Cash-back credit cards provide a way for responsible cardholders to earn extra rewards while making regular purchases. They provide a percentage of your purchase back in the form of points, miles, or cash. If you already use a credit card for your expenses, consider switching to a cash-back card to maximize your rewards.
Some cash-back cards have special benefits and perks such as free trip cancellation insurance or VIP access to premier events.
My Picks: Top Cash-Back Credit Cards from Our Partners
There are dozens of cash-back cards on the market, but these are our winners right now based on several factors:
- Best for Welcome Bonus and Groceries: American Express ® Blue Cash Preferred
- Best for Dining and Entertainment: Capital One® SavorOne® Rewards
- Best for No Annual Fee: Chase Freedom Unlimited
- Best for Flat-Rate Cash Back: Capital One® Quicksilver® Cash Rewards
Best Card for Welcome Bonus and Groceries:
Blue Cash Preferred Card from American Express
High cash-back rates can make this card worth the annual fee for the right cardholder.
Intro Annual Fee
$0 introductory annual fee for one year, then $95
Earn 6% cash back on groceries (up to $6,000 in purchases) and streaming subscriptions such as Netflix, Spotify, and Disney+, 3% cash back on transportation, and 1% cash back on all other purchases.
$300 Statement Credit
Limited Time Offer: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Offer Expires 12/10/2020
Recommended Credit Score
Good to Excellent
I spend at least $6,000 a year on groceries, which means that alone would qualify for $195 in cash back with this card (6% cash back at grocery stores, not including Target or Walmart) in the first year of use. Add in another 6% cash back on streaming services (Netflix and Amazon Prime Video for me), plus the $300 statement credit welcome offer, and this card is easily worth the $95 annual fee. Note: the annual fee is waived for the first year.
The $95 annual fee, despite being waived for the first year, will still give some people pause before signing up. If you’re looking for a similar card but with no annual fee, check out the Amex Blue Cash EveryDay card. The cash back rates are slightly lower, but those are offset by the fact that there is no annual fee.
If you’re confident that your normal level of spending can earn rewards that outweigh the fee, this card is a great value. Once you sign up, I recommend switching any streaming services you have to this card right away so you can start earning 6% cash back. If you share grocery trips in your household, I would consider adding an authorized user to the card so you’re earning as much cash back as possible.
A Perfect Card for Grocery Shopping
This card provides 6% cash back on groceries (up to $6,000 in purchases) which is the most out of any other cash-back card. Large families should utilize this card for their grocery purchases. You can also earn 6% cash back on streaming services such as Netflix, Spotify, and Disney+. Cardholders will also earn 3% cash back on transportation including rideshare services, gas stations, trains, tolls, buses, and more.
Best Card for Dining and Entertainment:
Capital One® SavorOne® Rewards Credit Card
Earn unlimited 3% cash back on dining and entertainment and 2% at grocery stores
3% on dining and entertainment, 2% at grocery stores, 1% everything else. Grocery store category excludes Walmart and Target
One-time $200 cash bonus after spending $500 on purchases within the first 3 months from account opening
Recommended Credit Score
The spending categories that this card favors (dining and entertainment) are common categories for many people, including myself. Even though the 1% default cash back rate is lower than what you can find with most other flat-rate cards, the 3% and 2% categories will like bring many cardholders to an overall rate that is closer to 2% or more cash back.
No annual fee makes this card a great low-risk option to add to your wallet since there’s no need to calculate your break-even point. 0% intro APR for 15 months, no foreign transactions fees, and no balance transfer fees (but APR kicks in right away on balance transfers) are all favorable aspects of this card.
Don’t alter your spending just to take advantage of the higher cash back categories (3% dining and entertainment, 2% grocery stores excluding Walmart and Target). Either spend as normal and use this card for everything, or reserve this card only for the higher category purchases and use a different card with a higher rate for your other purchases.
A Top Pick for Dining and Entertainment Purchases
This card offers a competitive cash back rate for dining and entertainment spending, but it also packs a punch with a respectable 2% grocery store cash back rate. It’s strong enough to be used as a category-only card, but versatile enough to still be worth using as an everyday, all-purchases card.
Best Card for No Annual Fee:
Chase Freedom Unlimited
This card has a generous $200 welcome bonus and competitive cash back rates for different categories.
Earn a $200 bonus when you spend $500 in the first three months.
Recommended Credit Score
Good to Excellent
For a card with no annual fee, the Chase Freedom Unlimited card offers very competitive cash back rates. From my experience, many cards that offer cash back around this level come with at least a $95 annual fee.
And despite it being a card that favors certain spending categories like groceries, dining, and travel, the 1.5% cash back rate that you earn on all other purchases is on pace or ahead of many flat rate cards. So there is only upside to choosing a card like this.
The welcome bonus should be fairly easy to unlock for most new cardholders: earn $200 after spending $500 on purchases in the first 3 months from account opening.
For the first year, you can earn 5% cash back on grocery store purchases (not including Target or Walmart) for your first $12,000 spent. If you max that out, that’s $600 cash back in your first year just from grocery store spending.
You can also earn 5% on travel purchased through Chase Ultimate Rewards (I recommend considering the Chase Sapphire Preferred card if you are prioritizing travel rewards).
Here are the 3% cash back categories:
- Dining at restaurants, including takeout and eligible delivery services like Uber Eats
- Drugstore purchases
For all other purchases, you’ll earn 1.5% cash back.
This card is best suited for families with a large grocery budget, likely between $500-$1,000 per month. If you fall into that category, the Chase Freedom Unlimited’s 5% cash back offer on grocery store spending is where you’re really going put this card to work. If it makes sense for your situation, consider adding an authorized user if there is another big grocery shopper in your household so you can maximize your rewards.
Best Card for Flat-Rate Cash Back:
Capital One® Quicksilver® Cash Rewards Credit Card
A flat-rate card that pays 1.5% cash back on every single purchase.
Earn 1.5% on all purchases
Earn a one-time $200 bonus after you spend $500 on purchases within 3 months of opening your account.
Recommended Credit Score
Good to Excellent
I like how simple this card is. Since it’s a flat-rate card that offers 1.5% cash back on all purchases, there’s no need to worry about keeping track of different spending categories. I also like how easy the welcome offer is to unlock; you only need to spend $500 in the first 3 months to earn your $200 bonus. With no annual fee, the Capital One Quicksilver Card is a great card to have in your wallet for the long term.
The intro APY on purchases is 0% for the first 15 months, which, in my opinion, is a good thing and a bad thing. It’s nice to not have to worry about interest charges for the first 15 months, but this can also tempt someone to let a large balance to build up during that intro period. I still recommend paying off your balance in full every month whenever possible. Once the intro period is over, the regular APR jumps to 15.49%-25.49% (variable).
No annual fees or foreign transaction fees are a huge plus for this card.
This is a no-frills card, so the normal textbook advice is all you need here. Spend responsibly – as if the card were cash – and do your best to pay off your balance each month. Treat the 15-month 0% APR intro period as a test run to see if you can stay on top of paying your full balance. If you find yourself carrying over a balance from month-to-month during that intro period, make changes before the high interest charges kick in.
A Solid Flat-Rate Card for Everyday Purchases
If you are new to using cash-back credit cards and want something simple that still delivers a powerful punch, the Capital One Quicksilver Cash-Back Card deserves a spot in your wallet. A respectable 1.5% flat cash back rate along with a decent welcome offer and no annual fee make this a great card for those with good to excellent credit.
How Cash-Back Credit Cards Work
Cash-back credit cards are fairly straightforward. If the cash-back card says you’ll earn 3% back on your grocery purchases and you spend $200 at the grocery store, you’ll earn $6 in cash-back rewards. Cards may require that you have a certain amount of cash back before you can redeem the rewards, but others may have no minimum threshold.
There are different types of cash-back cards. Some will have a flat rate, such as 1% on all purchases. Others will provide a higher cash-back reward on certain categories, such as gas, groceries, dining, or travel.
Some cash-back credit cards have an annual fee, but many don’t. Many require a high credit score so if you have a recent bankruptcy or default, you likely won’t qualify.
Pros and Cons of Cash-Back Credit Cards
If you’re not sure if you want to replace your regular credit card with a cash-back one, here’s a brief overview of the pros and cons:
- Helps you earn money for purchases you already make
- Have other perks such as sign-up bonuses, rental car insurance, and no foreign transaction fees
- Rewards are often eligible to be redeemed as a statement credit, bank deposit, or converted into travel rewards
- Can often purchase merchandise with your cash-back rewards
- Can make people spend more because they know they’re getting cash-back
- May have an annual fee
- May be harder to be approved for than other credit cards
Types of Cash-Back Credit Cards
There are different types of cash-back cards that provide rewards in several unique ways. Here are the most common.
Many cash-back cards have a flat-rate system where you earn the same amount of cash back on all purchases, usually between 1-2%. This is easy for cardholders who don’t have the patience to remember which card is best for gas and which is best for groceries.
It’s common for cash-back cards to have a tiered system where certain categories earn more cash back than other categories. For example, users with the Chase Sapphire Preferred card earn 2% cash-back on travel and dining and 1% on all other purchases.
Sometimes, though, cards may have limits on how much you can earn in rewards for the highest percentage. For example, you may have a $1,500 limit on a certain category. After that, you’ll earn the lowest cash-back rate.
Some cards have special categories that earn extra cash-back during specific times of the year. Most of these are based on a quarterly system. For instance, in the first quarter of the year, you may earn 5% cash back on groceries but once that quarter is over, the special cash-back rate for groceries will be over.
Rotating categories can be helpful if you shop at a variety of retailers. But if you’re primarily using your card for groceries, then you’re better off focusing on a card that offers the most cash-back on grocery purchases.
Choose your categories
Some cards let you choose your bonus cash-back category from a predetermined list. This helps you customize your cash-back card so you’re earning rewards on places where you shop the most. These types of cash-back cards are less common but they do offer more flexibility than traditional cash-back cards.
Travel cash-back rewards cards often offer a sign-up bonus, usually in the form of points, that you can redeem for airfare, hotel stays, or rental cars. They usually have no foreign transaction fees, which can save you hundreds of dollars depending on how much you’re spending abroad.
The cash-back categories usually focus on travel-related purchases, so you’ll earn more points every time you take a trip. These cards may be tied to a specific airline or hotel chain or provide points and miles for a variety of companies.
How to Choose a Cash-Back Credit Card
When trying to decide which cash-back card is best for you, there are a few steps you can follow to make the best choice:
- Go through your expenses and figure out what category you spend the most money on
- Look up your credit score for free through a site like Credit Karma
- Based on your credit score and spending habits, find a card you’re eligible for that fits your needs
- Apply and wait to hear back
- If there are multiple cards you’re interested in, it may be better to space out applications instead of applying all at once
- Compare cards side by side, analyzing which has the best cash-back rate, lowest annual fee, and other perks. A card with an annual fee and no foreign transaction fees may be a better fit than one that charges 3% for foreign transactions.
If you’re still unsure, check out credit card comparison sites or ask friends and family which ones they use. You might find out that the one you preferred isn’t very good at all, and one you hadn’t thought about is best.
How to Maximize Your Cash-Back Credit Card Rewards
You’re allowed to use several cash-back cards at one time and doing so can help you earn more rewards.
For example, you can have one cash-back card that offers 2% on all purchases and one that offers 5% cash back on groceries. You can remember to use the second card at the grocery store and the first card on everything else. Some people keep a note in their wallet to remind them which card is good for which type of store.
Some cards have no foreign transaction fees and offer more cash back on travel. Take that card with you if you go abroad.
Some consumers want to minimize their credit exposure and only have one credit card. If that’s your preference, then pick the card that offers the most perks for the lowest annual fee.
And to make sure you consistently have the best card, periodically take a look to see if there are any new credit cards that fit your lifestyle and needs better.
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