Cash back credit cards offer a great way to earn money back on your purchases. By choosing the right card, you can earn cash back on everything from groceries to travel to gas. But with so many options available, it can be challenging to know which card to choose. That’s where we come in. In this article, we’ll take a closer look at the best cash back credit cards on the market, how to choose the right card, and how to maximize your rewards.
At their core, cash back credit cards work by giving you a percentage of your transaction back as cash. For example, a card may offer 3% cash back on dining and entertainment, 2% cash back on grocery purchases, and 1% cash back on everything else. By using your credit card for these purchases, you can earn money back on every transaction.
One of the benefits of using cash back credit cards is the ability to maximize your rewards. By strategically choosing where to use your card, you can earn even more cash back. For example, if you have a card that offers 5% cash back on rotating categories, you can make sure to use that card for purchases in those categories to earn more rewards.
Key Takeaways:
- Cash back credit cards allow you to earn money back on your purchases
- Choosing the right card and using it strategically can help you maximize your rewards
- Consider factors such as cash back rates, annual fees, and redemption options when selecting a card
- There are different types of cash back credit cards, including flat-rate, tiered, and rotating category cards
- Keep in mind additional considerations such as credit score requirements and foreign transaction fees
Finding the Best Cash Back Credit Cards
When it comes to finding the best cash back credit cards, it’s important to consider several factors to maximize your rewards. In this section, we will outline what to look for when selecting the top cash back credit cards that align with your financial goals. The best credit cards for cash back offer a balance of high cash back rates, low or no annual fees, generous sign-up bonuses, and flexible redemption options.
Let’s dive into the key criteria for selecting top cash back credit cards:
Criteria | Description |
---|---|
Cash back rates | Consider the cash back percentage on purchases. Some cards may offer higher rates on specific categories such as gas, groceries, or dining. |
Annual fees | If you’re looking for the highest cash back credit cards with no annual fees, look for cards that don’t charge a fee to use the card. |
Sign-up bonuses | Top cash back credit cards offer attractive sign-up bonuses that provide an easy way to earn substantial cash back rewards upon card activation. |
Redemption options | The best credit cards for cash back offer flexible redemption options, such as statement credit, bank deposit, or gift cards, to suit your spending needs. |
Now that you understand the criteria for selecting the best cash back credit cards, let’s review the top options available in the market:
Highest Cash Back Credit Cards
Discover it Cash Back is one of the highest cash back credit cards, offering 5% cash back on up to $1,500 spent in rotating quarterly categories (activation required) and 1% on all other purchases. There’s no annual fee, and you can redeem your cash back rewards for statement credit, bank deposit, or gift cards.
Another option is the Blue Cash Preferred® Card from American Express, which offers 6% cash back on up to $6,000 spent annually at U.S. supermarkets, 6% back on select U.S. streaming subscriptions, 3% back at U.S. gas stations and on transit, and 1% back on all other purchases. However, this card has a $95 annual fee.
Best Credit Cards for Cash Back Rewards
If you’re looking for the best credit cards for cash back rewards, consider the Citi® Double Cash Card, which offers 2% cash back on all purchases — 1% when you buy and 1% as you pay for those purchases. There’s no annual fee, and you can redeem your cash back rewards for statement credit, check, or gift cards.
When selecting the top cash back credit cards, it’s important to evaluate the features and benefits to determine which card aligns best with your spending habits and financial goals. The highest cash back credit cards may come with annual fees, while others may not have as high of a cash back percentage. By understanding the criteria and reviewing the top options, you’ll be on your way to maximizing your cash back rewards.
Comparing Cash Back Options
Choosing the right cash back credit card can save you a substantial amount of money over time. There are three main types of cash back credit cards: flat-rate cash back, tiered cash back, and rotating category cash back.
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Flat-rate cash back credit cards typically offer a single cash back rate on all purchases. This type of card is best suited for those who prefer simplicity and consistency in their rewards program. Tiered cash back credit cards, on the other hand, offer different cash back rates on different categories of spending, such as groceries, gas, and dining. This type of card is ideal for those who want to maximize their rewards on specific spending categories.
Rotating category cash back credit cards offer higher cash back rates on a rotating series of categories that change every quarter or year. These categories may include popular spending categories like gas, dining, and entertainment. While this type of card can potentially offer high rewards, it requires you to keep track of rotating categories and to activate them in time.
Flat-Rate Cash Back Credit Cards
Card Name | Earn Rate | Annual Fee |
---|---|---|
Citi® Double Cash Card | 2% cash back – 1% when you make a purchase and 1% when you pay it off | $0 |
Chase Freedom Unlimited® | 1.5% cash back | $0 |
Capital One Quicksilver Cash Rewards Credit Card | 1.5% cash back | $0 |
Tiered Cash Back Credit Cards
Card Name | Earn Rate | Annual Fee | Category Caps |
---|---|---|---|
Blue Cash Preferred® Card from American Express | 6% cash back on purchases at U.S. supermarkets (up to $6,000 per year), 6% cash back on select U.S. streaming subscriptions, 3% cash back on transit (including ride-sharing, taxis, tolls, and more), 3% cash back on eligible gas stations | $95 | Caps at $6,000 for U.S. supermarkets purchases |
Bank of America® Cash Rewards credit card | 3% cash back on one chosen category (gas, online shopping, dining, travel, drug stores or home improvement/furnishings), 2% cash back at grocery stores and wholesale clubs, 1% cash back on all other purchases | $0 | None |
Wells Fargo Propel American Express® Card | 3% cash back on eligible dining, transportation, and travel expenses, 1% cash back on all other purchases | $0 | None |
Rotating Category Cash Back Credit Cards
Card Name | Earn Rate | Annual Fee | Category Caps |
---|---|---|---|
Chase Freedom Flex℠ | 5% cash back on rotating quarterly categories (up to $1,500 in combined purchases), 5% cash back on travel purchased through Chase Ultimate Rewards, 3% cash back on dining and drugstore purchases, 1% cash back on all other purchases | $0 | $1,500 quarterly cap on rotating categories |
Discover it® Cash Back | 5% cash back on rotating quarterly categories (up to $1,500 in combined purchases after activation), 1% cash back on all other purchases | $0 | $1,500 quarterly cap on rotating categories |
U.S. Bank Cash+™ Visa Signature® Card | 5% cash back on two chosen categories (up to $2,000 combined quarterly limit), 2% cash back on one everyday category (gas stations, grocery stores or restaurants), 1% cash back on all other purchases | $0 | $2,000 combined quarterly limit for 5% cash back categories |
Now that you understand the differences between cash back credit cards, you can make an informed choice based on your spending habits and preferences.
Maximizing Rewards and Bonuses
Using a cash back credit card can be a powerful tool for earning rewards, but to truly maximize your benefits, it’s important to use your card strategically. Here are some tips for getting the most out of your cash back credit card:
- Choose the right card: Look for top cash back credit cards with bonus offers and high reward rates in categories where you frequently spend.
- Optimize your spending: Make sure to use your card for all eligible purchases and consider paying bills and expenses with your credit card to earn cash back on basic necessities.
- Track your rewards: Keep track of your cash back earnings and redemption options to ensure you are utilizing all of your benefits.
Additionally, many cash back credit cards offer bonus rewards for sign-up and spending thresholds. For example, the Citi® Double Cash Card currently offers a $200 cash back bonus when you spend $500 in the first three months. The Chase Freedom Flex offers a $200 bonus when you spend $500 on purchases in the first three months.
Don’t miss out on limited-time promotions or exclusive offers from top cash back credit cards in 2021. Keep an eye out for these deals and take advantage of them whenever possible.
To help you select the best cash back credit cards with bonus offers, check out the following table:
Top Cash Back Credit Cards with Bonus Offers
Card Name | Sign-Up Bonus | Reward Rates | Annual Fee |
---|---|---|---|
Chase Freedom Flex | $200 | 5% on rotating categories, 3% on dining and drugstores, 1% on all other purchases | $0 |
Citi® Double Cash Card | $200 | 2% on all purchases (1% when you buy, 1% when you pay) | $0 |
Blue Cash Preferred® Card from American Express | $300 | 6% on groceries, 6% on select U.S. streaming subscriptions, 3% on transit and U.S. gas stations, 1% on all other purchases | $95 |
Chase Sapphire Preferred Card | 100,000 points | 2X points on dining and travel, 1X points on all other purchases | $95 |
Remember, when choosing a cash back credit card with bonus offers, consider not just the sign-up bonus but also the ongoing reward rates and any fees associated with the card.
Top Cash Back Rewards Cards Reviewed
When it comes to choosing the best cash back credit card, there are numerous options available in the market. In this section, we will review and analyze the top cash back credit cards for maximizing rewards and benefits.
Credit Card Name | Cash Back Rate | Annual Fee | Sign-Up Bonus | Redemption Options |
---|---|---|---|---|
Chase Freedom Unlimited | 1.5% on all purchases | $0 | $200 cash back after spending $500 within the first 3 months | Cash back, travel, gift cards, merchandise |
Citi Double Cash Card | 1% when you buy + 1% when you pay | $0 | N/A | Statement credit, check, gift cards, or other rewards |
Blue Cash Preferred Card from American Express | 6% cash back on groceries (up to $6,000 per year), 6% on select streaming services, 3% on transit and gas, and 1% on everything else | $0 intro annual fee for the first year, then $95 | $300 cash back after spending $3,000 within the first 6 months | Cash back, gift cards, merchandise |
These three credit cards consistently rank among the best options for cash back rewards. The Chase Freedom Unlimited offers a flat rate cash back on all purchases with no annual fee and a generous sign-up bonus. The Citi Double Cash Card offers a unique structure of receiving cash back for both purchase and payment. The Blue Cash Preferred Card from American Express offers high cash back rates on popular spending categories, albeit with an annual fee.
It’s important to note that these are not the only cash back credit cards worth considering. Depending on your spending habits and financial goals, another card may be a better fit for you. Take the time to thoroughly research and compare your options before making a decision.
Additional Considerations for Cash Back Credit Cards
When choosing a cash back credit card, there are a few additional considerations to keep in mind beyond reward rates and sign-up bonuses. These factors can have a significant impact on the overall value and usability of the card.
Credit Score Requirements
Many cash back credit cards require a good or excellent credit score to be approved. Before applying for a card, it’s essential to check your credit score to ensure that you meet the requirements. Applying for a card with a score that’s too low can result in a hard credit inquiry and a negative impact on your credit score.
Foreign Transaction Fees
If you frequently travel outside of the United States, it’s important to consider a card’s foreign transaction fees. Some cash back credit cards charge up to 3% per transaction, which can add up quickly. Look for cards that waive foreign transaction fees to avoid these charges when traveling internationally.
Impact on Credit Utilization
Cash back rewards earned on credit card purchases can be tempting, but it’s essential to remember that using a credit card also affects your credit utilization ratio. This ratio compares your overall credit card balance to your credit limit and can impact your credit score. Using a cash back credit card responsibly and paying off the balance in full each month can help maintain a healthy credit utilization ratio.
“Remember to always use cash back credit cards responsibly, paying off balances in full each month to avoid interest charges and negative impacts on your credit score.”
Considering these additional factors alongside reward rates, annual fees, and sign-up bonuses can help you choose the best cash back credit card for your needs. By selecting a card that aligns with your spending habits and financial goals, you can maximize your rewards while minimizing any potential drawbacks.
Conclusion
In conclusion, choosing the right cash back credit card can help you earn extra cash on your everyday purchases. By selecting the best cash back credit cards, you can maximize your rewards and enjoy the benefits of savvy spending.
When reviewing your options, make sure to consider factors such as cash back rates, annual fees, sign-up bonuses, and redemption options. You should also keep in mind the varying cash back structures, including flat-rate cash back, tiered cash back, and rotating category cash back.
To maximize your rewards, consider optimizing your spending to earn the most cash back possible on your credit card purchases. Be sure to also take advantage of any bonus offers or limited-time promotions available on your cash back credit card.
We hope this article has provided you with a comprehensive understanding of the top cash back credit cards available in 2021. By employing the strategies and tips outlined in this article, you can start maximizing your cash back rewards today!
FAQ
What are cash back credit cards?
Cash back credit cards are credit cards that offer a percentage of the total spending as a cash reward. These cards allow users to earn money back on their purchases, providing an incentive to use credit rather than cash or debit for everyday expenses.
How do cash back credit cards work?
Cash back credit cards work by offering a certain percentage of cash back on eligible purchases. The cash back percentage varies depending on the credit card and can range from 1% to 5% or more. The earned cash back is typically credited to the cardholder’s account or issued as a statement credit.
What types of cash back credit cards are available?
There are different types of cash back credit cards available, including flat-rate cash back cards, tiered cash back cards, and rotating category cash back cards. Flat-rate cash back cards offer a consistent cash back percentage on all purchases, while tiered cash back cards provide higher cash back rates in specific spending categories. Rotating category cash back cards offer increased cash back rates on rotating categories that change every quarter.
How can I choose the best cash back credit card?
When choosing the best cash back credit card, consider factors such as the cash back rate, annual fees, sign-up bonuses, redemption options, and any restrictions or limitations. It’s important to compare different cash back credit cards to determine which one aligns with your spending habits and financial goals.
Can I earn additional cash back rewards or bonuses on cash back credit cards?
Yes, many cash back credit cards offer additional cash back rewards or sign-up bonuses. These can come in the form of a higher cash back rate for the first few months, a bonus for spending a certain amount within a specified time period, or special promotions and offers. Be sure to review the terms and conditions of each credit card to understand the specific rewards and bonuses available to you.
Are there any fees or limitations associated with cash back credit cards?
While many cash back credit cards do not have annual fees, some cards may charge an annual fee, especially for cards with higher cash back rates or additional benefits. Additionally, cash back rewards often have certain limitations, such as a cap on the amount of cash back you can earn or expiration dates for earned rewards. It’s important to review the terms and conditions of each credit card to understand any associated fees or limitations.
What credit score do I need to qualify for a cash back credit card?
The credit score requirements for cash back credit cards can vary depending on the issuer and the specific card. Generally, a good credit score (above 670) is recommended to qualify for the best cash back credit cards. However, there are cash back credit cards available for individuals with lower credit scores, although the cash back rates and benefits may be more limited.
Should I be concerned about foreign transaction fees with cash back credit cards?
It’s important to consider foreign transaction fees when using cash back credit cards internationally. Some cash back credit cards may charge a fee for purchases made outside of the card’s currency, typically around 3%. If you frequently travel or make purchases in foreign currencies, it may be beneficial to choose a cash back credit card that does not charge foreign transaction fees.
Will earning cash back rewards impact my credit utilization?
Cash back rewards do not directly impact your credit utilization because they are not considered a debt. Credit utilization is the ratio of your credit card balances to your credit limits, and cash back rewards do not affect this ratio. However, it’s important to manage your credit card balances responsibly to maintain a good credit score.