you want to pay an annual fee. Cards with the highest cash back rates may have annual fees. However, you can find many excellent cash back cards with no annual fees. If you decide to pay this cost, consider whether you’ll earn enough rewards to cover what you pay.
Analyze your spending and find a rewards structure that fits. Think about what you typically spend on. If your spending is concentrated in certain categories, you might like a card that offers bonus rewards for those purchases. If you spend relatively evenly throughout many categories, a flat rate cash back card might fit the bill. This is a card that offers the same cash back rate on all purchases, no matter the category.
Look at other benefits. When you’ve narrowed your potential picks, look into other features such as signup bonuses, balance transfer offers and travel insurance coverage. You may be able to easily pick a winner among cards that are seemingly identical.
Reward expiration. Check the fine print to find out whether your cash back rewards will expire. Remember to use your rewards before they expire otherwise you lose out on all your hard earned cash.
Excluded purchases. Knowing the ins and outs of your rewards program can keep you from being surprised at your rewards earnings. Cash back is rewarded based on a merchant code and on the merchant’s business type, so some purchases with a merchant may not earn rewards the way you would assume. For example, books purchased at a warehouse store won’t count toward cash rewards for bookstore purchases.
Frequently asked questions
It depends on the card. Some providers set limits, while others don’t. If your card comes with unlimited cash back, be wary of any caps on welcome bonuses.
It depends on the provider. Some providers will directly deposit cash back into your account, while others may allow you to redeem your cash back for gift cards.
No, your cash back rewards don’t expire as long as your account remains open and in good standing. Any rewards not redeemed by account closing will be lost.
Kevin Joey Chen is a credit cards writer whose work and analysis have appeared on CNN, U.S. News & World Report, The Dallas Morning News, Lifehacker and CreditCards.com. He's passionate about helping you get your finances in order and expertly navigate the cutting-edge financial tools available -- including credit cards, apps and budgeting software.
How likely would you be to recommend finder to a friend or colleague?
Very UnlikelyExtremely Likely
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.