Best of
12 Best Cash Back Credit Cards of January 2020
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Our pick for
Bonus rewards: Quarterly categories + cash-back match
on Discover's website, or call (800) 347-0264
on Discover's website, or call (800) 347-0264
Annual Fee
$0
Rewards Rate
1%-5%
Intro offer
Cashback Match™
Recommended Credit Score
Pros
The 5% categories regularly include big line items in many household budgets: grocery stores, restaurants, Amazon.com. You earn 1% on all other spending (that is, spending outside the bonus categories and category spending above the $1,500 quarterly limit when you activate). You get a 0% intro APR period, and this card puts you in charge of your new cardmember bonus. The more you use the card, the bigger your bonus.Cons
Activating the bonus categories each quarter can be a hassle. If you forget, you don't get 5%. The categories might not be a good fit for everyone. You also have to wait a year for your bonus.- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
- Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Redeem cash back any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
- No annual fee.
- View Rates and Fees
Our pick for
Bonus rewards: Quarterly categories + cash bonus
on Chase's website
on Chase's website
Annual Fee
$0
Rewards Rate
1%-5%
Intro offer
$150
Recommended Credit Score
Pros
The 5% cash back is obviously the main selling point. There's also a great 0% intro APR period and a neat sign-up offer: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. And if you're a maximizer, you can transfer your rewards to one of Chase's Sapphire cards to boost their value. (If you're not, cash back is still pretty great.)Cons
You have to opt in to the bonus categories every quarter, which can be a hassle. The 5% categories might not be a good fit for everyone, and in recent years, they've shifted a bit toward lower-spending areas: Restaurants dropped out of the rotation entirely, and gas stations have been included for two quarters a year.- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
- Unlimited 1% cash back on all other purchases - it's automatic
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
- 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5.
- No annual fee
- Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
- Free credit score, updated weekly with Credit Journey℠
Our picks for
Flat-rate cash back: Sign-up bonus + 0% period for purchases
on Chase's website
on Chase's website
Annual Fee
$0
Rewards Rate
1.5%
Intro offer
$150
Recommended Credit Score
Pros
You earn unlimited 1.5% cash back on every purchase, and you can redeem your cash back in any amount at any time, with no minimum redemption amount. Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. If you're a maximizer, you can transfer your rewards to one of Chase's Sapphire cards to boost their value by 25% or 50%.Cons
The 1.5% rewards rate is more or less standard nowadays. You can get higher rewards rates on other cards, although you'd be hard-pressed to match this card's combination of benefits.- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
- Earn unlimited 1.5% cash back on all purchases.
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
- 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5
- No annual fee
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
on Capital One's website
on Capital One's website
Annual Fee
$0
Rewards Rate
1.5%
Intro offer
$150
Recommended Credit Score
Pros
You earn an unlimited 1.5% cash back on everything. And unlike with many other cards, you can redeem your cash back in any amount at any time. This card also comes with an outstanding 0% introductory APR offer and a nifty sign-up bonus: One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening.Cons
The market has caught up to this card's 1.5% flat rewards rate, although not many cards have passed it. You can get higher rewards rates on other cards in specific categories.- One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases for 15 months; 15.49%-25.49% variable APR after that
- 0% intro APR on balance transfers for 15 months; 15.49%-25.49% variable APR after that; 3% fee on the amounts transferred within the first 15 months
- Pay no annual fee or foreign transaction fees
See if you qualify for a better offer with Capital One:
Our pick for
Flat-rate cash back: High ongoing rate
on Citibank's application
on Citibank's application
Annual Fee
$0
Rewards Rate
1%-2%
Intro offer
$0
Recommended Credit Score
Pros
There are no bonus categories to track or spending limits to be mindful of. The combined 2% rate on all purchases is probably the best you're going to do on a card with a $0 annual fee.Cons
The value in this card is all in the rewards rate, so there's no sign-up bonus or 0% period for purchases. Higher cash back percentages can be had on different cards for specific categories. There’s a minimum cash back redemption of $25.- Earn cash back twice. Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- To earn cash back, pay at least the minimum due on time.
- Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 15.49% – 25.49%, based on your creditworthiness.
- Click 'Apply Now' to see the applicable balance transfer fee and how making a balance transfer impacts interest on purchases.
- Balance Transfers do not earn cash back.
- The standard variable APR for Citi Flex Plan is 15.49% – 25.49%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
Our pick for
Customizable rewards: Big cash bonus
on Bank of America's website, or call (877) 754-6706
on Bank of America's website, or call (877) 754-6706
Annual Fee
$0
Rewards Rate
1%-3%
Intro offer
$200
Recommended Credit Score
Pros
The $200 bonus offer is rich for a no-fee cash-back card. You'll earn 3% cash back in a category you choose and 2% at grocery stores and wholesale clubs, on up to $2,500 per quarter in combined spending in those categories. All other purchases earn 1% cash back. (The 3% options are gas, dining, travel, online shopping, drugstores or home improvement and furnishings; you can change your choice once a month.)Cons
The rewards structure is somewhat complicated. Because the amount of spending eligible for the 3% and 2% rewards is capped, you might earn more rewards with a simple flat-rate card that pays an unlimited 1.5% or 2% on everything.- No annual fee
- $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening
- Earn 3% cash back in the category of your choice, 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% on all other purchases
- 0% Introductory APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 15.49% - 25.49% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers
- No expiration on rewards
- If you're a Preferred Rewards member, you can earn 25% - 75% more cash back on every purchase
Our pick for
Customizable rewards: Wide selection of categories
on US Bank's website
on US Bank's website
Annual Fee
$0
Rewards Rate
1%-5%
Intro offer
$150
Recommended Credit Score
Pros
A rotating category card with a twist: You pick your bonus categories. You earn 5% cash back in two categories you choose, on up to $2,000 per quarter in combined spending (then 1%); unlimited 2% cash back in an "everyday" category of your choice; and 1% on all other spending. There's a good sign-up bonus, and the annual fee is $0.Cons
Rotating category cards involve work, and this one adds an extra layer of effort because you have to pick your categories each quarter. Forget to do so, and you'll earn only 1%. Further, the 5% categories tend to be more specialized than on comparable cards, so you might have trouble maxing out bonus rewards.- Earn up to $550 cash back in the first year.
- $150 bonus after spending $500 in eligible net purchases within the first 90 days of account opening.
- 5% cash back on your first $2,000 in combined eligible net purchases ($100 per quarter) on two categories you choose. That adds up to $400 cash back!
- 2% cash back on your choice of one everyday category, like gas stations or grocery stores.
- 1% cash back on all other eligible net purchases.
- No limit on total cash back earned.
- 0% Intro APR* on balance transfers for 12 billing cycles. After that, a variable APR currently 15.49% - 25.49%
- No annual fee*
- Great Offer from U.S. Bank, a 2019 World's Most Ethical Company® - Ethisphere Institute, February 2019
- View Rates and Fees
Our pick for
Bonus rewards: Dining and entertainment
on Capital One's website
on Capital One's website
Annual Fee
$0 intro for the first year, then $95
Rewards Rate
1%-4%
Intro offer
$300
Recommended Credit Score
Pros
This card pays an outstanding (and unlimited) 4% cash back on restaurant dining and entertainment, plus 2% cash back at grocery stores and 1% cash back on all other purchases. There's a fantastic sign-up bonus, too: Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening.Cons
The annual fee of $0 intro for the first year, then $95 might be a dealbreaker for some. If restaurant dining isn't a way of life, consider the Capital One® SavorOne® Cash Rewards Credit Card, which has no fee but pays a lower 3% rate on restaurants and entertainment and offers a smaller bonus.- Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
- Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through May 2020.
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
- No foreign transaction fees
- Capital One cardholders get access to premium experiences in dining, entertainment and more
- $0 intro annual fee for the first year, $95 after that
See if you qualify for a better offer with Capital One:
Our pick for
Bonus rewards: Groceries, gas, commuting, streaming
on American Express's website
on American Express's website
Annual Fee
$95
Rewards Rate
1%-6%
Intro offer
$250
Recommended Credit Score
Pros
This card’s 6% cash back rate at U.S. supermarkets (on up to $6,000 a year in spending, then 1%) and its 3% rate at U.S. gas stations have long made it a NerdWallet favorite. On top of that, you now get 6% cash back on select U.S. streaming subscriptions (see the list here) and 3% on transit, including such things as taxis, rideshares, parking, tolls, trains and buses. All other purchases earn 1% back. The new-cardmember bonus also adds to the appeal.Cons
The annual fee will be a sticking point for some, but the rewards will offset the fee if you spend just $31 a week at the supermarket. If you don't have significant grocery expenses, however, this simply isn't the card for you. Instead, consider the Blue Cash Everyday® Card from American Express, which has a $0 fee but lower rewards rates.- Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
- NEW 6% Cash Back on select U.S. streaming subscriptions.
- NEW 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more.
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
- Over 3 million more places in the U.S. started accepting American Express® Cards in 2017 and 2018.
- Low intro APR: 0% for 12 months on purchases and balance transfers, then a variable rate, currently 14.49% to 25.49%
- $95 annual fee.
- Terms Apply.
- View Rates and Fees
Our pick for
High rewards for bigger spenders
on Alliant Credit Union's website
on Alliant Credit Union's website
Annual Fee
$0 the first year, then $99
Rewards Rate
2.5%
Intro offer
$0
Recommended Credit Score
Pros
The Alliant Cashback Visa® Signature Credit Card has a high cash-back rate of 2.5%, up to $10,000 in qualifying purchases per billing cycle. The card also has no foreign transaction fee, making it a good option for international travel.Cons
There's an annual fee of $0 the first year, then $99. After the first year, you'll have to spend $4,000 a year to make up for it. You’ll also have to be a member of Alliant Credit Union to qualify. (See membership requirements.)- Exclusively designed for those spending $50,000+ a year on their card
- 2.5% cash back, up to $10,000 in qualifying purchases per billing cycle.
- No limit to the cash-back awards you can earn
- No foreign transaction fees
- Generous credit line
- $99 annual fee, waived the first year
- Works with Google Pay, Apple Pay and Samsung Pay
- $0 fraud liability guarantee from Visa
Our pick for
Side hustles and gig work
on Discover's website, or call (800) 347-0264
on Discover's website, or call (800) 347-0264
Annual Fee
$0
Rewards Rate
1.5%
Intro offer
Cashback Match™
Recommended Credit Score
Pros
You earn unlimited 1.5% cash back on all purchases, with no restricted categories to worry about (something that makes a lot of small-business credit cards a bad fit for gig workers). There's a 0% introductory period for purchases, Discover matches the cash back in your first year, and you can get free cards for people who work with you in your business.Cons
The application asks for information about your business. Your business doesn't need to be formally structured like a corporation or LLC (most small businesses aren't), but you'll need to be able to answer questions like how much money it brings in, what it does and how long you've been at it.- INTRO OFFER: Get an unlimited dollar-for-dollar match of all the cash back you earn at the end of your first year, automatically. And no limit to how much we’ll match. So you could turn $350 cash back into $700 with Cashback Match™.
- Earn 1.5% cash back on every dollar spent on all purchases.
- Redeem your cash back for any amount, any time. Your rewards never expire.
- Track business expenses. Download transactions easily into Quicken, QuickBooks, and Excel.
- Add up to 50 free employee cards.
- No annual fee.
- 100% U.S. based customer service. Talk to a real person at any time, day or night.
- Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- View Rates and Fees
Our pick for
Fair or average credit
on Capital One's website
on Capital One's website
Annual Fee
$39
Rewards Rate
1.5%
Intro offer
$0
Recommended Credit Score
Pros
The flat 1.5% cash back rate is pretty great, especially for people without perfect credit, and there’s no limit on the rewards you can earn. The rate is the same as that paid by the Capital One® Quicksilver® Cash Rewards Credit Card, which is only for people with excellent credit. (That card has a $0 annual fee.) There are no foreign transaction fees, and Capital One may bump your credit limit up if you make your first five monthly payments on time.Cons
The annual fee of $39 isn’t very high, but it will still cost you something to have this card. The ongoing APR is high, so you should plan on paying your balance in full each month; otherwise, the interest will wipe out your rewards.- Earn unlimited 1.5% cash back on every purchase, every day
- Earn cash rewards without signing up for rotating categories
- Get access to a higher credit line after making your first 5 monthly payments on time
- Monitor your credit profile with the CreditWise® app, free for everyone
- $0 fraud liability if your card is ever lost or stolen
- No limit to how much cash back you can earn, and cash back doesn't expire for the life of the account
- Help strengthen your credit for the future with responsible card use
- Get customized alerts and manage your account with the Capital One mobile app
See if you qualify for a better offer with Capital One:
Summary of Best Cash Back Credit Cards of January 2020
| Credit Card | Best For | Rewards Rate | Intro Offer | Annual Fee | Learn More |
|---|---|---|---|---|---|
Discover it® Cash Back on Discover's website, or call (800) 347-0264 | Bonus rewards: Quarterly categories + cash-back match | 1%-5% | Cashback Match™ | $0 | on Discover's website, or call (800) 347-0264 |
Chase Freedom® on Chase's website | Bonus rewards: Quarterly categories + cash bonus | 1%-5% | $150 | $0 | on Chase's website |
Chase Freedom Unlimited® on Chase's website | Flat-rate cash back: Sign-up bonus + 0% period for purchases | 1.5% | $150 | $0 | on Chase's website |
Capital One® Quicksilver® Cash Rewards Credit Card on Capital One's website | Flat-rate cash back: Sign-up bonus + 0% period for purchases | 1.5% | $150 | $0 | on Capital One's website |
Citi® Double Cash Card – 18 month BT offer on Citibank's application | Flat-rate cash back: High ongoing rate | 1%-2% | $0 | $0 | on Citibank's application |
Bank of America® Cash Rewards credit card on Bank of America's website, or call (877) 754-6706 | Customizable rewards: Big cash bonus | 1%-3% | $200 | $0 | on Bank of America's website, or call (877) 754-6706 |
U.S. Bank Cash+™ Visa Signature® Card on US Bank's website | Customizable rewards: Wide selection of categories | 1%-5% | $150 | $0 | on US Bank's website |
Capital One® Savor® Cash Rewards Credit Card on Capital One's website | Bonus rewards: Dining and entertainment | 1%-4% | $300 | $0 intro for the first year, then $95 | on Capital One's website |
Blue Cash Preferred® Card from American Express on American Express's website | Bonus rewards: Groceries, gas, commuting, streaming | 1%-6% | $250 | $95 | on American Express's website |
Alliant Cashback Visa® Signature Credit Card on Alliant Credit Union's website | High rewards for bigger spenders | 2.5% | $0 | $0 the first year, then $99 | on Alliant Credit Union's website |
Discover it® Business Card on Discover's website, or call (800) 347-0264 | Side hustles and gig work | 1.5% | Cashback Match™ | $0 | on Discover's website, or call (800) 347-0264 |
Capital One® QuicksilverOne® Cash Rewards Credit Card on Capital One's website | Fair or average credit | 1.5% | $0 | $39 | on Capital One's website |
| Credit Card | Best For | Rewards Rate | Intro Offer | Annual Fee | Learn More |
|---|---|---|---|---|---|
Discover it® Cash Back on Discover's website, or call (800) 347-0264 | Bonus rewards: Quarterly categories + cash-back match | 1%-5% | Cashback Match™ | $0 | on Discover's website, or call (800) 347-0264 |
Chase Freedom® on Chase's website | Bonus rewards: Quarterly categories + cash bonus | 1%-5% | $150 | $0 | on Chase's website |
Chase Freedom Unlimited® on Chase's website | Flat-rate cash back: Sign-up bonus + 0% period for purchases | 1.5% | $150 | $0 | on Chase's website |
Capital One® Quicksilver® Cash Rewards Credit Card on Capital One's website | Flat-rate cash back: Sign-up bonus + 0% period for purchases | 1.5% | $150 | $0 | on Capital One's website |
Citi® Double Cash Card – 18 month BT offer on Citibank's application | Flat-rate cash back: High ongoing rate | 1%-2% | $0 | $0 | on Citibank's application |
Bank of America® Cash Rewards credit card on Bank of America's website, or call (877) 754-6706 | Customizable rewards: Big cash bonus | 1%-3% | $200 | $0 | on Bank of America's website, or call (877) 754-6706 |
U.S. Bank Cash+™ Visa Signature® Card on US Bank's website | Customizable rewards: Wide selection of categories | 1%-5% | $150 | $0 | on US Bank's website |
Capital One® Savor® Cash Rewards Credit Card on Capital One's website | Bonus rewards: Dining and entertainment | 1%-4% | $300 | $0 intro for the first year, then $95 | on Capital One's website |
Blue Cash Preferred® Card from American Express on American Express's website | Bonus rewards: Groceries, gas, commuting, streaming | 1%-6% | $250 | $95 | on American Express's website |
Alliant Cashback Visa® Signature Credit Card on Alliant Credit Union's website | High rewards for bigger spenders | 2.5% | $0 | $0 the first year, then $99 | on Alliant Credit Union's website |
Discover it® Business Card on Discover's website, or call (800) 347-0264 | Side hustles and gig work | 1.5% | Cashback Match™ | $0 | on Discover's website, or call (800) 347-0264 |
Capital One® QuicksilverOne® Cash Rewards Credit Card on Capital One's website | Fair or average credit | 1.5% | $0 | $39 | on Capital One's website |
OTHER RESOURCES
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):
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.
Last updated on January 23, 2020
Methodology
NerdWallet's Credit Cards team selects the best cash-back credit cards based on overall consumer value, as evidenced by star ratings, as well as their suitability for specific kinds of consumers. Factors in our evaluation include each card's cash-back earning rates, rewards structure (such as flat-rate or tiered categories), annual fee, redemption options (including minimum redemption amounts), promotional APR period for purchases, bonus offers for new cardholders, and noteworthy features such as loyalty bonuses or the ability to choose one's own rewards categories.
Frequently asked questions
Every time you use a cash-back credit card, the card issuer "pays you back" a certain percentage of the purchase amount. For example, if your card earns 2% cash back on all purchases, and you buy something for $80, then you would earn $1.60 in cash back. Or say your card earns 5% at the gas station; in that case, a $42 fill-up would earn $2.10.
With most cash-back cards, you can see your accumulated earnings on your monthly statement or through your online account portal, and you can decide when and how to redeem your cash back. Some cards automatically apply your cash back to your account as a credit.
"Cash back" doesn't mean the card issuer sends you an envelope full of dollar bills. But the rewards do ultimately leave you with more cash in your pocket. The simplest way to redeem cash back is to take it as a credit that reduces your account balance: Redeem $50 worth of cash back, and a $325 balance becomes $275. Many cards also allow you to redeem cash back as a direct deposit into a bank account, and some will even mail you a paper check if you request it.
Every card issuer has its own rules for how you can redeem cash back. Some have a minimum redemption requirement — you might not be able to cash in your rewards until you have accumulated at least $20 or $25. Others let you redeem any amount at any time.
There are three basic kinds of cash-back credit cards:
- Flat-rate cards pay the same cash-back rate no matter what you buy. Flat-rate cards typically pay 1% to 2% on everything.
- Tiered cards pay higher rates at specific types of merchants, such as grocery stores or restaurants, and a lower rate (usually 1%) everywhere else. Some cards let you pick which types of merchants earn the higher rates, but most have set categories.
- Rotating category cards pay a higher rate (often 5%) in bonus categories that change from time to time and a lower rate (usually 1%) on everything else. You usually have to "activate" the category online to qualify for the higher rate.
Everyone's spending patterns are different, so the card that earns you the most cash back depends on your individual situation. If you spend far more money eating out than at home, for example, a card that pays 3% at restaurants would likely be a better fit than one that pays 6% at supermarkets. However, if you're interested in the highest available rates on cash-back cards, here are some industry leaders:
- Flat-rate: 2.5% — The Alliant Cashback Visa® Signature Credit Card pays 2.5% on all purchases (and in the first year, it's 3%).
- Groceries: 6% — The Blue Cash Preferred® Card from American Express pays 6% cash back on up to $6,000 a year in spending at U.S. supermarkets (then 1%). Terms apply.
- Gas: 5% — The Sam's Club Mastercard pays 5% on up to $6,000 a year in gas spending (then 1%). And the Ducks Unlimited Rewards Platinum Edition® Visa® Card pays unlimited 5% on gas.
- Restaurants: 4% — The Capital One® Savor® Cash Rewards Credit Card and the Uber Credit Card both pay 4% on dining out.
Legally speaking, credit card rewards are treated as discounts on purchases rather than as income. That means you don't owe any taxes on your cash back.