Best Cash Back Credit Cards of August 2019

How their rewards rates stack up

The cards on our roundup are the ones we consider the best when taking all their features into account — cash-back rates, bonuses, 0% APR periods, etc. But they're not the only good cash-back cards on the market. Here's a quick look at a broader array of cards:

What are cash-back credit cards?

Cash-back credit cards offer the most useful and flexible rewards currency there is: cash. Points and miles can have squishy value and limited flexibility when redeeming. But a dollar in cash back is a buck you can spend anywhere.

Also, cash-back cards are typically the simplest rewards cards: You get a certain amount of cash for every dollar you spend. You might get more cash back for certain types of spending — at restaurants or gas stations, for example.

If you spend $60 at a restaurant using a card that gives 3% back on restaurant spending, you just earned $1.80 for doing nothing. Think of it this way: A cash-back rewards card is like getting a discount on everything you buy with the card. The fun comes when you use the card everywhere and your cash back piles up.

Even the best cash-back credit cards probably aren't as flashy as travel rewards credit cards, but as with the hare and the tortoise, sometimes slow-and-steady wins the race.

Types of cash-back credit cards

Cash-back credit cards come in three basic types that determine how you accumulate cash rewards.

Flat rate

Flat-rate cash-back cards give you a set percentage of cash back regardless of what you buy with the card. A good benchmark is 1.5% cash back on everything. But a few cards give you back 2% or even more.

Examples:

• Citi^® Double Cash Card – 18 month BT offer. This card gives you 2% cash back on all purchases: 1% for every dollar you spend and another 1% for every dollar you pay off.
• Capital One® Quicksilver® Cash Rewards Credit Card. It pays unlimited 1.5% cash back on everything and comes with a sign-up bonus.

Tiered

Tiered cards earn a higher rate in specific categories of spending, such as groceries or gas, and usually 1% on everything else. With some cards, you get to choose which categories earn the higher rewards.

Examples:

• Blue Cash Preferred® Card from American Express. Earn 6% back at U.S. supermarkets on up to $6,000 spent per year (then 1% back); 6% on select U.S. streaming services; and 3% back at U.S. gas stations and on transit. All other spending earns 1% back. Terms apply.
• Capital One® SavorOne® Cash Rewards Credit Card. It pays 3% cash back on restaurant dining and entertainment, plus 2% back at grocery stores and 1% back on all other purchases.

Rotating categories

Rotating bonus category credit cards offer a high cash-back rate, typically 5%, in specific categories that change periodically — usually every three months. Everything else earns 1% on everything else. You have to "opt in" or "activate" the bonus categories online each quarter.

Examples (with both of these cards, the 5% cash back applies to the first $1,500 in bonus category spending per quarter):

• Discover it® Cash Back.
• Chase Freedom®.

Common cash-back bonus categories

Many cash-back cards earn a higher rewards rate for certain purchases. That’s usually based on where you use the card rather than what you buy with it. You’ll see this with all rewards cards except flat-rate cards.

Examples of common bonus categories:

• Supermarkets. Sometimes card issuers call this category “groceries,” but the rewards are determined by the type of store, not the specific items you purchase. So it applies to groceries, cleaning supplies, toiletries, prepared meals and anything else bought at the supermarket. You can often buy a gift card for a restaurant or retailer at the supermarket, and it counts as a supermarket purchase. Often warehouse clubs and superstores, like Target and Walmart, are excluded. For larger households, this can be one of the most valuable categories to get accelerated rewards.
• Restaurants. Sometimes called "dining," this usually includes everything from fast-food restaurants and pizza delivery to white-tablecloth fine dining. Your whole restaurant bill, including the server’s tip, counts for accelerated rewards.
• Gas stations. This is often described as "gas" and usually applies to traditional gasoline service stations, such as Mobil, Shell and BP. It usually doesn't extend to gas stations affiliated with supermarkets or warehouse clubs. Often, it counts everything you buy in the associated convenience store, too, although a few cards count only gas paid for at the pump. Gas sounds like a really useful category, but unless you’re a long-distance commuter, most households don’t spend as much at gas stations as they do at, say, supermarkets.

That last point hints at the key to cash-back categories — the best ones are where you spend the most money regularly. So a bonus category like digital streaming services might be comparatively less valuable because while you might spend money on Netflix and Spotify, you probably don’t spend very much.

Other bonus categories you might see include entertainment, drugstores, home improvement stores, wholesale clubs and mobile wallet purchases. Rotating bonus category cards sometimes designate specific retailers for bonus rewards for a quarter, such as Amazon or Walmart. 

Card issuers determine whether a purchase earns a higher rate based on the retailer's merchant category code, which usually describes the merchant’s primary business.

How to compare cash-back credit cards

Which type of cash-back credit card is right for you depends on how you spend money and your patience for tracking rewards categories. If you spend a lot in certain categories, such as gas or groceries, consider a tiered or bonus category card. If you don’t want the fuss of remembering which of your cards have which bonus categories, opt for a flat-rate card.

Once you’ve decided which type of cash-back credit card works best for you, consider these factors:

Annual fee

Nobody wants to pay an annual fee — and most cash-back cards don’t have one — but sometimes it can work out better. That’s because cards with annual fees often have more lucrative rewards like higher cash-back rates for some or all of your spending.

The key is to make sure paying the annual fee is worthwhile mathematically. Think of the fee as a reduction in your annual cash-back total. 

Sign-up bonus

A cash sign-up bonus is nice to get — if your regular spending will be enough to earn it. (You typically have to spend $500 to $1,000 in the first few months.) It’s essentially free money. Or, for a card with an annual fee, it might compensate for the annual fee for a few years.

Don’t disregard cash-back cards without a bonus, though. Bonuses are less common with cash-back cards, and bonuses are low compared with those on travel credit cards. A higher rewards rate on one card could be a better deal than a card with a bonus and a lower rate, depending on how much you spend and where you spend it.

Flexibility

What are the rules for getting your cash back? Some cards have a threshold amount — maybe you need to earn $25 in cash back before you can redeem, for instance. Some cards allow you to take the cash back as a statement credit, which can lower your next credit card bill. Others allow you to redeem cash directly into your bank account, while some offer to mail you a paper check. Some issuers allow you to redeem rewards for more than cash back — for merchandise or gift cards, for example. And others might allow you to transfer cash-back points to another card program where strategic use might yield better value.

» MORE: Beware of minimum redemption requirements

0% introductory APR period

You typically don’t want to carry a monthly balance with rewards cards, but some cash-back cards offer 0% intro APR periods on new purchases, balance transfers or both.

Carrying a balance from month to month incurs interest charges that can eat up the value of your rewards. If you expect to carry a balance, look for a low-interest credit card instead.

» MORE: How to choose a cash-back credit card

Cash back vs. travel cards

Cash-back cards are easy to understand and use, but they can also seem boring. That’s especially true when they're compared with travel cards, which can be aspirational — visions of earning a free flight to Bora Bora in first class or a night at a swanky hotel in New York City.

And co-branded travel cards for airlines and hotel companies might give you perks no other card will. For example, airline cards often offer free checked bags and priority boarding. Many of the best hotel credit cards give you a free night's stay each year.

Still, while travel dreams are more exciting than another $90 in cash back on your credit card statement, cash-back credit cards might actually be the right choice for most people. A 2016 study by NerdWallet found in many cases, a consumer could get more value by using a cash-back card and using the cash rewards to pay for travel expenses.

The study found that domestic travelers who spend less than $8,600 per year on travel earn more rewards with a cash-back card than a travel rewards card, especially if they hold the card a long time.

A big exception: Americans who travel overseas an average of at least once per year are often better off with a travel rewards credit card because of higher point values and no foreign transaction fees.

» MORE: Cash-back cards that are great for travel, too

Pros and cons of using a cash-back card

Cash-back cards are great for many people, but not everybody. Here’s a quick look at their advantages and disadvantages compared with other types of cards.

Pros: Why it's worth getting a cash-back card

Best rewards currency. Cash is king for flexibility. Nobody can change the value of it, and you can spend it anywhere. You don’t have to wait years to accumulate enough miles or points to redeem them for a free flight or hotel stay, as you might with a travel card.

Simplicity. Cash-back cards tend to be far easier to understand and use than other types of cards that leave you wondering whether you’re getting the most value out of them.

No or low annual fees. You can find plenty of choices with no annual fee or reasonable fees if you want superior cash-back rewards.

Low bonus requirements. It’s usually easier to hit the required spending level for a sign-up bonus on a cash-back cards than on travel credit cards.

Cons: Why a cash-back card might not be for you

Relatively low sign-up bonuses. Bonuses might range from none to about $200, while some travel-card bonuses exceed $500.

No outsized value. Points earned with travel cards can sometimes be parlayed into huge value, far exceeding the value of any cash-back card.

Inappropriate for carrying a monthly balance. Some cash-back cards have a good 0% intro APR period, but most do not. If you carry a balance, you’re likely to pay more in interest than you earn in cash-back rewards.

Few perks. You’re unlikely to find such valuable perks as reimbursement for TSA Precheck applications or free checked bags or early check-in at a hotel.

Foreign transaction fees. Some cash-back cards charge you a percentage of every purchase you make abroad. Such fees are rarer on travel and luxury cards.

» MORE: NerdWallet's best no foreign transaction fee credit cards

Making the most of your cash-back card

Charge often

If you’ll have trouble paying off the balance every month, a cash-back card — or any reward card — might not be for you. But if you never carry a balance, try to pile as much spending as you can onto your cash-back card to pump up your rewards.

Combine cards for optimum rewards

If you’re willing to switch among cards to maximize your rewards, be sure to get cards that complement one another's rewards structures. For example, you can get one card that offers extra cash back for dining, another that offers extra for shopping at Amazon, and another that gives extra for gas and groceries. If your cash-back categories overlap, you’ll wind up with redundant cards in your wallet.

Earn back the annual fee

If there's an annual fee, make sure you’re getting more than that in cash back. An annual fee is worth it only if you’re earning more in rewards than you pay — and more than you would if you were using a no-fee card. Most cash-back credit cards keep a running total of the rewards you’ve earned in the past year, so log in to your account and check your statements after a year to make sure it’s worth it to pay the annual fee again.

Take advantage of rotating bonus categories

If you have a card with rotating cash-back bonus categories, make sure to activate the categories every quarter so you don’t miss out on 5% cash back on featured categories like restaurants, wholesale clubs, gas stations, groceries and more.

Earn your sign-up bonus

Make sure you meet the minimum spending requirement to qualify for the bonus, otherwise you could miss out on hundreds of dollars. Cash-back cards typically require less than $1,000 in spending to earn the bonus, so shift as much spending as possible to a new card until you earn the bonus.

Use the card's shopping portal for extra rewards

Online credit card malls, accessible through your credit card login, can help you earn extra cash back on your web-based purchases, sometimes up to 10 times as much. Not all card issuers offer shopping portals, but it’s worth checking.

Other cards to consider

If you carry a balance from month to month, the interest can quickly gobble up more than you're earning in cash back. In that case, a low-interest card is probably a better choice. If you need to transfer a balance, look for a balance-transfer credit card. If you have bad credit or you’re a student, there are specialty cards for you.

If you’re a frequent traveler, you might be able to reap better value from a travel credit card, maybe coupled with an airline card or hotel card.

Still not sure? See our best rewards cards for a range of credit cards that earn cash, points or miles.

To view rates and fees of the Blue Cash Preferred® Card from American Express, please visit this page.
To view rates and fees of the Blue Cash Everyday® Card from American Express, please visit this page.
To view rates and fees of the American Express Cash Magnet® Card, please visit this page.