What Is the Best Card for Cash Back

All information about the Capital One Savor Cash Rewards Credit Card, U.S. Bank Cash+™️ Visa Signature®️ Card and Alliant Visa®️ Signature Credit Card has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.

A guide to cash back credit cards

With so many credit card offers on the market, it can be tough to decide which cash back card is going to give you the most value. To make it easier for you, our experts at CreditCards.com have pulled together the best cash back credit cards for every lifestyle. Choosing a credit card is an important financial decision, so we lay out the pros and cons for you all in one place.

Best cash back credit cards compared

Credit card	Best for	Cash back %	Annual fee	CreditCards.com rating
Wells Fargo Active Cash℠ Card	2% cash rewards	2% cash rewards	$0	3.7 / 5
Bank of America® Customized Cash Rewards credit card	Flexible cash back categories	3% on category of your choice Also 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	4.2 / 5
Blue Cash Preferred® Card from American Express	Groceries/ U.S supermarkets	6% at U.S supermarkets For the first $6,000 in purchases per year, then 1% cash back	$0 intro annual fee for the first year, then $95	4.0 / 5
Chase Freedom Unlimited®	Introductory APR on purchases	3% cash back on dining 5% cash back on grocery store purchases on up to $12,000 in first year (excluding Target and Walmart), 5% cash back on travel through Chase; 3% cash back on drugstore purchases; 5% cash back on Lyft purchases (through March 2022); 1.5% cash back on all other purchases	$0	4.7 / 5
Citi Custom Cash℠ Card	Automatically maximizing cash back	5% on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, then 1%	$0	4.1 / 5
Bank of America® Unlimited Cash Rewards credit card	Unlimited cash back for Preferred Rewards Members	1.5% cash back on every purchase	$0	3.3 / 5
Discover it® Cash Back	Cash back	5% in rotating categories On up to $1,500 in purchases quarterly, then 1% cash back, activation required	$0	4.5 / 5
Capital One SavorOne Cash Rewards Credit Card	Dining and entertainment	3% on dining, entertainment, popular streaming services and at grocery stores	$0	4.4 / 5
Chase Freedom Flex℠	Cash back on eligible travel	5% in rotating categories On up to $1,500 in purchases quarterly, then 1% cash back, activation required	$0	4.2 / 5
Citi® Double Cash Card	Flat rate cash back	2% 1% on purchases; 1% as you pay off the purchases	$0	3.5 / 5
Blue Cash Everyday® Card from American Express	Tiered cash back	3% at U.S supermarkets For the first $6,000 in purchases per year, then 1% cash back	$0	3.4 / 5
Capital One Quicksilver Cash Rewards Credit Card	Unlimited rewards	1.5% cash back on every purchase	$0	3.1 / 5
Discover it® Student Cash Back	Students	5% in rotating categories On up to $1,500 in purchases quarterly, then 1% cash back, activation required	$0	4.1 / 5
Upgrade Triple Cash Rewards Visa®	Home improvements	3% cash back on eligible home, auto and health payments 1% cash back on everything else.	$0	3.0 / 5

best cash-back credit cards of 2021

Editor's picks: Cash back credit card details

Wells Fargo Active Cash℠ Card: Best for 2% cash rewards

Why we picked it: The Wells Fargo Active Cash℠ Card lets you maximize earnings on everyday spending with its unlimited 2% cash rewards on purchases. That's pretty high for a card with no annual fee. And unlike similar cards in this space, the Wells Fargo Active Cash℠ Card offers an introductory bonus of $200 cash rewards when you spend $1,000 within the first three months. Another reason to consider this card: Qualifying balance transfers and purchase APR are set at a 0% introductory rate for 15 months from account opening, then 14.99% to 24.99% variable APR.

Pros: There are no rotating categories to keep track of and no enrollments required. Cash rewards never expire so long as your account remains in good standing. The card includes perks like cellphone protection and Visa Signature Concierge benefits at select hotel properties worldwide.

Cons: Those who fall at the higher end of the variable APR could be stuck with hefty interest charges if carrying a balance at the end of the introductory APR period. Ancillary benefits and card perks are limited compared to other cards.

Who should apply? Anyone looking for an uncomplicated way to earn rewards on routine spending will appreciate this unlimited cash rewards card from Wells Fargo.

Who should skip? If you're seeking a high-end suite of benefits, you'll likely find more value from other cards in this category.

Related: Wells Fargo Active Cash vs. Wells Fargo Platinum

Read our Wells Fargo Active Cash℠ Card review or jump back to this card's offer details.

Bank of America® Customized Cash Rewards credit card: Best for flexible cash back categories

Why we picked it: The Bank of America® Customized Cash Rewards credit card, you have the freedom to change your bonus category once per calendar month, allowing you to tailor your rewards to your spending habits. That's especially handy when your summer budget may skew more heavily toward gas or travel, but you spend more on online shopping during the holidays. Bonus categories include gas, online shopping, travel, drug stores, dining and home improvement/furnishings. If you plan ahead, this card can be exceptionally valuable, especially since there's no annual fee.

Pros: Cardholders earn 3% cash back on the category of their choice, plus 2% cash back at grocery stores and wholesale clubs (on first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%). There's a competitive sign-up bonus: Earn $200 if you spend $1,000 in your first 90 days. That amount matches the highest current cash back bonus, though some cards, like the Chase Freedom Unlimited®, have a lower required spend ($200 if you spend $500 in your first three months.) Bank of America customers with at least $20,000 across checking or savings accounts can qualify for a 25% to 75% rewards boost through the Bank of America Preferred Rewards program.

Cons: Rewards are limited to cash back. There's also a $2,500 combined spend cap on 2% and 3% reward categories for each quarter. Frequent travelers may be put off by the 3% foreign transaction fee and lack of travel benefits.

Who should apply? This straightforward cash back card offers plenty of flexibility for moderate spenders who prefer to change up their bonus categories every so often. Bank of America account holders should also consider this card, given the potential for a rewards boost.

Who should skip? Frequent travelers will need to consider the lack of travel benefits and the 3% foreign transaction fee this card carries.

Related: Is the Bank of America Customized Cash Rewards credit card worth it?

Read our Bank of America® Customized Cash Rewards credit card review or jump back to this card's offer details.

Blue Cash Preferred® Card from American Express: Best for U.S. supermarkets

Why we picked it: Offering supreme cash back rates (6% for up to $6,000 each year, then 1%) for purchases at U.S. supermarkets as well as 6% back on select U.S. streaming services, this card is a fantastic option for those who prefer their dinner and a movie at home. The introductory offer of a $300 statement credit after you spend $3,000 in the first six months of card membership is a great way to help pay for some of those groceries. Read more on how our expert, Brady Porche, uses the Blue Cash Preferred card.

Pros: The 6% cash back rate at U.S. supermarkets (for up to $6,000 each year, then 1%) is incredibly high. Plus, there are no rotating categories or enrollment to worry about, and rewards can be redeemed on past purchases. There's also a 12-month 0% introductory APR on purchases (then variable 13.99% to 23.99%).

Cons: Some may find the annual fee of $95 ($0 introductory annual fee for the first year) a tad steep, but it's worth remembering the high rewards rates. We estimate a Blue Cash Preferred cardholder needs to spend $3,200 per year on groceries (or $267 per month) to beat the Blue Cash Everyday® Card from American Express, which offers lower rewards in exchange for no annual fee. (Learn how to decide which Blue Cash card is right for you.)

Who should apply? Families, foodies, and anyone with a daily commute can benefit from this card's excellent cash back rates on groceries and gas.

Who should skip ?While this card comes with a $0 introductory annual fee for the first year, modest spenders could be deterred by the recurring $95 annual fee.

Related: Who should get the Blue Cash Preferred Card from Amex?

Read our Blue Cash Preferred® Card from American Express review or jump back to this card's offer details.

Chase Freedom Unlimited®: Best for introductory APR on purchases

Why we picked it: It's safe to say you have plenty of opportunities to earn cash back with the Chase Freedom Unlimited. You'll earn a standard 1.5% on all purchases, plus boosted rewards in practical everyday categories, including 5% cash back on grocery store purchases on up to $12,000 spent in the first year (excluding Target and Walmart), 5% cash back on travel purchased through Chase Ultimate Rewards, 3% cash back on dining, 3% cash back on drugstores and 5% cash back on Lyft purchases (through March 2022). As a welcome bonus, you can earn $200 after spending $500 on purchases within the first three months of opening an account. Read more on how our expert, Barri Segal, uses the Chase Freedom Unlimited card.

Pros: A newly spruced-up rewards model and a favorable cash back rate on general purchases make it easy to rack up rewards. Plus, there are no caps on cash back, and rewards don't expire. There's also a lengthy 15-month 0% introductory APR on purchases and balance transfers (then variable 14.99% to 24.74%).

Cons: There's no annual bonus, though that may not deter many considering the lack of rewards limits and the competitive return rate.

Who should apply? This is a solid rewards card for anyone hoping to earn cash back on everyday purchases, with generous bonus opportunities on Ultimate Rewards travel, dining and drugstore spending.

Who should skip? While this is a very versatile card, the lack of an annual bonus could be a turn-off for some.

Related: Is the Chase Freedom Unlimited worth it?

Read our Chase Freedom Unlimited® review or jump back to this card's offer details.

Citi Custom Cash℠ Card: Best for automatically maximizing cash back

Why we picked it: This no annual fee credit card from Citi lets you earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent (after that, 1% cash back). You also earn unlimited 1% cash back on general purchases. You don't have to enroll in rotating bonus categories or guess which category you might spend the most in to maximize your rewards. Instead, as your spending changes each billing cycle, your earnings adjust automatically. Eligible categories include restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment.

Pros: The card touts a generous sign-up bonus: Earn $200 in cash back (paid out in ThankYou points) after you spend $750 in your first three months of account opening. Plus, there's a 15-month 0% intro APR on balance transfers and purchases (variable 13.99% to 23.99%, after that).

Cons: The $500-per-billing cycle cap on your 5% cash back (then 1%) limits the card's value. (It's comparable to the $1,500 quarterly cap associated with popular rotating cash back credit cards that don't charge an annual fee like the Discover it Cash Back or Chase Freedom Flex.) You'll pay a steep 5% balance transfer fee (or $5, whichever is greater) if you take advantage of that offer.

Who should apply? If your spending habits tend to change from month to month and you don't want to worry about strategically using different credit cards to earn extra cash back, this Citi card is an option.

Who should skip? If you spend big on your selected 5% cash back category, this card's $500-per-billing cycle cap can limit its viability.

Related: Citi Custom Cash card rewards and benefits guide

Read our Citi Custom Cash Card review or jump back to this card's offer details.

Bank of America® Unlimited Cash Rewards credit card: Best for unlimited cash back for Preferred Rewards Members

Why we picked it: If you're an existing Bank of America customer with assets in savings, checking or investment accounts, you could come out ahead with this new cash back credit card, which offers 1.5% cash back on all purchases, plus a potential 25% to 75% rewards boost for Preferred Rewards members (actual value of the boost varies, depending on how much is in your Bank of America accounts).

Pros: On top of the base rewards, you can earn $200 online cash rewards after making at least $1,000 in purchases in the first 90 days of account opening. You can also take advantage of an introductory APR: 0% on purchases and balance transfers made in the first 60 days for 15 billing cycles, then 13.99% to 23.99% variable APR.

Cons: You'll need at least $20,000 across Bank of America and/or Merrill accounts to be eligible for any Preferred Rewards boost.

Who should apply? Bank of America customers with at least $20,000 across accounts may want to take advantage of the rewards boost the bank offers through its membership rewards program.

Who should skip? Unless you're a Bank of America Preferred Rewards member with a large balance across your checking, savings and eligible investment accounts, the card will likely fall short of other flat-rate cash back options.

Read our Bank of America® Unlimited Cash Rewards credit card or jump back to this card's offer details.

Discover it® Cash Back: Best for rotating categories

Why we picked it: With the Discover it Cash Back, you'll have the opportunity to earn a generous 5% cash back bonus on everyday, useful categories (up to $1,500 upon enrollment each quarter, then 1%) that rotate each quarter. Read more on how our expert, Ana Staples, uses the Discover It Cash Back card.

Pros: Discover will automatically match all of your cash back earnings at the end of the first year. There's a 14-month 0% introductory APR on purchases and balance transfers (then variable 11.99% to 22.99%). Discover has a few consumer-friendly policies attached to its popular credit cards, including no foreign transaction fees, a free FICO credit score and no fee for a first missed payment (up to $40 for any payment missed after that).

Cons: The 5% cash back rate is limited to $1,500 in combined purchases per quarter (then 1%). (If you anticipate spending more than that, consider a flat-rate cash back card like the Citi® Double Cash Card.) You don't get to choose bonus categories; Discover sets them each year. (See the Discover it Cash Back 2021 calendar.) You must remember to enroll each quarter in order to earn that bonus cash back.

Who should apply? If you're strategic enough in your spending to take advantage of its rotating bonus categories, the Discover it® Cash Back offers a lot of potential to maximize rewards.

Who should skip? As Discover sets a calendar for bonus categories each year, those who want to dictate their own spending will be unable to do so.

Related: Guide to Discover it Cash Back rewards and benefits

Read our Discover it® Cash Back card review or jump back to this card's offer details.

Capital One SavorOne Cash Rewards Credit Card: Best for dining and entertainment

Why we picked it: Capital One recently sweetened the rewards associated with both of its popular Savor cards. The SavorOne now offers a hefty 3% cash back on dining, entertainment, popular streaming services and grocery store purchases (excluding superstores like Target® and Walmart®), 1% cash back on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through January 2023 and a $200 welcome bonus after spending $500 on purchases within the first three months of opening an account.

Pros: The card doesn't charge an annual fee. Rewards don't expire for the life of the account and there are no limits on cash back.

Cons: Depending on how much you spend, you might be better served by the Capital One Savor Cash Rewards Credit Card. It offers higher rewards to the tune of 4% cash back on dining, entertainment and popular streaming services, 3% cash back at grocery stores and 1% cash back on other purchases, but charges a $95 annual fee. (Learn how to decide what Capital One Savor card is right for you.)

Who should apply? Foodies will like the SavorOne for its generous cash back on dining, grocery store purchases and entertainment purchases. Big spenders will appreciate the lack of spending caps for these categories.

Who should skip? Cardholders who prefer to put all their spending on one card might be better off opting for a card with a flat rate of cash back.

Related: Is the Capital One SavorOne Cash Rewards card worth it?

Read our Capital One SavorOne Cash Rewards Credit Card review or jump back to this card's offer details.

Chase Freedom Flex℠: Best for cash back on eligible travel

Why we picked it: The 5% cash back on travel purchased through Chase Ultimate Rewards® can really add up. You can also earn 5% cash back on eligible purchases in rotating categories (up to $1,500 per quarter with quarterly activation required, then 1%), 5% cash back on grocery store purchases on up to $12,000 spent in the first year (excluding Target and Walmart) and 3% cash back on drugstore purchases and dining at restaurants.

Pros: Reward rates are relatively high for a card with no annual fee. There's a lucrative sign-up bonus: earn $200 when you spend $500 in your first three months, a nice return for meeting a low spending threshold. You can also take advantage of a lengthy 15-month 0% introductory APR on purchases and balance transfers (then variable 14.99% and 24.74%).

Cons: If the idea of keeping track of all of the cash back categories and the rules that come with each makes your head spin, you might want to look for a different cash back card. That, along with remembering to enroll in the 5% bonus category each quarter, requires some attention and may not be ideal for everyone. If you're looking for something more low-maintenance, consider a flat-rate cash back card, like the Chase Freedom Unlimited. (Learn how to decide between the Chase Freedom cards.)

Who should apply? Frequent travelers can really benefit from the high cash back rate on travel purchases through Chase Ultimate Rewards®.

Who should skip? Individuals looking for a straightforward system for earning rewards will want to consider other options.

Related: Chase Freedom Flex benefits guide

Read our Chase Freedom Flex℠ review or jump back to this card's offer details.

Citi® Double Cash Card: Best for flat-rate cash back

Why we picked it: Offering 1% on general purchases (excluding gift cards) and then an additional 1% cash back as you pay off those purchases, the Citi Double Cash boasts one of the most competitive rewards rates of all cash back cards and is a clear standout among flat-rate cash back cards that don't charge an annual fee.

Pros: Cash back rewards can be converted to ThankYou points, which can be redeemed for travel purchases, gift cards and more for a rate of $1 cash back to 100 ThankYou points. Plus, there's a lengthy 18-month 0% introductory APR on balance transfers (then variable 13.99% to 23.99%).

Cons: There's no sign-up bonus. Also, the rewards expire if the card isn't used in more than 12 months. You'll pay an intro balance transfer fee of 3% or $5, whichever is greater, on balance transfers completed within the first 4 months of account opening.

Who should apply? This uncomplicated flat-rate cash back card would be a good match for someone who values flexibility, particularly for existing Citi customers already earning ThankYou points. The 18-month intro APR is also a solid option for anyone mulling over the idea of a balance transfer.

Who should skip? Anyone looking for a lucrative sign-up bonus will want to evaluate other options.

Related: Is the Citi Double Cash Card worth it?

Read our Citi® Double Cash Card review or jump back to this card's offer details.

Blue Cash Everyday® Card from American Express: Best for tiered cash back

Why we picked it: This card offers 3% cash back at U.S. supermarkets (up to $6,000 in purchases annually, then 1%), 2% at U.S. gas stations and at select U.S. department stores and then 1% on general purchases. Read more on how our expert, Ana Staples, uses the Blue Cash Everyday card.

Pros: As a welcome offer, you'll earn $200 in statement credits if you spend $2,000 with your card during your first six months of card membership. There's also a 15-month 0% introductory APR on new purchases (then variable 13.99% to 23.99%).

Cons: The yearly $6,000 limit on the 3% purchase category could cut into your potential earnings. Depending on your spending habits, you could earn more with the Blue Cash Preferred, which offers higher rewards, but charges a $95 annual fee ($0 introductory annual fee for the first year).

Who should apply? The Blue Cash Everyday is all about rewarding essential purchases, which is why it's a great addition to nearly anyone's wallet.

Who should skip? Bulk shoppers that stock up at superstores and wholesale clubs will also want to consider another card since these big grocery vendors don't count toward the Blue Cash Everyday's U.S. supermarket category.

Related: Is the American Express Blue Cash Everyday Card worth it?

Read our Blue Cash Everyday® Card from American Express review or jump back to this card's offer details.

Capital One Quicksilver Cash Rewards Credit Card: Best for unlimited rewards

Why we picked it: For those who prefer to keep it simple, this great gimmick-free card has no annual fee and offers unlimited 1.5% cash back on all purchases. Read more on how our expert, Ana Staples, uses the Capital One Quicksilver Cash Rewards card.

Pros: Rewards remain valid for the life of the account and there are no caps on how much you can earn. There's also no minimum you have to meet to start redeeming cash back. You can earn $200 if you spend $500 in your first three months of card membership. There's also a 15-month 0% introductory APR on purchases and balance transfers (then variable 14.99% to 24.99%).

Cons: While unlimited rewards are an attractive offer, note that the Citi Double Cash earns a higher flat-rate cash back at 2% (1% when you buy and 1% as you pay off the purchase) without charging an annual fee (though that card doesn't include a welcome offer).

Who should apply? While there are plenty of other cards out there offering much higher cash back rates, the unlimited 1.5% back on every purchase has the potential to offer major value for anyone in the market for a pared-down cash back card.

Who should skip? If you want to maximize your rewards earnings, there are many other cards out there with much higher earning rates.

Related: Capital One Quicksilver Cash Rewards benefits guide

Read our Capital One Quicksilver Cash Rewards Credit Card review or jump back to this card's offer details.

Discover it® Student Cash Back: Best for students

Why we picked it: This product is a top-notch student credit card: There is no annual fee and you can earn 5% cash back on rotating categories (then 1%; activation required each quarter and $1,500 limit each quarter), up to $300 a year on the 5% offer.

Pros: At the end of your first year, Discover matches your earnings to get up to $600. Plus, there's no annual fee and no foreign transaction fees.

Cons: For students who are new to credit cards, the rotating categories may be too confusing to use to their full potential.

Who should apply? This card is an ideal match for students hoping to establish credit while also earning cash back rewards.

Who should skip? Students looking for a no-frills method for earning rewards will want to seek out a more straightforward option.

Related: Is the Discover it Student Cash Back card worth it?

Read our Discover it® Student Cash Back review or jump back to this card's offer details.

Upgrade Triple Cash Rewards Visa®: Best for home improvements

Why we picked it: People with fair credit could potentially earn rewards with this card, which offers unlimited 3% cash back on eligible home, auto and health payments. Its big draw, however, is the unique payment structure, which lets you convert your remaining balances at the end of the month to a fixed-rate loan with a potentially low interest rate.

Pros: The card doesn't charge an annual fee, foreign transaction fees, late fees or a penalty APR.

Cons: You could wind up with a low interest rate – or you could wind up with a high interest rate, depending on your credit, given the card's wide APR range (variable 8.99% to 29.99% APR).

Who should apply? Anyone who spends frequently on home improvement projects can earn a best-in-category return on that spending (after making payment on those purchases). This card could also be a good fit for people with fair credit who are trying to improve their scores by demonstrating responsible use, given the unique payment structure and lack of common fees.

Who should skip? If you have good credit, you could qualify for more favorable financing in the form of a 0% introductory APR offer on purchases or balance transfers, and you're likely to qualify for a more lucrative rewards program, though that will at least partially depend on your personal spending habits.

Related: Guide to the Upgrade Triple Cash Rewards Visa

Read our Upgrade Triple Cash Rewards Visa® review or jump back to this card's offer details.

What are cash back credit cards?

Cash back credit cards are a type of rewards credit card. Unlike other rewards credit cards, which offer redeemable points or miles on purchases, cash back credit cards give a particular dollar amount of each eligible purchase back to the cardholder. Cash back essentially works like a rebate. Because reward points often come with a lot of restrictions in terms of how they can be redeemed, some people may prefer the simplicity of a cash back rewards card.

How do they work?

With a cash back credit card, you'll earn back a percentage of whatever you spend on eligible purchases. A flat-rate cash back credit card typically offers anywhere from 1% to 2% back on all purchases. Bonus category cash back cards offer higher rewards rates on purchases made in specific categories. These are typically rotating categories that require activation each quarter to earn the rewards. Don't want to deal with rotating categories or having to remember to activate bonus categories? Fixed bonus category cards (or tiered rewards cash back cards) also let you earn higher rewards rates in specific categories, but you won't have to wait until a certain time of the year, and no activation is required. Find out more about types of cash back credit cards.

When you redeem your cash back, you'll probably have several options. Most cards allow you to redeem your cash back as a statement credit, which will lower your credit card balance. Direct deposits to your bank account, gift cards and checks are also common redemption options.

You'll usually need at least fair credit to get a cash back card, so make sure you meet the credit requirements before applying. Cash back cards are best for people who can spend responsibly and pay their bill in full each month. If there's a chance you might carry a balance from time to time, you're probably better off with a low interest credit card.

Exactly how much cash you earn back per purchase will vary depending on the terms of your card and the type of purchase you make. Let's say you spend $500 each month in a category with a cash back rate of 5%. That means you earn $25 a month, just for card loyalty ($500 X 0.05 = $25). Sometimes there are spending limits, which is why it's important to read through a card's terms before applying.

Read our full guide to how cash back credit cards work to learn more.

Types of cash back credit cards

Types of cash back categories

It's important to choose a cash back credit card that aligns with the categories you spend on most frequently. Here are some examples:

Restaurants. Whether you enjoy dining out or take out, many cash back cards are designed with foodies in mind to maximize spending at your favorite restaurants.
Grocery stores. Cards that offer cash back on grocery store purchases are perfect for families or anyone that enjoys home cooking.
Gas stations. Getting cash back at the pump can be especially rewarding for frequent drivers. Cards that offer cash back rewards at gas stations can be a great credit building tool as well.
Retailers. Loyal shoppers of companies like Amazon, Walmart and Target can receive cash back on online purchases when equipped with the right card.
Fitness. If you work out at a gym or fitness club membership, some cards offer cash back rewards on membership payments.
Streaming services. Binge-watchers of services like Netflix, Hulu and Disney+ can receive cash back rewards on their subscription payments when using certain credit cards.

Pros and cons of cash back cards

Cash back credit cards are a popular type of rewards card, given their return on spending and ease of use. But, depending on your financial goals, they're not always the best fit for your wallet. Understanding the big draws and disadvantages of cash back credit cards can help you pinpoint if one is right for you.

Pros

Flexibility. Earning and redeeming rewards is generally straightforward and easy to master. You can typically cash in rewards as a statement credit and there are low-to-no minimums for redemption across popular cards.
Affordability. Many cash back cards carry low-to-no annual fees.
Easy welcome offers. Cash back sign-up bonuses tend to have low spending requirements. For instance, some cards let you score bonus points by spending as little as $500 in your first three months. Travel credit card spend requirements tend to run much higher.

Cons

Pricey APRs. Cash back credit cards are rewards credit cards, meaning their APRs tend to be higher than no-frills credit cards. As such, they're not ideal for people prone to carrying a balance.
Limited value. You can't really stretch the value of cash back in the same way you can stretch the value of travel points or miles. For instance, you generally can't transfer to or pool rewards with airline partners.
Less lucrative sign-up bonuses. Cash back sign-up bonuses are generally less lucrative than the big sign-up bonuses you see associated with travel or business credit cards.

How to choose a cash back credit card

Who should get a cash back credit card

The strategic spender. If you're aiming to maximize cash back earnings, you can combine the strengths of flat-rate and tiered cards. With this helpful strategy, pair a credit card that offers a high rewards rate for your large, frequent purchases with a straightforward flat-rate card to cover everything else.
The minimalist. Those who strive for simplicity can see a lot of benefit from a good cash back credit card. A flat-rate cash back credit card that carries no annual fee is a great choice for someone who wants to earn rewards without much additional thought. Certain cards in this category can help you "set and forget" by automating bill payments and reward redemptions.

Who should skip a cash back credit card

The luxury traveler. While cash back is relatively universal, frequent travelers may want to consider a travel, airline or hotel credit card that offers high-end perks and discounts when booking with their favorite travel brands.
The overspender. The concept of getting cash back on all or most of your purchases is enticing, but it may tempt you to spend more than necessary, especially if you anticipate carrying a balance from month to month.

Read more on factors to consider when choosing a cash back credit card.

How to make the most of your cash back credit card

Match yourself with a card that best suits your spending habits .Before you choose a card, take a hard look at your budget and identify the areas where you're spending the most. If a good portion of your budget goes towards groceries, it makes sense to seek out a card that offers a high cash back rate for supermarkets. If in the course of a month you spend a lot of money on a broad range of purchases, a flat-rate card with no cap might offer you the best value.
Strategize spending on bonus categories .With some cards offering cash back rates from 4% to 6% in the higher ranges, bonus categories can be an enormous boon to your rewards earnings. But rotating bonus categories aren't always easy to keep track of, especially when spending across multiple credit cards. Luckily, many credit cards release bonus categories annually or sometimes quarterly, which gives you a time to strategize. Match these categories with your personal calendar, identifying occasions where you're most likely to spend such as birthdays, holidays, vacations and weekend getaways.
Pair cards to fill in reward gaps .Even the most robust rewards program will have its limitations. You can fill in those gaps by adding another card in your rotation. Let's say you have a great flat-rate cash back card like the Citi Double Cash Card and earn 2% on general purchases (1% when you buy combined with an additional 1% cash back as you pay off those purchases) but feel like you're missing out on potential travel rewards. With its 5% cash back on travel (purchased through Chase Ultimate Rewards® ), the Chase Freedom Flex would provide much more value when booking travel.

Are cash back credit cards worth it?

The right credit card for you will depend on a number of factors, including your spending habits, ease of use, and finding a card with the features that matter most to you. To help you decide if a cash back credit card is right for you, take a moment to answer the following questions:

Where do you spend your money? Before deciding on a card, evaluate your spending habits over the past few months. If they aren't concentrated on one particular category, you'll want to opt for a flat-rate card for all eligible purchases. If you spend mostly at restaurants, large retailers or grocery stores, you'll want to consider a card with tiered or rotating categories to maximize your rewards.
How much effort is required? While cards with rotating categories can be quite rewarding, you'll likely have to activate them quarterly. Plus, tiered cards often feature spending limits on highly rewarding categories. If you don't want to deal with these elements, a straightforward flat-rate card may be your best option.
Are you looking for premium perks and rewards? Many cash back cards do not charge an annual fee, but those that do typically have higher cash back rewards rates that can help cardholders recoup the cost of the annual fee, but you'll want to strategize to be sure you'll earn enough rewards to do so. Plus, these premium cards often require a good-to-excellent credit score.
Do you pay your balance in full each month? Before applying for a cash back credit card, take a look at your financial situation. If you carry a balance each month you'll be subject to interest charges, which usually outweighs the benefits of earning cash back.

Holiday shopping can be a stressful experience: The crowds, the spending and the myriad choices can be downright overwhelming. It's no wonder 62% of people surveyed in CreditCards.com's recent poll said they planned on making their purchases online. That figure, which represents more than three out of five shoppers, is down from 71% in 2020 but up from 51% in 2019. The most common reasons for shopping online include convenience (70% of shoppers who plan on making most of their purchases online), avoiding lines and crowds (62%), getting better deals and prices online (46%) and fear of COVID-19 (45%).

Of the 38% of shoppers who said they will make in-person purchases, the most common reason was being able to touch and see merchandise (67%), followed by immediate access to purchases (45%) and then supporting local businesses (44%). While entirely rational concerns exist about COVID-19 and inflation, many experts, such as Ted Rossman, senior industry analyst for CreditCards.com, think this will be a strong holiday shopping season for retailers. "Most Americans have boosted their savings and paid down debt over the past year and a half, and there's still a lot of pent-up demand and a desire for a happy, traditional holiday season," he said.

If you plan on shopping online this holiday season, perhaps consider using a cash back rewards credit card to maximize your purchases and rack up rewards. Cash back cards can permit you to build a financial reserve for gift giving, large purchases or even an additional windfall for after the holiday season. Plus, you can gain additional rewards when buying groceries in preparation for a holiday meal or at the gas pump if you plan on visiting friends or family. Also, individuals planning on supporting a local business or charity can use cash back proceeds towards a gift card or donation.

Wherever you choose to do your holiday shopping, safety should always be a prime consideration. While online shopping has gotten a lot safer, there are still a lot of scams, threats and disreputable websites out there — meaning that you still need to be aware of how to shop online safely. Here are some tips to ensure you can shop online safely during the holidays:

One of the best ways to shop online safely is to stick to major retailers, which have the infrastructure in place to ensure that your transactions are as secure as possible.
Make sure you only make online purchases on a private, password-protected Wi-Fi network. And if you can't access your home Wi-Fi network (or are online shopping while you're out and about), use your phone's data plan instead of connecting to public Wi-Fi.
Consider setting up a virtual wallet. When you use a digital wallet to make online payments, your credit card data is both encrypted and tokenized, meaning that no actual credit card numbers are shared during the online transaction.
Set up mobile credit card alerts to help you track your purchases and keep an eye out for potential fraud. While most credit card issuers will automatically notify you when a purchase appears fraudulent, mobile alerts provide an extra layer of protection by allowing you to monitor your credit card transactions in real time.

Read about more findings from our holiday shopping poll.

How we picked the best cash back credit cards

Cash back rate and categories :Of course, the best cash back credit cards make it easy to earn cash back. That's why we chose credit cards that offer high rewards rates on common purchases. We understand that "everyday spending" looks different for various lifestyles, so we chose a variety of bonus categories, from travel to groceries to entertainment.
Redemption options: What's the use of cash back if you can't redeem it in a way that's valuable to you? Most cash back cards allow the option to redeem as a statement credit, but some also allow you to redeem as a bank direct deposit, gift card, charitable donation or even a credit toward a loan balance. Since these alternative redemption methods can sometimes add value to your cash back earnings, we weighed all methods of redemption. We also considered ease of redemption since some cards require a minimum cash back balance in order to redeem.
Sign-up bonus :When analyzing a credit card's overall value, we always think long-term: ongoing rewards rate, fees, etc. But a sign-up bonus is a nice way to kickstart your cash back earnings. The ideal sign-up bonus rewards you generously for a low spending threshold.
Rates and fees :Here, we dug into a few costs that may cut into the card's potential value. When assessing cards with annual fees, we did the math to ensure that cardholders' cash back and other benefits could likely surpass that cost. We also avoided cards with sky-high interest rates.
Miscellaneous benefits and features :Additional perks and benefits are rarely the main attraction, but they can be tie-breakers when comparing two similar offers. Features like auto rental insurance and price protection are often overlooked but can save you hundreds if you remember to use them.

Additional information on cash back credit cards

For more information on all things cash back cards, continue reading content from our credit card experts:

Cash back credit card mistakes to avoid
Cash back vs points: Which is best for you?
Are cash back debit cards worth it?

Tracy Stewart

Tracy Stewart is a personal finance writer specializing in credit card loyalty programs, travel benefits, and consumer protections. He previously covered travel rewards credit cards, budget travel, and aviation news at SmarterTravel Media. His money-saving tips have appeared in the Washington Post, the Wall Street Journal, Consumer Reports, MarketWatch, Vice, People, the Zoe Report and elsewhere.

About the Editor

Jeanine Skowronski

Jeanine Skowronski is a credit card expert, analyst, and multimedia journalist with over 10 years of experience covering business and personal finance. She has previously served as the Head of Content at Policygenius, Executive Editor of Credit.com, Deputy Editor at American Banker, Staff Reporter at TheStreet and a columnist for Inc. Magazine.

About the Reviewer

Jason Steele

Jason Steele is a professional journalist and credit card expert who has been contributing to online publications since 2008. He was one of the original contributors to The Points Guy, and his work has been appearing there since 2011. He has also contributed to over 100 of the leading personal finance and travel outlets. He's frequently interviewed and quoted by mainstream outlets on the subjects of credit cards and travel. Jason is passionate about travel rewards credit cards, which he uses to earn rewards that he can redeem for him and his family to travel around the world. Jason is also the founder and producer of CardCon, a conference for credit and credit card journalists that's held annually.

What Is the Best Card for Cash Back

Source: https://www.creditcards.com/cash-back/