Cash back credit cards are a valuable way to earn extra cash for your purchases when you use your credit card. You usually can’t go wrong with this type of card as they are generally easy to understand, easy to compare, and result in cold hard cash that you can spend as you like.
In order to get the most from your cash back credit card, however, it’s crucial that you select one that offers the maximum cash back on the purchases you frequently make, whether it’s gas, travel, restaurants, or groceries.
Some of the different cash back credit cards award purchases in rotating quarterly categories. Although these cards often award as much as 5% cash back or more in those categories, you might find it difficult keeping up with those categories. Plus, if you aren’t able to remember to sign-up for the special categories each quarter, you will end up only earning 1%, or the default awards rate for all your purchases. These rewards programs also usually have maximum caps which can limit how much you earn. In these types of situations, it’s best to consider a card that awards a flat rate of rewards for all your purchases instead.
Whether you’re considering a cash back credit card for your everyday purchases, a flat rate rewards card, or one with rotating categories, you’ll likely find one that works for your situation. These are our recommendations for the best cash back credit card offers.
The cards that award the highest rate of cash back are those with rewards of 5% and 6%. To get the highest amount of cash back for your purchases, these are the cards you should use.
$95 annual fee
up to 3-6% cash back
$150 intro bonus
Although this card has an annual fee of $95, it awards 6% cash back from U.S. supermarket purchases up to $6,000 annually, which is one of the highest rates of cash back awarded by any cash back credit card. You also earn 3% cash back at U.S. gas stations and U.S. department stores and 1% cash back on all other purchases. New cardholders can earn a bonus of $150 after spending $1,000 in purchase in the first three months of opening the account, which is applied as a statement credit. The annual fee is typically $95, but if your application is received by 8/3/2016, the annual fee is only $75. There is a 0% introductory APR on purchases and balance transfers for 12 months. Then, the APR will be 13.24% - 23.24%.
no annual fee
0% intro APR
5% cash back on quarterly categories
$100 intro bonus
This card awards 5% cash back on rotating categories that change each quarter and 1% cash back on all other purchases. New cardholders can earn a bonus of $150 after you spend $500 on purchases within the first three months of opening an account. You can earn an additional $25 if you add a first authorized user and make a purchase within the first three months as well. This card offers a 0% intro APR on purchases and balance transfers for the first 15 billing cycles before a variable APR of 13.24%-23.24% is applied, with no annual fee.
For balance transfers, you can’t beat the Discover it credit card, which also awards 5% cash back on rotating quarterly categories up to $1,500 per quarter, and 1% cash back on all other purchases. There is a 0% introductory APR on balance transfers for 18 months and six months for purchases. After that, an APR of 11.24%-23.24% will apply. For new cardholders, Discover will also match the cash back you earn in your first year, at the end of the year.
Another great card is a new Costco Anywhere with its 4% cash back on gas (with $7,000 annual limit), 3% on travel and restaurants, and 2% on Costco purchases. This card is a perfect earner for typical household purchases.
Not all cash back credit cards charge annual fees. Although these cards offer lower rates of rewards, they also do not carry an annual fee, which can end up being more beneficial to you, depending on your spending habits. Our picks for the best no-annual fee cash back cards include the following options:
no annual fee
up to 2-3% cash back
Amazon Prime membership free
This card has no annual fee and awards 3% cash back at U.S. supermarkets up to $6,000 per year, 2% cash back at U.S. gas stations and select U.S. department stores, and 1% cash back on supermarket purchases after you reach the cap and for all other purchases. New cardholders earn a $100 statement credit after spending $1,000 with the card in the first three months. This card also offers a 0% intro APR on purchases and balance transfers for 12 months and then the APR will be 13.24% - 23.24%.
no annual fee
5% on 2 categories you choose quarterly
2% on 1 category you choose quarterly
This card from U.S. Bank awards 5% cash back for purchases made in two categories that you choose each quarter up to $2,000 in combined purchases, and 2% cash back on purchases in one everyday category like gas or groceries each quarter. You also get 1% cash back on all other purchases. There is a 0% intro APR on balance transfers made within the first 30 days for nine billing cycles. After that, a variable APR of 13.24% - 24.24% will apply. There is no annual fee for this card.
If the quarterly rotating categories of the Discover it card are not for you, the Discover it chrome awards 2% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter, and 1% cash back on all other purchases. Discover will match the cash back you earn your first year as a cardholder, at the end of the year. You also get 0% intro APR on balance transfers and purchases for 12 months.
If you just don’t like having to remember to sign up for quarterly categories or your spending varies, and you don’t want to keep track of the type of purchase you make each time, you should consider a flat-rate rewards card to earn the most cash back. Our recommendations for the best flat-rate cash back cards are as follows:
This card awards a flat-rate of 1.5% cash back on all your purchases. New cardholders can also earn a cash bonus of $100 if you spend $500 with your card in the first three months. There is also a 0% intro APR on balance transfers and purchases for nine months. After that, the APR will be 23.24%. The annual fee is $39.
This card is among one of the newer options and has no annual fee. It awards a flat rate of 1.5% cash back for all purchases plus a 5% redemption bonus. As a new cardholder, you can earn a bonus of $100 after you spend $500 in purchases in the first 90 days of opening the account. There is a 0% introductory APR on purchases and balance transfers made within the first 45 days, for 12 months and then an APR of 15.245 – 23.24%.
This card awards 1% cash back when you make your purchase and then another 1% cash back when your purchase is paid. You can earn the cash back with this card without managing specific purchase categories or limitations. There is an intro APR of 0% on balance transfers made from the date of the first transfer within four months of opening the account for 18 months. Then a variable APR of 13.24% - 23.24% will apply.
There are a couple of tips you should keep in mind to get the most value from your cash back credit cards, no matter which one you select. Furthermore, it is important to recognize the drawbacks and limitations so you can earn the most cash back possible with your card.
It can be overwhelming trying to figure out exactly which categories you should focus on when selecting a cash back card. Everyone has their own individual spending habits, but sometimes we underestimate important spending opportunities and overestimate others. According to the Bureau of Labor statistics, typical consumer spending behavior is as follows:
If these numbers look like similar to your own spending habits, it’s probably best that you consider a cash back card that awards grocery purchase and dining out. Because of the declining oil prices, gas spending is predicted to decrease even more in the coming years. Although you might think you spend the most on gas and can earn the most rewards on these purchases, it could turn out that you spend and earn less than you would on groceries or other everyday purchases.