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If you’ve been looking for a rewards card, you’ve more than likely come across something called a cashback credit card. This is the most basic type of rewards card, easier to track points than travel rewards cards. And if you know how to use cashback cards to your advantage, you can see fantastic rewards.
Our pick for a cashback credit card
HSBC Cash Rewards Mastercard® credit cardRead more
Compare cashback credit cards
What are cashback credit cards?
With a cashback credit card, your card provider pays you back a small portion of what you spend. You can redeem your cash back as statement credit or deposits into your bank account.
How do cashback cards work?
A cashback card pays you a percentage of your spending. For example, if it offers 1% cash back, you’ll receive $1 in rewards for every $100 you spend.
Despite its name, the card won’t pay you with physical cash. Rather, you’ll redeem your rewards for things of monetary value. These might include:
- Statement credit.
- Deposits into your bank account.
- Travel rewards — hotels, airfare, car rentals, etc.
- Gift cards.
- Charitable donations.
Your card provider may redeem cash back for you automatically, typically applying it to your account as statement credit. Some providers require you to have a minimum amount of cash back before you can redeem — often $25 or more.
Highest cashback credit cards for every type of purchase
If you want to earn strong cash back for spending in categories you use most, check out these products offering top cashback rates for general purchases, gas, groceries, dining and travel.
We made our top cashback credit card picks based on a variety of factors, including cashback earning categories, cashback earned per dollar spent, annual fees, introductory APRs, cachback spending limits, overall flexibility and other benefits or perks a consumer might consider when selecting a cashback card. The cards below stood out compared to the competition in one or several of these categories, earning a spot on our best cashback credit card list.
Best for flat-rate cash back
Alliant Cashback Visa® Signature Credit Card: 3% cash back on all purchases for the first card year; 2.5% cash back thereafter.
This is the highest flat-rate cash back on the market. Look out for the $99 annual fee starting the second year, which will eat into your rewards. This card is best if you spend more than $11,800 a year on purchases; otherwise, you might earn better rewards from the Citi® Double Cash Card.
Citi® Double Cash Card: 1% cash back on all purchases and another 1% back as you pay them off.
This card is a mainstay in the flat-rate cashback category. It offers excellent cash back as long as you consistently pay off your purchases.
Best cash back for gas
Fort Knox VISA® Platinum Card: 5% cashback on gas.
Earn 1% cash back on all retail purchases. However, you’ll need to join the Fort Knox Federal Credit Union to apply. If you don’t meet the eligibility requirements, you can qualify by joining the American Consumer Council of Kentucky for $5.
Sam's Club® Business Mastercard®: 5% cash back on the first $6,000 per year in gas purchases, then 1%.
The card also offers a great 3% cash back on dining and travel and 1% on other eligible purchases. To apply, you’ll need a Sam’s Club membership, which costs $45 a year.
Best cash back for groceries
Blue Cash Preferred® Card from American Express: 6% cash back at US supermarkets on up to $6,000 in purchases annually, then 1%.
This card is best if you spend a little under $500 a month at US supermarkets. You’ll also earn a great 6% cash back on select US streaming subscriptions, as well as a strong 3% cash back at US gas stations and 3% cash back on transit such as rideshare and parking. Earn 1% back on other eligible purchases.
Best cash back for dining
Uber Visa Card: 4% cash back on dining.
The card also offers 3% back on hotel and airfare purchases, 2% on online and Uber purchases and 1% back on everything else.
Capital One® Savor® Cash Rewards Credit Card: 4% cash back on dining and entertainment.
You’ll also earn 2% at grocery stores and 1% on all other purchases. The key difference from the Uber Visa Card is its elevated rewards at grocery stores — an everyday category. Watch out for the Capital One® Savor® Cash Rewards Credit Card annual fee, which is $95 starting the second year.
Best cash back for travel
Uber Visa Card: 3% back on hotel and airfare.
This is a strong cashback rate for travel, especially for a no-annual-fee card. To compare, the fan-favorite Chase Sapphire Preferred® Card has a $95 annual fee.
AAA Member Rewards Visa Signature® Card: 3% cash back on eligible AAA and travel purchases.
You’ll also earn 2% cash back on gas, groceries and drugstore purchases. Earn 1% cash back on all other types of purchases. You must be a member of AAA to apply for this card.
How we selected our top cards
When choosing our cashback picks, we looked at a few features, including cashback rate, cashback limitations, earning categories and any other perks that a consumer might find appealing in a cashback card. Those cards that outperformed the others in a given category were chosen for our list.
What’s changed in 2019
The cards on our list have kept their positions for 2019 thanks to their raw earning power. You won’t currently find many cards that offer the cashback potential these cards provide.
Types of cashback cards
There are three types of cashback cards: flat-rate, tiered and rotating-bonus-category.
Flat-rate cashback cards
You’ll receive the same rewards rate on all purchases, regardless of category.
Instead of a signup bonus, the Chase Freedom Unlimited® lets you earn 3% cash back on all purchases up to $20,000 for the first year. After that, your cashback rate reverts to 1.5%.
So, if you max out the $20,000 on the card, you’ll earn $20,000 x 3% = $600 cash back for the first year. From the second year, spending $20,000 would earn you $300 back.
You’ll receive a different rewards rate for different categories.
The Bank of America® Cash Rewards credit card offers:
- 3% cash back on a category you choose.
- 2% cash back at grocery stores and wholesale clubs.
- 1% cash back on everything else.
The 3% and 2% cash back applies to the first $2,500 in combined purchases each quarter. After you hit the spending cap, you’ll earn 1% back in these categories for the rest of the quarter.
The Bank of America® Cash Rewards credit card heavily rewards certain types of spending
Notice the different cash back you’ll earn for spending in different categories:
|Category of your choice||$4,000||3%||$120|
|Groceries and wholesale-club purchases||$4,000||2%||$80|
|All other purchases||$4,000||1%||$40|
Rotating-bonus-category cashback cards
You’ll receive a higher rewards rate for certain categories during certain months. Bonus categories usually rotate quarterly, and you typically have to sign up for the category each quarter.
Discover it® Cash Back is one of the top rotating-bonus-category cashback cards. It offers:
- 5% cash back in rotating categories that need to be activated each quarter, with cash back typically offered on the first $1,500 in purchases a quarter, then 1%.
- 1% cash back on all other purchases.
Rotating categories often include gas, groceries, restaurants and wholesale-club purchases.
The Chase Freedom® credit card is another great product in this category, with very similar reward terms. But it could be hard to keep track of your categories to make the most of these cards.
Is a cashback rewards credit card right for me?
While the opportunity to earn cash back may sound appealing, cash back credit cards aren’t for everyone. Based on what you spend the most money at — groceries, gas, travel purchases, flights — you can choose between a cashback, a points or a miles card.
A cash rewards credit card is ideal for you if you:
- Use your card for everyday spending. Depending on the card you get, spending money on groceries, gas, dining or purchases at department stores usually tend to have the highest cash back.
- Want to pay a low annual fee or no annual fee at all. Cashback credit cards have either no annual fee or an annual fee of up to $95.
- Want an intro APR period. With this type of card, you’ll often enjoy an intro APR period on either balance transfers or purchases, or sometimes even both.
- Pay your balance in full every month. Paying interest on a cash back credit card, or any rewards credit card, is one of the worst mistakes you can make. Spending money on interest negates the rewards you’ve earned on your credit card.
- Frequently use your credit card responsibly. Earning the maximum amount of cash back rewards means using your credit card as frequently as possible. You must be disciplined enough to 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.
Cash back vs. points vs. miles: Which one should I pick?
Cash back is a great choice if you want simple rewards. A card’s cashback percentage makes it easy to gauge the rewards you’ll earn.
Points and miles can be a bit trickier, though they can also be more powerful. For example, a card with 2x points on travel isn’t necessarily offering a 2% rewards rate.
In the case of the Chase Sapphire Preferred® Card, points are worth 25% more when you redeem them through Chase Ultimate Rewards. That gives you up to a 2.5% rewards rate on travel.
Ultimately, points and miles are best if you want to use your rewards for travel — and you have the patience to maximize your rewards.
How to compare cashback cards
As you compare credit cards, certain features may stand out to you. Here’s what to look for as you find your next cashback card.
- Annual fee. If you choose a card with an annual fee, make sure you can earn enough rewards within a year to offset the fee.
- How much cash back will you earn? While flat-rate cards are easiest to understand, you may earn more rewards through a tiered-cashback or rotating-bonus-category cashback card. Choose a card that pays the most cash back for the categories you spend most in.
- Signup bonus. Cashback cards commonly offer signup bonuses to new cardholders. If a card has a bonus, consider whether you can meet the spending requirement in time.
- Earning or spending caps. Some cashback cards cap the amount of rewards you can earn. The maximum may apply to certain categories over certain periods of time — for example, $1,500 in gas and grocery purchases each quarter. Or it may apply over a year — for example, $100,000 in purchases each year.
- Reward restrictions. Check if the provider sets a minimum of cash back you must have to redeem. Also, look through the card’s terms to see if your rewards expire.
- APR. Interest rates tend to be higher for cards with rewards than cards without. With a cashback card, pay your balance in full each month to maximize your rewards. If there’s a chance you will carry a balance, consider a card with a lower interest rate.
How to maximize your rewards
- Spend enough to earn the signup bonus. You may need to make purchases more aggressively to reach the spending requirement by the bonus’s expiration date. The clock starts ticking the day you open your account, which may be a few days before you receive your card in the mail. If your credit limit isn’t high enough, you may have to pay off your balance a few times to make room for additional spending.
- Sign up for special categories in advance. If you choose a rotating-bonus-category cashback card, you may need to activate your categories before you earn elevated rewards.
- Spend more in categories that earn more rewards. If you won’t earn elevated rewards for certain purchases, consider using a different card.
- Pay your balance in full each month. Paying interest on a cashback credit card eats into your rewards. Also, avoid late fees by setting up automatic payments.
- Use your credit card for purchases only. Cash advances and balance transfers don’t earn rewards. In addition, they usually start accruing interest immediately.
Ask the experts
- Andy Shuman
- Travel and Personal Finance
How do you get the most rewards out of a cashback credit card?
Cashback cards, on the other hand, are easy to figure out. The issuers use very simple terms, like percentage (1%, 1.5%, 2% or more) or 1x, 1.5x, 2x et cetera. So if you charge $100 on a 1% or 1x card, you know you’re getting $1 cash back. No surprises.
So to get the most rewards out of a cashback credit card, you need to choose the card with a higher payoff. One percent cards are not exciting anymore, so you’ll want to look at cards with at least 2%, and sometimes you can even get a 3% (or 3x) card, although the latter tend to have a limited time term or an annual fee.
There is a subset of cashback credit cards that offer quarterly 5% category bonuses. They are slightly more complicated than fixed-rate cashback cards, but they can be very rewarding if you’re willing to delay your purchases until the 5% category you want is up. However, if your goal is absolute simplicity and you don’t want to remember which card to use for what purchases, just use a fixed-rate cashback credit card for the peace of mind.
- Tim and Amy Rutherford
- Award Travel Professionals
Is there anything you should avoid when choosing a cashback card?
- Eric Rosenberg
- Personal Finance Expert
Should I get a cashback card with tiered rewards or a flat rate for all purchases?
Cashback cards are typically pretty easy to understand. At the same time, they can offer attractive rewards.
Consider your spending to figure out which kind of card might reward you most. Then, compare your cashback options to find the best product for you.
Frequently asked questions
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