There are many cash back services available on the market, each with its own rewards program and benefits. Many people try these services as it helps to save a lot of money.
Thus, if you are like many others who don’t know which cash rewards credit card to choose, or what cash back on one of the cards, check out this article. To help you navigate this crowded landscape, we’ve compiled a list of the best cash-back cards of 2024.
From highest cash back rates to lowest fees and great perks, these cards will help you get the most out of your spending. So, whether you’re a traveler or a shopper, a cash rewards credit card type from this list will be perfect for you. So, let’s dive in and explore the top cash back credit cards.
What Are Cash-Back Credit Cards?
Cash-back credit cards are credit cards that reward you for making purchases. The rewards are the percentage of your spending in the form of cash back. The amount of cash back you’ve earned varies depending on the card and the purchase. On average, you can expect a cash back percentage between 1% and 5% (150 cash back on your first $1,000+ purchase).
These cards are often a great option for people who want to use the cash back earned rewards on their everyday purchases at different places and prefer cash back over points or miles. In addition, some cash-back credit cards provide additional perks such as no annual fees or sign-up bonuses.
How Does Cash Back on a Credit Card Work
Cash back on purchases works as a credit card reward system for its cardholders. They give a certain percentage of the users’ spending in the form of cash back. The cash back percentage varies depending on the card and the purchase category.
The cash back in the category options include groceries, gas, or cash back on dining (cash back at restaurants). For example, a card can offer 250 statement credit cash back on every purchase, which means you will pay $250 less than it could. The cash back benefits accumulate over time.
You can also redeem cash back in various ways. It includes a deposit to a bank account, a check, or a statement credit after you spend on purchases. Some credit cards can also offer a 200 cash bonus for signing up or meeting certain spending thresholds within a specified period. You should also know that cash back bonuses are not unlimited and may have expiration dates.
Read More: What Are Cashback Rewards, and How Does Cash Back Credit Card Work?
Why Do Credit Cards Give Cash Back?
Credit cards offer cash back to encourage customers to use them more often. Another reason is to compete with other credit cards on the market. Here are five reasons why credit cards give cash back.
- Attract new customers. Credit card companies use cash back rewards to get new customers interested in signing up for their cards.
- Encourage card usage. By offering cash back, credit card companies encourage cardholders to use their cards for purchases and earn rewards.
- Retain customers. Cash back bonuses can help keep customers loyal to a particular credit card.
- Compete with other cards. Cash back rewards are a way for credit card companies to compete with other cards in the market. As customers may choose a credit that provides the best rewards for their spending habits, companies try such options as cash back.
Types of Cash Back Credit Cards
There are several kinds of cash back credit cards, each with unique features and rewards. First, this section will explore the different types of double cash card options available in the market, including flat-rate cash back, tiered cash back, and rotating categories.
Next, we’ll look closer at each type of cash rewards credit card. It will include how much cash back there is, how each of them works, and which ones give the most cash back.
Flat-Rate Credit Cards
Flat-rate credit cards give consistent cash back on all other purchases and automatically match all the cash back categories. These cards typically offer a flat cash back rate at U.S of 1.5% or 2%. However, some cards may offer higher rates.
A flat-rate card is a great option for people who want a simple rewards program without having to worry about bonus categories or spending caps.
This card also is ideal for those who don’t spend heavily in any particular category, as they offer consistent cash back on all other purchases.
Flat-rate credit cards are a popular choice for those who prefer simplicity regarding a credit card that earns cash back.
Rotating Category Credit Cards
Rotating category credit cards give unlimited cash back with higher rates on specific categories of purchases that rotate quarterly. These cask back on one of the following categories: groceries, gas, restaurants, or even department stores.
Cardholders typically need to activate the bonus categories each quarter to earn a higher rewards rate.
These cards are a great option for people who spend heavily in the bonus categories. Simply keep track or remember and cash rewards always be in time for you
The downside is that the cash back rate is only temporary, and the bonus categories may not align with a cardholder’s spending habits every quarter.
Rotating category credit cards are a popular choice for those who enjoy earning higher rewards on different categories throughout the year.
Tiered-Rate Credit Cards
Tiered-rate credit cards provide different cash back rates depending on the purchase category.
These cards typically offer higher reward rates on specific categories, such as cash back on select U.S groceries, gas, or cash back on drugstore purchases, while offering lower cash back on all other purchases. Some tiered-rate cards may also show bonus categories that rotate every quarter.
These cards are a good option for people who spend heavily in specific categories and want to earn higher rewards on those purchases. However, they may not be the best choice for those who spend evenly across multiple categories.
Tiered-rate credit cards are popular for those who want to maximize their rewards on specific spending categories.
Read More: Best Credit Card With Sign-Up Bonus in 2024
Common Cash Back Categories With Unlimited Cash Back
Many credit cards with cash back after you spend money on purchaces offer bonus categories allowing cardholders to earn higher rewards rates on specific purchases.
Bonus categories vary by the card owner and may change from time to time. However, here are some common cash-back bonus categories that you may find on various credit cards.
- Groceries. Many cash back credit cards give higher reward rates on grocery purchases, making these cards a great option for those who spend a lot on groceries. For example, you may purchase something for $300, but having 250 statement credit, you will only pay $50. Bonus rates for grocery purchases often range from 2% to 6% or more.
- Gas. Some cash back credit cards provide better cash back on gas purchases. If you spend a lot on gas, a card with a higher cash back rate on gas purchases can help you save money. Bonus rates for cash back on eligible gas purchases can range from 2 percent to 7 back each month
- Dining. Many credit cards have greater cash back rates on dining purchases, including restaurants and fast food. Bonus rates for dining purchases can range from 2% to 4%.
- Travel. Some best hotel rewards credit card with no annual fee give cash back on travel purchased, including airfare, hotels, and rental cars. Cash back on travel booked can range from 2% to 5%.
- Entertainment. Some cash back credit cards have higher rewards for entertainment purchases, including cash back on capital one entertainment (using capital one quicksilver cash rewards credit card), concerts, and sporting events. Bonus rates for entertainment purchases can range from 2% to 5%.
- Online shopping. Some cash back credit cards give bonus rewards for online purchases, cash back on purchases made on popular websites such as Amazon and Walmart. Bonus rates for online shopping often range from 2% to 5%.
- Home improvement. Some cash back credit cards give higher reward rates on home improvement purchases, including purchases made at home improvement stores like Home Depot and Lowe’s. Bonus rates for home improvement purchases can range from 2% to 5%.
It’s important to note that bonus categories may change occasionally and have restrictions or limitations, such as spending caps or specific merchants that qualify for the bonus rate.
In addition, before applying for a cash back credit card, you should read the terms and conditions of the selected credit card. It will ensure that the card fits your spending habits and preferences.
Read More: Best Credit Cards for Groceries 2024
Pros and Cons of Cash Back Card
| Pros | Cons |
| Rewards. The primary advantage of cash back credit cards is the ability to earn rewards on purchases. Cardholders can earn cash back on every purchase, which can help offset the purchase cost or provide extra savings funds. | High interest rates. Cash back credit cards typically have the highest cash back price. Sometimes it can negate the value of the rewards if you carry a balance. |
| Flexibility. Cash back rewards can be used for a variety of purposes, such as statement credits, direct deposits, or even travel. Such flexibility allows cardholders to choose how they want to use their rewards. | Annual fees. Some cash back credit cards come with annual fees, which can eat into the value of the rewards. If you’re considering a card with an annual fee, make sure the rewards and benefits outweigh the cost. |
| Bonus categories. Many cash back credit cards have bonus rewards for specific categories, such as groceries, gas, or dining. This can help cardholders earn even more rewards on their everyday spending. | Limited redemption options. Some cash back credit cards may limit the amount of rewards you can earn in bonus categories. That can be frustrating if you spend a lot in those categories. |
| Signup bonuses. Cash back credit cards often come with signup bonuses that can provide a significant amount of rewards upfront. This can be especially valuable if you have a large purchase coming up. | Rewards caps. Some cash back credit cards may limit the rewards you can earn in bonus categories. It can be frustrating if you spend a lot in those categories. |
| No annual fee options. Many cash back credit cards come with no annual fees. It makes them a great option for those who want to earn rewards without paying extra fees. | Temptation to overspend. Cash back rewards can sometimes be tempting. However, they can also encourage overspending if you’re not careful. |
When deciding whether to get a cash back credit card, weighing the advantages and disadvantages is essential. Consider researching and comparing various cards to find the one that aligns with your spending habits and preferences.
How to Choose a Cash Back Credit Card
Choosing the best cash-back credit card can be overwhelming when it is the first time to get such type of card. Here we will provide answers to the general questions that are connected with choosing and applying for getting a cash reward card.
What is Your Credit Score?
A credit score is a number that shows creditworthiness. This number changes based on your credit history. It ranges from poor to excellent credit scores (300 to 850), with higher scores indicating better creditworthiness.
A credit score below the average score-600 can negatively affect your chances of getting approved for services. Such services include: credit cards, loans, and other financial products.
If you want to get a cash back credit card, you need to understand that your score matters a lot in the approval decision. When you apply, the bank will look at your score, which could affect the approval decision.
How Much Will the Card Cost?
You should consider the costs associated with the card when applying for a cash back credit card. Some cash reward card options charge annual fees ranging from $0 to several hundred dollars per year.
Additionally, some cards can have fees for foreign purchases and balance transfers. They can add up such fees over time, so, read the terms and conditions carefully.
What Spending Category is Most Important to You?
You should consider which spending category is most important to you. Some cards have greater cash back bonuses for specific categories such as gas, groceries, dining, or travel.
If you frequently spend in one or more of these categories, a card that provides cash back bonuses for those categories might be a good fit for you. By understanding your spending habits, you can get the best cash back credit card that offers the most value for your money.
How Much Time Do You Want to Devote to Your Cash Back Card?
You should consider how much time you can spend to manage your card. Some cards require more attention, such as tracking spending categories and activating bonus offers each quarter. Other cards have a flat-rate cash back bonuses program requiring less time and effort.
Read More: Best Low Interest Credit Cards of 2024
How to Maximize Your Cash Back Reward
Maximizing cash back rewards can help you save money and earn more rewards on your purchases. You can make the most of your cashback card by taking advantage of the benefits.
In this section, we will discuss tips to help you increase your cash back on everyday purchases.
- Choose the right card for your spending habits. Look for a card that offers greater cash back bonuses in categories where you spend the most.
- Take advantage of sign-up bonuses. A lot of cash back credit cards provide sign-up bonuses. It is a bonus cash back when you buy you spend a certain amount of money within the first months after opening the account. For example, you can get a 200 online cash rewards bonus back on the first spending of $1,000 in the first 3 months.
- Use your card for everyday purchases. Use your card for all of your everyday purchases. It can include groceries and gas to earn cash back bonuses on every dollar you spend
- Pay your balance in full each month. Avoid carrying a balance on your cash back credit card to avoid interest charges and maximize your rewards potential.
- Take advantage of bonus categories. Some cash back credit cards have bonus categories that change each quarter. Make sure to activate these categories and use your card for cash back on all purchases in those categories to earn bonus cash back.
- Use your card for online shopping. Many cash back credit cards have bonus cash back on all other purchases made through their online shopping portal.
- Redeem your rewards strategically. Consider purchases and balance transfers for statement credit, direct deposit, or gift card, depending on which option offers the highest redemption value.
- Keep track of your rewards. Monitor your cash back bonuses and redeem them before they expire.
By following these tips, you can maximize the rewards potential of your cash back credit card.
How to Compare the Best Cash Back Cards
Before deciding which credit card you need, comparing the available options is essential. You will find the credit card that best fits your needs by comparing available options. Here are some factors to consider when comparing cash-back credit cards.
- Cash-back rate.
- Sign-up bonus. Many cash-back credit cards have a sign-up bonus. It can give you significant cash back if you meet the requirements.
- Annual fee. Some cash-back credit cards charge a yearly fee, so factor that into your decision.
- Redemption options. Consider the purchases and balance transfers option available for redeeming your cash back, such as statement credit, direct deposit, or gift card.
- Credit score requirements. Check the credit score requirements for each card, as some may require a higher score than others.
- Additional perks. Some cash-back credit cards come with other extras, such as travel insurance, extended warranties, or purchase protection.
By considering these factors and comparing different cash-back credit cards, you can find the one that offers the best rewards and benefits for your spending habits and financial goals.
Does Cash Back Expire?
In most cases, cash back bonuses on credit cards do not expire. However, double-checking the terms and conditions of your current or potential cash back credit card is great idea. It will ensure that you understand any expiration dates or restrictions that may apply.
Some credit cards may have expiration dates or requirements, such as a minimum amount of cash back that must be earned before being redeemed. Additionally, any unredeemed cash back bonuses may be forfeited if you close your credit card account.
Staying on top of your cash back rewards and knowing any expiration dates or redemption requirements is essential. Some credit card issuers may offer different purchases and balance transfers option for redeeming cash back bonuses.
It includes statement credit, direct deposit, or gift card. It’s a good idea to regularly review your rewards balance and consider redeeming them before they expire or become forfeited.
Read More: I Need Money Now: 10+ Best Ways To Get Quick Cash
Bottom Line
To conclude, choosing the right cash back credit card can help you earn cash back on all purchases. Consider your credit score, spending habits, and annual fees. Make sure to use your card responsibly and use your cash back each month after using it in full.
Make sure to read the terms and conditions of any credit card you’re considering. Finally, with our tips, you can make the most of your cash back credit card. Keep these tips in mind when comparing and using cash back credit cards.
Sources Used in Research for the Article:
- What is a credit score, Consumer Financial Protection Bureau, https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-score-en-315/
- Credit Scores, Federal Trade Commission, https://consumer.ftc.gov/articles/credit-scores
- Your Credit History, Federal Trade Commission, https://consumer.gov/credit-loans-debt/your-credit-history