10 Best and Worst Credit Cards for Cash Back: A Quick Guide
Choosing the right credit card can be a game-changer for your finances, especially when it comes to cash back rewards.
There are many options available, each with its own set of benefits and drawbacks. This guide will help you navigate through the best and worst cash back credit cards, so you can make an informed decision.
You might be looking for a card that offers high rewards on everyday purchases or one with a straightforward flat-rate cash back. Understanding which card suits your spending habits can save you a lot of money in the long run. Whether you’re a big spender or just looking to maximize your monthly grocery rewards, there’s something out there for everyone.
Let’s dive in and explore your options.
1) Chase Freedom Unlimited
The Chase Freedom Unlimited card is a favorite for cash back rewards.
This card offers 1.5% cash back on all purchases.
It’s a simple and effective way to earn rewards without keeping track of categories.
One of the best features is the lack of an annual fee.
You don’t have to worry about extra costs just to use it.
Additionally, if you purchase travel through the Chase Travel portal, you earn 5% cash back.
Dining out and drugstore purchases give you 3% cash back.
This makes it a great choice for regular expenses.
If you like eating out or shopping at drugstores, the rewards can add up quickly.
For new users, there’s a low introductory APR.
It can be helpful if you need to carry a balance for a little while.
Just be sure to check the terms to know how long the intro period lasts.
The Chase Freedom Unlimited is well-suited for people with good credit.
If you have a solid credit score, this card could be an excellent fit for your wallet.
To read more about this card, visit the Chase Freedom Unlimited review on WalletHub.
2) Discover it Cash Back
The Discover it Cash Back card is a strong contender in the cash back category.
It offers 5% cash back on everyday purchases in rotating categories each quarter, up to the quarterly maximum after you activate.
You also get 1% cash back on all other purchases.
The best part is that Discover will match all the cash back you’ve earned at the end of your first year.
This card has no annual fee, making it a great option if you’re just starting with cash back cards.
You can also enjoy an introductory 0% APR for the first 14 months on purchases and balance transfers.
The customer service is 100% U.S. based, and you can reach a live agent anytime by calling 1-800-Discover.
Just note that some specialized agents may not be available 24/7.
The Discover it Cash Back card might require a good credit score to qualify, typically 700 or above.
Each quarter, the 5% bonus categories change, so you’ll need to keep an eye on what’s eligible.
It’s a versatile card for various spending habits.
While you do need to activate the bonus categories each quarter, the potential rewards can be worth it.
For more details, you can compare this card with others on Discover’s cash back credit cards comparison page.
3) Citi Double Cash Card
The Citi Double Cash Card is a straightforward and rewarding option if you want cash back on your everyday purchases.
You earn 2% cash back on all purchases: 1% when you buy something and another 1% when you pay it off.
This makes it easy to rack up rewards.
You don’t have to worry about rotating categories or spending limits.
Every purchase counts the same, so there’s no stress about optimizing your spending.
Plus, there’s no annual fee, so all the rewards you earn go straight to you.
The card also offers a 0% introductory APR on balance transfers for 18 months.
After that, the regular APR ranges from 19.24% to 29.24%, depending on your creditworthiness.
This can be great if you want to pay down existing debt without adding interest for a while.
Another perk is that you can convert your cash back into Citi ThankYou Points.
This adds some flexibility if you prefer using points for travel or other rewards.
The redemption options include statement credits, direct deposits, and even checks.
One thing to note is that there are no bonus categories.
If you’re looking for higher rewards in certain areas like groceries or gas, you might want to pair this card with another one.
But if you prefer simplicity, this card might be perfect for you.
The Citi Double Cash Card is worth considering if you want a no-fuss, high-reward cash-back card.
It can be especially good for those who prefer a flat rate of rewards across all their spending categories.
Check out more details on The Points Guy.
4) American Express Blue Cash Preferred
The American Express Blue Cash Preferred is a popular cash back card, especially for families.
One of its best features is the 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases.
After reaching the $6,000 limit, you’ll earn 1% cash back on groceries.
It also offers 6% cash back on U.S. streaming services like Netflix and Spotify.
You’ll get 3% cash back at U.S. gas stations and on transit, such as buses, trains, and rideshares.
This can be a great way to save money on your daily commute and other travel expenses.
For other purchases, you’ll earn 1% cash back.
The annual fee is $0 for the first year, then $95.
If you spend a lot in the bonus categories, this fee might be worth it.
To earn a statement credit, you need to spend $3,000 in the first six months.
This can give you a nice boost in savings early on.
To get the most value from this card, aim to use it in the high cash back categories like groceries, streaming, gas, and transit.
Keep an eye on your grocery spending to maximize the 6% cash back benefit.
For more information, check out this detailed review on WalletHub.
5) Bank of America Cash Rewards
Bank of America Cash Rewards credit card offers good flexibility for its users.
You get 3% cash back in a category of your choice, which is pretty cool.
Options include gas, online shopping, dining, and more.
You also earn 2% cash back on grocery store and wholesale club purchases.
This is available on the first $2,500 in combined purchases each quarter.
Beyond that, you get unlimited 1% cash back on all other buys.
If you qualify for Preferred Rewards, the cash back rates get even better.
Your 3% category could go up to 5.25%, and groceries could jump to 3.50%.
This can make a big difference in your rewards.
This card is pretty straightforward and rewards you for the things you buy regularly.
It’s a nice fit if you like a bit of control over your rewards.
It also stands out with no annual fee, which is always a bonus.
Make sure to keep track of your categories and spending to maximize your cash back.
Otherwise, you might not benefit as much from the higher rates.
You can learn more about this card and see if it fits your needs by visiting Bank of America’s website.
It’s worth a look if you’re shopping for a versatile cash back card.
6) Capital One Quicksilver
The Capital One Quicksilver Cash Rewards Credit Card keeps things simple.
You earn a flat 1.5% cash back on all purchases.
There’s no need to worry about rotating categories or spending limits.
Just use your card, and watch your rewards grow.
This card comes with a $0 annual fee.
This makes it a great choice if you’re looking to save on fees while still earning rewards.
Plus, there’s a 0% intro APR on purchases and balance transfers for the first 15 months.
You won’t get the highest cash back rates compared to some other cards.
But the convenience of a flat rate can make up for that.
It’s a good option if you want straightforward rewards without the hassle.
If you’re interested in learning more, check out this Capital One Quicksilver review on Forbes.
7) Wells Fargo Active Cash Card
The Wells Fargo Active Cash Card is a solid choice for anyone looking to earn cash back.
You get an unlimited 2% cash back on every purchase.
Simple and straightforward.
One of the best things about this card is the welcome offer.
You can earn a $200 cash rewards bonus after spending $500 in the first three months.
There’s no annual fee, which makes it even more attractive.
Plus, it offers zero interest on purchases and balance transfers for the first 15 months.
Cash rewards work like other programs.
Each percentage point is worth 1 cent, so 2% cash back means you get 2 cents per dollar spent.
This card is great for everyday spending.
Whether you’re buying groceries, gas, or dining out, you’ll earn cash back on every dollar.
If you’re someone who doesn’t want to deal with categories or rotating rewards, this card could be perfect for you.
Also, it comes with Visa benefits like travel and emergency assistance and auto rental collision damage waiver.
Check it out more on Wells Fargo Active Cash Card Review.
In summary, the Wells Fargo Active Cash Card offers straightforward cash back with no annual fee, a good welcome bonus, and useful Visa benefits.
It’s a great option for everyday use.
8) U.S. Bank Cash+ Visa Signature Card
The U.S. Bank Cash+ Visa Signature Card gives you a lot of control over how you earn cash back.
You can choose two categories each quarter to earn 5% cash back on up to $2,000 in purchases.
This card also has a 2% cash back category for gas stations, grocery stores, or restaurants.
Plus, you’ll get 1% back on all other purchases.
One cool thing is the 0% intro APR on purchases and balance transfers for 15 billing cycles.
After that, the APR ranges from 19.49% to 29.74% variable.
It’s a great card if you’ve got good credit (typically a score of 670 or higher).
The no annual fee makes it even more appealing.
If you plan your spending well, you can maximize your rewards.
You can check out more details on this card here and here.
9) Ink Business Cash Credit Card
The Ink Business Cash Credit Card is a great option for small business owners.
It offers a healthy 5% cash back on office supplies and select utilities.
These categories can help you save a lot if your business involves frequent purchases of these items.
You also get 2% cash back at restaurants and gas stations.
These are common business expenses, making the rewards quite useful.
For everything else, you earn 1% cash back.
One of the best parts is that this card has no annual fee.
So, you’re getting all these rewards without having to pay yearly just to keep the card.
Plus, there’s a 0% introductory APR on purchases for 12 months.
After that, the APR ranges from 18.49% to 24.49% variable.
There is a cap on rewards, though.
You can earn 5% and 2% cash back on up to $25,000 in combined purchases for each category per cardmember year.
If your business expenses are higher, you might need another card to maximize rewards.
If you link this card with another Chase card that earns Ultimate Rewards points, you can more than double the value of your cash back.
This feature can make your rewards even more valuable.
For more details, you can check out a detailed review.
The card also comes with a sign-up bonus.
You can earn 75,000 points after you spend a certain amount in the first three months.
These points can also be redeemed for travel, gift cards, or other rewards.
Learn more about this offer on One Mile at a Time.
10) PenFed Power Cash Rewards
The PenFed Power Cash Rewards card is a solid choice if you’re looking for straightforward cash back.
You earn 1.5% cash back on all purchases.
This rate can increase to 2% if you’re a PenFed Honors Advantage member.
There is no annual fee, which makes it a budget-friendly option.
You also get a welcome bonus of $100 after you spend $1,500 in the first 90 days.
Another benefit is the 0% promotional rate on balance transfers for the first 12 months.
After that, the interest rate is still decent, though it becomes non-variable.
You can easily manage your rewards using the PenFed website.
Redeem your cash back at any time by logging into your account.
This card doesn’t have a lot of fancy perks, but its simplicity makes it attractive.
If you prefer a no-fuss, easy-to-use cash back card, this one could be right for you.
For more details, visit the PenFed Power Cash Rewards page.
What Is Cash Back?
Cash back is a reward program offered by many credit cards, allowing you to earn a percentage of your spending back in the form of cash.
It’s a popular incentive for those looking to get more value from their daily purchases.
How Cash Back Works
When you use a cash back credit card, a small percentage of each purchase is returned to you as cash.
This percentage can vary depending on the card and the type of purchase.
For instance, you might earn 3% back on groceries, 2% on gas, and 1% on all other purchases.
At the end of each billing cycle, your earned cash back is usually added to your account.
You can often redeem this cash back as a statement credit, deposit into your bank account, or sometimes as gift cards.
Some cards even allow you to redeem your cash back for travel rewards or merchandise.
Be mindful of the card’s terms.
Some cards set a cap on the amount of cash back you can earn within a specific period.
Others require you to reach a certain amount before you can redeem your rewards.
Types of Cash Back Credit Cards
There are several types of cash back credit cards, each catering to different spending habits. Flat-rate cash back cards offer a consistent percentage back on all purchases, such as 1.5% or 2% on everything you buy.
These cards are simple and easy to use.
Category-based cash back cards offer higher percentages in specific categories that change quarterly or remain consistent.
For example, you might earn 5% back on groceries one quarter and 5% at gas stations the next.
Tiered cash back cards provide different percentages based on spending categories.
You could get 3% back on dining, 2% on groceries, and 1% on all other purchases.
These require a bit more attention to optimize your cash back.
Selecting the right card depends on your spending habits.
If you spend a lot in particular categories, a category-based or tiered card might be more beneficial.
For general use, a flat-rate card offers simplicity and consistency.
Advantages of Cash Back Credit Cards
Cash back credit cards offer numerous perks that can enhance your financial health and provide flexibility in how you redeem rewards.
Let’s look at the main advantages.
Financial Benefits
One of the main reasons to get a cash back credit card is the financial benefits.
You earn cash back on every purchase, which can help you save money.
For example, many cards offer a flat-rate cash back of around 1.5% to 2% on all purchases.
This means every dollar you spend earns you rewards.
Bonus categories are another great feature.
Some cards give higher cash back rates on specific types of spending.
For example, you might get 3% back on groceries or gas.
This can be particularly useful if you spend a lot in these areas.
Many cards also come with welcome bonuses.
These bonuses can be worth hundreds of dollars if you meet a spending requirement within the first few months.
Plus, cash back cards often have no annual fees, meaning you don’t have to pay to use the card.
Flexible Redemption Options
Another advantage is the flexibility in redemption options.
Cash back rewards can be redeemed in various ways, giving you the freedom to choose what works best for you.
One common option is taking the cash back as a statement credit.
This directly reduces your credit card bill.
You can also have the cash back deposited into your bank account.
This gives you more control over how you use the money.
Some cards even allow you to redeem rewards for gift cards or travel, though this may not be the most efficient use.
Using your cash back to buy merchandise or services is sometimes an option, too.
The simplicity of these options makes it easy to fit the rewards into your financial plans.
Common Pitfalls to Avoid
When using cash back credit cards, there are some common pitfalls that can reduce the benefits you get.
By being aware of these issues, you can make better choices and get the most out of your card.
High Interest Rates
Many cash back credit cards come with high interest rates.
If you carry a balance, the interest you pay can wipe out the cash back rewards you earn.
Always check the annual percentage rate (APR) before selecting a card.
To avoid this pitfall, try to pay your balance in full each month.
If you can’t, at least pay more than the minimum to reduce your interest charges.
Look for cards with low APRs or promotional 0% APR periods.
Keep in mind that cash back rewards are most beneficial when you avoid paying high interest.
Complex Reward Structures
Some cards have complicated reward structures.
For instance, they may offer different percentages of cash back on different types of purchases.
Keeping track of these categories can be confusing and might lead you to miss out on rewards.
To make things simpler, consider a flat-rate cash back card that offers the same percentage on every purchase.
If you do choose a card with varying rewards, try to match your spending habits to the categories.
For example, if a card offers higher cash back on groceries, use it primarily for your food shopping.
This way, you can maximize your rewards without getting tangled in a complex reward system.
Understanding these pitfalls can help you make better decisions and reap the full benefits of your cash back credit card.
Frequently Asked Questions
Looking for the right cash back credit card can get tricky with so many options out there.
That’s why it helps to know which cards give you the best rewards and which ones may not be worth your time.
What’s the biggest bang-for-your-buck cash back credit card with no annual fee?
The Chase Freedom Unlimited card is a strong contender.
It offers 5% on travel purchased through Chase, 3% on dining and drugstores, and 1.5% on all other purchases.
Plus, there’s no annual fee, making it a great all-around choice.
Which credit card offers a solid 10% cash back deal?
No commonly known cash back credit cards currently offer 10% cash back on general purchases.
Most cards that advertise high cash back rates limit these to small, specific categories and short-term promotions, usually with a cap.
Always read the fine print to understand the limitations.
How can I snag $200 with a new cash back credit card?
The Wells Fargo Active Cash® Card lets you earn a $200 cash rewards bonus after spending $500 in purchases within the first 3 months.
This card also comes with 2% cash back on all purchases, keeping things simple and straightforward.
Are there any top-tier credit cards out there that everyone should have?
The American Express Blue Cash Preferred is a top-tier option, offering 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), and 3% at U.S. gas stations and on transit.
It has an annual fee, but the rewards can easily outweigh the cost if you spend a lot in those categories.
Which card should I pull out when I need a bit of cash in my hand?
For cash advances, you’ll want to look for cards that have low fees and interest rates.
However, cash advances generally come with high fees and immediate interest charges.
The Discover it Cash Back offers a decent cash back program, but like most credit cards, it’s best not used for cash advances due to high costs.
What are some credit cards to steer clear of, especially for the younger crowd?
Avoid cards with high annual fees unless the rewards truly justify the cost.
Also, be cautious of cards with high interest rates, especially if you tend to carry a balance.
Cards with complicated reward structures can also be less beneficial for those new to managing credit.
Stick with straightforward options like the Bank of America Cash Rewards, which has no annual fee and flexible reward categories.