In the modern age, most of us use a credit card on a regular basis. Whether we carry a balance or not, the convenience, perks and rewards associated with these cards make them a worthwhile addition to our wallets. But what credit card should you get? What’s the best cash back credit card?
Most good credit cards have some sort of rewards program these days. Some earn airline miles, some hotel points, and others earn straight cash back. Today we’ll cover everything there is to know about cash back rewards credit cards. And, we’ll help you find the best cash back credit card for your situation!
Best Cashback Card Overall: Citi DoubleCash
At a Glance: Simple, transparent, easy. A flat 2% cashback on every purchase, with no annual fee.
Rewards: 1% cashback on every purchase, plus 1% when you pay your bill (2% total). No rewards cap, no bonus categories, no complexity.
APR: 0% Intro APR on balance transfers for first 18 months; standard APR 15.74% – 25.74% based on credit
Annual Fee: None
Signup bonus: None, although you get a 18-month 0% intro APR on balance transfers
We like the Citi Double Cash because it’s the best 2% cash back credit card that’s widely available to most people. While it technically offers 1% cashback on purchases and another 1% on payments, this translates to an eventual 2% rebate on all your spending. Rewards do not expire, and there’s no cap to how many you can earn.
The Double Cash is best for those who want to keep it simple. There’s no rotating categories to worry about, no annual fee to eat into your earnings, and no complicated rewards to learn how to use. If you don’t want to mess with bonus categories, tiered rewards, or annual fees, this is the best cash rewards card for you.
Bottom Line: We recommend the Citi DoubleCash for anyone who wants to keep things simple and earn the same great 2% cashback on every purchase they make.
Best Cash Signup Bonus Credit Card: Capital One Savor
At a Glance: A massive $500 signup bonus coupled with 4% cashback on dining and entertainment
Rewards: 4% cash back on dining/entertainment; 2% at grocery stores; 1% on everything else
APR: 16.74% – 25.74% variable APR on purchases and balance transfers
Annual Fee: $95, but it’s waived for the first year ($0 first-year annual fee)
Signup bonus: $500 after spending $3,000 in the first 3 months
The Capital One Savor is the best cash signup bonus credit card of 2020. It’s currently offering a huge bonus of $500 after spending $3,000 in the first 3 months! Plus, the annual fee is waived for the first year. For many people, this card will be worth keeping long-term thanks to its good rewards rates, particularly on dining purchases.
The Savor card earns 4% on dining and entertainment, which can add up quite quickly. 2% on grocery stores is okay, but that’s trumped by the best grocery store credit card (Blue Cash Preferred, see below). And of course you’ll want to take the annual fee into consideration. With that said, the massive $500 signup bonus makes this card definitely worth it for most people. Also, you may be able to earn extra bonus cash by going through Swagbucks when you sign up.
Bottom Line: Signup bonus chasers, rejoice! This is the best cash signup bonus 2020 out of ANY personal credit card. Even better, it’s on a credit card that’s a great value overall!
Best 5% Rotating Categories Credit Card: Discover it
At a Glance: Lucrative 5% rewards on a rotating category; no annual fee; great customer service
Rewards: 1% cashback on all purchases; 5% cashback on a rotating category (changes every 3 months)
APR: 0% Intro APR on purchases and balance transfers for first 14 months; standard APR 14.24% – 25.24% based on credit
Annual Fee: None
Signup bonus: All cashback earned in the first year is doubled at the end of the first 12 months.
The Discover it credit card is a great option for folks who want to maximize rewards. It earns 5% cashback on a specific category, which changes every 3 months. As you can see from the image below, it earns 5% on grocery store purchases for 3 months, followed by 3 months of gas/ridesharing, restaurants, and Amazon.com.
These categories often cover very popular spending categories that people tend to spend a lot of money in already. The 5% cashback is capped at $1,500 in purchases per quarter, so if you max it out you’ll earn $75 in cashback (compared to just $30 if you were using a 2% cashback card). See the full cashback calendar here.
Plus, this card comes with a very unique (and potentially very lucrative) signup bonus. At the end of your first 12 months as a Discover it cardholder, all your cashback will be doubled. So if you earned $150 in cashback, you’ll get another $150 from Discover! This also means that for the first year, every purchase essentially earns 2%, while the 5% categories actually earn 10% cash back!
Bottom Line: We recommend the Discover it for people who are more interested in rewards and don’t mind paying attention to the rotating categories in order to earn a better cashback rate.
Honorable Mention: Chase Freedom. This card is quite similar to the Discover it card in that it earns 5% on a rotating category, and 1% on other purchases. It has a $150 signup bonus, BUT, there’s no cashback doubling the first year – so for many, the Discover it might actually be more lucrative.
Best Tiered Cashback Credit Card (No Annual Fee): Uber Visa
At a Glance: Generous tiered rewards with no annual fee, plus a $100 cash signup bonus and some lucrative perks
Rewards: 4% cashback on dining and bars; 3% back on hotels and airfare; 2% back on online purchases; 1% back on everything else
APR: Standard APR 17.24%, 22.99% or 25.99% based on credit
Annual Fee: None
Signup bonus: $100 cash bonus after spending $500 in the first 90 days
The Uber Visa card is a great choice for generous tiered cashback, with no annual fee. At bars and restaurants you’ll earn 4%; on hotels, airBNB’s and airfare you’ll earn 3%; on online purchases (including Uber rides) you’ll earn 2%; and on everything else, a flat 1%.
That’s an extremely generous reward structure for a no-annual fee card. It’s one of the best cashback cards for dining, even competing with the Capital One Savor (which has a high annual fee). Beyond the rewards, the other perks are pretty juicy, as well: a $100 signup bonus, a $50 credit for subscription services (Netflix, Spotify, etc.) when you spend $5,000 on the card in a year, and cell phone insurance to keep your smartphone protected.
This card is obviously meant for Uber fans, but surprisingly, rewards can be redeemed for straight cash back or Uber credit or gift cards – all at the same rate. This flexibility, combined with a high earning rate and no annual fee, make the Uber Visa the best no annual fee cash back credit card.
Bottom Line: We recommend the Uber Visa for foodies & bar hoppers that can get a lot out of the 4% dining category. It’s also just a great all-around card with several great perks.
Best Cash Back Credit Card for Groceries: Blue Cash Preferred
At a Glance: A lucrative reward rate for groceries is partially offset by an annual fee on an otherwise great card
Rewards: 6% cashback on US supermarkets (up to $6,000); 3% on US gas stations; 1% on everything else
APR: 0% intro APR on purchases + balance transfers for 12 months, then a variable APR of 15.24% to 26.24%, depending on credit.
Annual Fee: $95
Signup bonus: $200 after spending $1,000 in the first 3 months
The Blue Cash Preferred card from American Express is among the best cash back credit cards, but only for certain people. We’d recommend this card for families and people who spend a lot on groceries and gas. The 6% cashback on groceries is unbeatable – but unless you spend a fair amount in this category, the card might not be worth the $95 annual fee.
Let’s say your family spends $500 per month on groceries, which would work out to $6,000 per year (the max amount you can earn 6% on). This works out to $360 in cash back, less the annual fee of $95 = $265 in net rewards. If you had used a 2% cashback card instead (with no annual fee), you would earn $120 in rewards. So, the BCP is a clear winner in this situation. If you crunch the numbers, this card makes sense if you spend at least $300/mo on groceries.
Bottom Line: This is the best cash back credit card for groceries – but the annual fee must be considered closely. We recommend this card for families with large grocery bills each month.
Best Cashback Card for Average Credit: Capital One QuicksilverOne
At a Glance: A good option for folks with average credit – recommended for credit scores of 630+
Rewards: 1.5% cashback on all purchases
APR: 26.96% variable APR
Annual Fee: $39
Signup Bonus: None
If you don’t have great credit, it’s hard to find a rewards credit card that earns any sort of cashback. Thankfully, the Capital One QuicksilverOne does just that, and it’s designed specifically for folks with average credit scores (think 630-700 or so). It earns 1.5% on all purchases, although this will be offset by the $39 annual fee.
Compared to the competition, this is definitely the best rewards credit card for low credit. Most others charge high fees and/or don’t offer any sort of rewards (for other options, see this guide). This card also has built in features to help you improve your credit, like an automatic credit line increase after 5 on-time payments. Using this card responsibly could help you improve your credit score.
Bottom Line: We recommend this card for folks with average credit who want to earn cashback. It’s one of the few poor-credit credit cards that offers any sort of rewards.
Best Cash Back Card for Big Spenders: Alliant Visa Signature Card
At a Glance: The highest cash back rewards rate, but only available for high-income, big spenders.
Rewards: 3% cashback on everything for the first 12 months; 2.5% on everything after that
APR: Rates as low as 12.24%APR depending on credit
Annual Fee: $59 (waived for the first year)
Signup Bonus: Extra 0.5% cashback for the first 12 months (3% cashback total)
The Alliant Credit Union Visa Signature card is the highest cash back credit card out there, offering a whopping 3% cashback on ALL purchases. This 3% rate is only for the first year – but even after that, the card earns 2.5% – which is still among the highest cash back rates available. There are no category bonuses or complicated rewards programs to learn about – just a great flat cash back rate on every purchase.
Now, for the downsides. For one, you must be a member of Alliant Credit Union, which means you need to meet certain eligibility requirements (the easiest way is to make a donation to their partner charity). Second, this card is designed for big spenders. Technically it’s designed for people who spend $50,000+ per year on credit cards, which works out to about $4,200 a month. It’s unclear how they determine eligibility in this regard, but you are unlikely to be approved without a very good income and credit score. We don’t know for sure, but would speculate an income of $100k+ is needed, along with excellent credit.
With all that said, if your financial situation fits that bill, this is the highest cash back credit card available today.
Bottom Line: We recommend this card for big-spenders who don’t want to mess with category bonus cards. You will likely need a very high income in order to qualify.
Is a Cash Back Credit Card Right for You?
Cash back cards can be a great way to rack up some savings on everyday purchases. But, they’re not for everyone. Here are some things to think about:
Responsible Credit Use – First off, it’s important to use credit responsibly. Ideally, this means NOT carrying a balance so you don’t rack up interest charges. But if you do carry a balance, you’ll want to take steps to ensure you’re still using credit as responsibly as possible, and ONLY for necessities. If you don’t think you can use a credit card responsibly, you’re better off sticking to debit cards.
Existing Credit – You won’t be able to get approved for a good cash back credit card unless you already have a credit profile established. We recommend checking your score and credit history over at CreditKarma (it’s free).
Type of Rewards – Cash back is great – but for some people, there may be better options for credit card rewards. For instance, if you travel a lot you might be better off with an airline credit card. For more on this, see the section below.
Cash Back vs Airline Miles Credit Cards: Pros and Cons
There are a lot of different credit cards out there. Some earn cashback, some earn flexible points, and others earn airline miles or hotel rewards points. There are pros and cons to each of these types of rewards, as outlined below:
Cash Back Credit Cards
- PROS: simple; can be redeemed for anything; not limited to available flights or hotels; you know exactly what you’re going to get
- CONS: cashback cards generally have lower signup bonuses; earning rates can be lower; no “ultimate” redemptions such as expensive first class airline tickets
Airline Mile Credit Cards
- PROS: often come with large signup bonuses; can be great value for frequent travelers; often include other perks for travelers (like free checked bags)
- CONS: limit you to a specific airline; more restrictive rewards; much more complicated; you need to find available award space to redeem your miles
Hotel Credit Cards
- PROS: often have large signup bonuses; good perks when staying at hotels; can save you a lot on lodging costs
- CONS: limited to a specific hotel; rewards structure is more complicated; generally not as lucrative as airline credit cards; not useful for alternative lodging like Airbnb or hostels
When trying to decide between a cashback credit card, airline credit card or another type of credit card product, it really comes down to a few things. Here are some questions to ask yourself:
- What are your goals for your credit card rewards?
- Do you travel frequently? If so, what hotels do you stay in, and what airlines do you fly?
- Do you want to invest the time to figure out an airline or hotel rewards program?
If you’d rather keep things simple, a good cash back credit card is the way to go!
Cash Back Credit Card FAQs
Click the links below to jump to the question you want answered, or scroll down for all of them!
- What is a cash back credit card?
- How do cash back credit cards work?
- What is the best cash back credit card?
- Which credit card gives the most cash back?
- WHY do credit cards give cash back?
- Where can I get cash back on my credit card purchases?
- What does cash back on a credit card mean?
- Can you get DEBIT card cash back?
- What’s the difference between credit vs debit cards?
What is a cash back credit card?
A cashback credit card is a consumer or business credit card that offers cash back on your purchases. It’s usually between 1% and 2%, although it can be higher or lower depending on the card. So basically, if you make a $100 purchase on your credit card, you will earn $1-$2 in cash back, which can be redeemed for a statement credit or a transfer to your bank.
How do cash back credit cards work?
Here’s how it works:
- Make a purchase using your cashback credit card (any purchase will work)
- You will earn 1%-2%+ of that purchase back as cash back
- Usually your cashback rewards will post to your account after your next statement
- You can then redeem rewards for a statement credit (which lowers the amount of your credit card bill), or you can transfer it to your bank
- You will earn cashback rewards whether you pay your credit card balance in full, or you carry a balance.
So let’s say you have a 2% cashback credit card and you make a $100 purchase of groceries. When you get your next credit card statement, you’ll earn $2 in rewards for that purchase, which you can redeem to reduce the amount you owe your credit card issuer. This example covers a flat 2% card – see the next section if you’re curious about bonus categories.
How do credit card reward bonus categories work?
Some credit cards have specific categories of spending that earn extra rewards. For example, the Capital One Savor card earns 4% cashback on dining and entertainment, 2% on grocery stores, and 1% everywhere else.
The way this works is that every merchant has what’s called a merchant category code. There’s a code for grocery stores, a code for restaurants, etc. When you make a purchase, this code determines the rewards category of the purchase, and therefore the % of rewards you will earn. This Visa Supplier Locator lets you type in a name of a business to find its merchant category code (MCC).
In the example of the Capital One Savor card, if you make a purchase at a restaurant, it will code as “restaurant” and you will earn 4% rewards. But if you purchase a snack at a gas station, it will probably code as “gas station” or “general” instead of dining – so you’d just earn 1%.
What is the best cash back credit card?
It’s difficult to choose a single best cashback credit card, simply because there are so many good options for different situations. Ultimately, the best cashback card for you will depend on your spending patterns and preferences.
The guide above lists all our recommended cash back cards, each of which has pros and cons.
Which credit card gives the most cash back?
In terms of ALL purchases, the Alliant Cashback Visa Signature card earns the most cashback. It offers 3% cashback for the first year, and then 2.5% cashback after that first 12 months.
In terms of bonus categories, the Discover it earns 5% on a rotating category, AND cashback is DOUBLED in the first year. So, this card essentially earns 10% cash back – but only on specific rotating categories.
Beyond that, you could figure out a top cash back card for each specific category. You’ll find the best options in each category in the guide above.
WHY do credit cards give cash back?
Cashback is pretty sweet – but why do credit card issuers bother to offer it?
In one word: competition. The competition in the credit card industry is fierce, and card issuers are battling each other for your business.
And they can certainly afford it – credit card issuers earn money in a variety of ways. Even if you never pay interest on a your card, the banks still earn money from every single purchase you make, due to the interchange fees they charge merchants.
Where can I get cash back on my credit card purchases?
Essentially, anywhere that accepts credit cards will earn cashback rewards. That means the grocery store, the bar down the road, your favorite restaurant and your hairdresser. Every single purchase made using your cash back credit card will earn rewards.
Some cards have different categories of purchases that earn different cash back rates, so one purchase might earn 1% while another would earn 3%.
With all that said, only purchases earn rewards. Some credit card transactions won’t earn rewards, such as cash advances and balance transfers.
What does cash back on a credit card mean?
Cash back on a credit card means that you will earn rewards points that can be redeemed for cash, every time you make a purchase using your card. For example, a $50 purchase on a 2% cashback credit card would earn $1 in rewards which you can redeem for cash.
Can you get DEBIT card cash back?
We’ve gone over the best cash back credit cards on the market – but can you earn cash back on a debit card?
Most of the time, the answer is no. There are a handful of smaller banks (and a couple national banks) that offer some sort of cash back or rewards on debit card purchases, but it’s usually pretty minimal.
What’s the difference between credit vs debit cards?
Speaking of debit cards, how do they differ from credit cards, anyways? This video does a good job of explaining the basics:
How do you redeem cash back rewards?
Once you’ve earned the rewards, how do you actually redeem them?
This varies depending on your bank. Most cards have some sort of cash back minimum, which could be $1 or could be $25+. In some cases you’ll have to save up rewards until you hit that minimum. In any case, you can usually redeem your rewards for:
- A statement credit (which reduces the amount you owe on your credit card)
- A transfer to your bank account
- A paper check mailed to you, in some cases
- Other rewards, like gift cards or free items
Generally speaking, statement credits are the easiest and the most common redemption offered by cash back cards. They make it easy to redeem, too, as you can essentially buy anything you want on your credit card, and then “erase” part of the purchase by redeeming your cash back!
Selecting the best credit card with cash back rewards will depend on your specific situation. We hope that this guide gave you enough great options to select the card that’s ideal for you.
That’s all you need to know about cash back rewards credit cards! If you have any questions, leave a comment below and we’ll get back to you!