A cash back credit card is one of the easiest way to earn rewards. They’re a useful tool to get paid for the things you’re already buying everyday.
Sounds like a good deal, right?
Well it is! It’s just a matter of identifying which is the right card for you and making sure your application is approved.
So, let’s look at some of the factors you should consider when selecting the best cash back credit card. Then, we’ll introduce you to the 7 best cash back credit cards so you can make a decision.
We’re going to cover:
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What Is A Cash Back Credit Card?
Cash back credit cards are pretty simple. You’ll earn cash back on your card when you use it to make purchases.
It’s a great way to get some money back on things you’d be purchasing anyway.
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How Cash Back Credit Cards Work
There’s 3 different kinds of cash back cards:
- Flat Rate Cards
- Bonus Category Cards
- Rotating Bonus Cards
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Flat Rate Cards
A card with a flat rate means you’ll receive the same cash back rate, regardless of where you’re making your purchases.
These rates are usually between 1-2%. However, you may be able to find a card that will offer a higher cash back percentage.
This type of card is a great option for people who spend evenly across all categories.
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Bonus Category Cards
This type of card will reward you when you use the card for purchases relating to the introductory offer.
Let’s say that you spend hundreds of dollars each month on groceries. You’ll want to look for a card with an intro offer like:
Earn $150 when you purchase $500 in grocery stores within the first 3 months of opening the card.
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Rotating Bonus Cards
Cards with a rotating bonus will offer these on a quarterly basis, and the category that it applies to will vary.
These cards typically come with a 1% cash back base rate. However, some categories of spending may offer up to 5% cash back. Make sure you check if there’s a limit on how much you can earn each quarter.
You’ll usually be notified a few months in advance of the next category eligible for bonus rewards.
So, what areas should you expect to save extra money in?
- Department stores
- Supermarkets
- Gas stations
- Traveling
- Restaurants
If you spend hundreds in any of these categories, it’s probably a good idea to apply for one of these cards.
The next upcoming category is chosen strategically. For example, it’s more likely that you’ll be rewarded for shopping in a department store during the winter because of holiday shopping.
Let’s say that you spend $1,000 a month and you secure a card with a cash back rate of 5%.
This means that you will be earning $50 back a month on your everyday purchases.
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Pros and Cons of a Cash Back Credit Cards
Pros
- Easy to understand and track rewards.
- Redeeming your cash back reward is very easy.
- You may get additional cash back when you get a card that offers a sign up bonus. In some cases, these bonuses could be worth hundreds of dollars.
- Cardholder benefits might offer you options of insurance coverage that could come very handy to you, without any additional cost.
Cons
- Most cash back credit cards have a credit requirement of a FICO score of 670 and above.
- Some sign up bonuses will require you spend thousands of dollars before you actually receive your bonus money. And in some cases, there’s a time frame in which you must complete the signup offer. That means you might have to spend thousands of dollars in the first 30-90 days of having the card just to qualify for the bonus.
- Depending on how often you use the card, you might find that you’re spending more on annual fees than you are earning in cash back rewards.
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Is a Cash Back Rewards Card Right for You?
There are certain things need to know about these cash back credit cards before you go ahead and apply for one.
- Your credit needs to be in the range of good to excellent in order to qualify for the best cash back credit cards. If your credit is not in that range, you may want to reconsider applying right now as the inquiry will lower your score. Spend the time to raise your credit score, before you submit the application.
- Certain cards give you cash back for purchases made within a specific category like gas stations, supermarkets, traveling, or dining. It’s important to determine which card has the right benefits based on your spending habits.
- Many reward credit cards come with a high APR. If you will not be able to pay your balance in full every month, you should consider applying for a card with a lower APR as the interest will continue to accumulate every month otherwise.
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How To Make The Most Of Your Cash Back Card
- Avoid carrying a balance on your card as it can lead to interest payments higher than your cash back rewards.
- Choose a card with offers that match your spending habits. This will boost your cash back rewards.
- Look for a signup bonus promotion that doesn’t not require you to spend money.
- Earn extra cash back by looking into the additional benefits of the card. Sometimes you can get money just for referring your family and friends.
- Did you signup for a card with an annual fee that was waived for the first year? Call them close to your anniversary date and ask about any retention offers. It’s worth the shot to see if you can get a second year of annual fees waived.
- Are you looking to a card that offers rewards in the form of miles and points? If you are, check to see if redeeming the points for cash will diminish the value.
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7 Best Cash Back Credit Cards
Flat Rate Options
- Introductory APR: 0% APR on Purchases and Balance Transfers for 15 months
- Ongoing APR: 14.74% – 24.74% Variable APR
- No Annual Fee
- Signup Offer: Earn $150 cash bonus after you spend $500 on purchases within the first 3 months from opening the account
- Credit Requirement: Good – Excellent
- Earn unlimited 1.5% cash back on every purchase, every day
- Cash back will not expire for the life of the account
- No limit to how much you can earn
- Introductory APR: 0% Intro APR on Balance Transfers for 18 months
- Ongoing APR: 15.49% – 25.49% Variable APR
- No Annual Fee
- Credit Requirement: Good – Excellent
- Earn 2% cash back on purchases (1% when you buy and 1% as you pay)
- Balance transfers are not eligible to earn cash back
- Introductory APR: 0% Intro APR on Purchases and Balance Transfers for 15 months
- Ongoing APR: 16.99% – 25.74% Variable APR
- No Annual Fee
- Signup Offer: Earn $150 cash bonus after you spend $500 on purchases within the first 3 months from opening the account
- Credit Requirement: Good – Excellent
- Earn a 1.5% back on all of your purchases
Bonus Category Options
- Introductory APR: 0% Intro APR on purchases and balance transfers for 12 months
- Ongoing APR: 15.99% – 26.99% Variable APR
- No Annual Fee
- Signup Offer: Earn a $200 cash reward bonus after spending $1,000 in the first 3 months of opening the account.
- Credit Requirement: Good – Excellent
- Earn unlimited 1.5% cash rewards on purchases
- Earn 1.8% cash rewards on qualified mobile wallet purchases during the first year of opening the account.
- Ongoing APR: 13.74% – 25.74% Variable APR
- Annual Fee: $0 for first year, then it will be $95 yearly
- Signup Offer: Earn $500 cash back bonus after you spend $3000 on purchases in the first 3 months of opening the account.
- Credit Requirement: Good – Excellent
- Earn an unlimited 4% back on all of your dining and entertainment purchases
- Unlimited 2% back on Supermarkets
- Earn 1% back on all other purchases
Rotating Options
- Introductory APR: 0% Intro APR on purchases and balance transfers for 14 months
- Ongoing APR: 13.99% – 24.99% Variable APR
- No Annual Fee
- Signup Offer: Earn a $200 cash reward bonus after spending $1,000 in the first 3 months of opening the account.
- Credit Requirement: Good – Excellent
- They will match all the cash back you’ve earned at the end of the first year, automatically
- No limit to how much is matched
- Earn 5% cash back at different places each quarter
- Supermarkets
- Restaurants
- Gas stations
- Amazon.com and many other places
- Earn unlimited 1% cash back on all other purchases, automatically.
- Introductory APR: 0% Intro APR on purchases and balance transfers for 15 months
- Ongoing APR: 16.99% – 25.74% variable APR
- No Annual Fee
- Signup Offer: Earn a $150 Bonus after you spend $500 on purchases in the first 3 months of opening the account
- Credit Requirement: Good – Excellent
- Earn 5% cash back at different places each quarter
- Unlimited 1% cash back on all other purchases automatically
- Cash back rewards do not expire as long as account is open
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Conclusion
We’ve given you all the stats on the 7 best cash back credit cards on the market. However, there are a ton of options out there.
The bottom line is that it’s up to you to pick the best cash back credit card for you and your personal situation. Take the time to look through your options, and find a card with rewards that suit your lifestyle.
Which reward would entice you to apply for a card? Let us know in the comments!
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