A Complete Review on Cash-Back Credit Cards

By | December 4, 2023

If you’re looking for ways to save on your everyday expenses, cash-back credit cards can be an excellent solution. These cards allow you to earn rewards on various purchases, including groceries, gas, online shopping, streaming services, and more. With different types of cash-back cards available, you have the flexibility to choose the one that suits your needs and spending habits.

Understanding Cash-Back Credit Cards

A cash-back credit card enables you to earn a percentage of your card spending back as rewards. These rewards can typically be redeemed as checks, bank deposits, or statement credits. For example, if your card earns 1% cash back on all purchases, spending $1,000 would result in $10 back in rewards.

There are three major types of cash-back credit cards: flat-rate cash back, tiered cash back, and rotating category cards. Each type offers unique benefits and rewards structures.

1. Flat-Rate Cash Back Cards

Flat-rate cash back cards provide a consistent cash back rate on all purchases. These cards are ideal if you prefer simplicity and don’t want to track spending categories. You can typically redeem your cash back rewards as statement credits, checks, or bank deposits. Some cards even offer additional redemption options like travel bookings, gift cards, or shopping deals.

Examples of flat-rate cash back cards include:

  • Citi Double Cash Card: This card earns 1% cash back on purchases and an additional 1% when you pay them off. It also offers a 0% intro APR on balance transfers for 18 months.
  • Capital One Quicksilver Cash Rewards Credit Card: With this card, you earn a flat 1.5% cash back rate on all purchases. It also offers a 0% intro APR on purchases and balance transfers for 15 months.

2. Tiered Cash Back Cards

Tiered cash back cards provide different cash back rates for various types of purchases. These cards often offer higher cash back rates for specific categories like travel, dining, gas, groceries, and department stores. However, it’s important to review the card’s terms and conditions for any restrictions or dollar limits on these categories.

Examples of tiered cash back cards include:

  • Chase Freedom Unlimited: This card offers 5% cash back on travel purchases through Chase, 3% back at restaurants and drugstores, and 1.5% back on all other purchases.
  • Blue Cash Everyday® Card from American Express: With this card, you earn 3% cash back at U.S. supermarkets (up to $6,000 in annual spending), 3% back at U.S. gas stations (up to $6,000 per year), and 1% back on all other purchases.

3. Rotating Category Cards

Rotating category cards offer higher cash back rates on specific categories that change quarterly. Common categories include groceries, gas stations, home improvement stores, and even popular retailers like Amazon and Uber. However, keep in mind that you’ll need to activate the bonus categories online each quarter to earn the extra rewards.

Examples of rotating category cards include:

  • Discover it® Cash Back: This card offers 5% cash back on rotating categories such as grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate.
  • Bank of America Customized Cash Rewards credit card: With this card, you can select a 3% cash back category each month and earn 2% back on up to $2,500 in quarterly purchases at grocery stores and wholesale clubs.

Choosing the Right Cash-Back Credit Card

With a wide range of cash-back credit cards available, it’s essential to consider your spending habits, preferences, and financial goals when choosing the right card for you. Here are some steps to help you compare and select the best cash-back card:

1. Calculate Your Earning Potential

To determine your earning potential, analyze your spending patterns and identify the categories where you spend the most. Different cards offer varying cash back rates on specific categories, so choose a card that aligns with your spending habits.

  • Flat-rate cards are suitable if your spending is evenly spread across multiple categories or if you prefer simplicity.
  • Tiered cash back cards are ideal if you spend more in specific categories like travel, dining, or groceries.
  • Rotating category cards can be rewarding if you’re willing to track and activate the bonus categories each quarter.

2. Consider Sign-Up Bonuses

Many cash-back credit cards offer sign-up bonuses, which can significantly boost your earnings. However, be sure to review the spending requirements to receive the bonus. Only pursue a sign-up bonus if you can meet the spending requirement without overspending.

3. Evaluate Annual Fees

Some cash-back credit cards charge annual fees, so consider whether the rewards and benefits outweigh the cost. If the annual fee outweighs the potential rewards, it may be better to opt for a no-fee card.

4. Explore Cardholder Benefits

In addition to rewards programs, cash-back credit cards often offer additional benefits such as free credit score access, extended warranty coverage, concierge service, travel accident insurance, purchase protection, and price protection. Assess these benefits and choose a card that aligns with your needs.

Tips for Maximizing Cash Back Rewards

To make the most of your cash-back credit card, consider the following tips:

  • Avoid carrying a balance and paying interest on your purchases. This can quickly negate the benefits of cash back rewards.
  • Choose a card that matches your spending habits to maximize earnings in your preferred categories.
  • Take advantage of sign-up bonuses and referral programs to earn extra cash back.
  • Utilize cardholder benefits like purchase protection and extended warranty coverage for added value.
  • Contact your issuer and inquire about retention offers to potentially reduce or waive annual fees.

Redemption Options and Considerations

Cash-back credit cards provide various redemption options for your earned rewards. These options may include statement credits, mailed checks, deposits into savings accounts, gift cards, and even online portals for travel bookings or discount shopping. However, each card’s rewards program differs, so review the terms and conditions to understand how redemptions work.

Things to Consider Before Applying for a Cash-Back Credit Card

Before applying for a cash-back credit card, there are a few factors to consider:

  • Good to excellent credit requirements: Most top cash-back credit cards require a good to excellent credit score, typically a FICO score of at least 670.
  • Sign-up bonus requirements: If you’re interested in earning a sign-up bonus, ensure that you can meet the spending requirements within the designated timeframe.
  • Monitoring bonus categories: If you opt for a rotating category card, be prepared to track the changing categories and their respective cash back rates.
  • Potential limitations on rewards value: Cash back cards may have a fixed point value, limiting the potential for higher redemption rates compared to other types of rewards cards.
  • Fewer perks compared to other rewards cards: If you value additional perks like travel deals or free checked bags, a travel credit card might be a better fit.
  • Consider fees: Evaluate whether the potential cash back rewards outweigh any annual fees, especially if you anticipate carrying a balance.

Cash Back vs. Other Rewards Programs

When comparing cash-back credit cards to other types of rewards programs, consider your personal preferences and spending habits.

  • Cash back cards are ideal for saving on daily expenses and offer simplicity in their rewards programs.
  • Travel rewards cards can help save money on travel expenses and often include rewards on lifestyle categories.
  • Airline-branded credit cards may be suitable if you prefer a specific airline and value their associated perks.

It’s important to note that cash-back credit cards generally have higher interest rates compared to low-interest credit cards. If you anticipate carrying a balance, a low-interest credit card might be a better option to avoid accruing excessive interest charges.

How U.S. News Evaluates Cash-Back Credit Cards

U.S. News conducts comprehensive evaluations to determine the best cash-back credit cards. Factors considered include overall satisfaction data, cash back earning rates, annual fees, APRs, and sign-up bonus values. The satisfaction data is based on an annual nationwide survey.

Each top pick on the list offers either a flat cash back rate for all purchases or bonus rates for specific categories. It’s crucial to assess your own spending habits to determine which card would provide the most cash back for your individual needs.


Cash-back credit cards can be an excellent tool for earning rewards on your everyday expenses. By selecting the right card and understanding its rewards program, you can maximize your earnings and enjoy the benefits of cash back. Remember to choose a card that aligns with your spending habits, evaluate sign-up bonuses and annual fees, and take advantage of cardholder benefits. With careful consideration, you can find a cash-back credit card that suits your financial goals and preferences.

Leave a Reply

Your email address will not be published. Required fields are marked *