Cash-back credit cards offer some of the most valuable benefits consumers can want. Their rewards are extremely flexible — you can use cash for just about anything — and many of the best cash-back credit cards don’t charge an annual fee. And, if you’re looking for an introductory 0% APR promotion, you’re more likely to get it with one with a popular cash-back credit card than with a card that offers points or miles.
>>CASH BACK: Save Money With the Best Gas Credit Cards
Finding the best rewards credit card for you can be time-consuming if you don’t know where to look. To help, we’ve put together a list of the best cash-back credit cards to make it easier to narrow down your search.
Best Cash-Back Credit Cards of September 2020
There’s no one credit card out there that’s best for everyone. The right one for you depends on your preferences and spending habits. Here are our top choices:
*Review the methodology our credit card experts use to determine the best credit products in various categories.
*Jump to frequently asked questions about cash-back credit cards.
1. Best Credit Card for Groceries: Blue Cash Preferred® Card from American Express
2. Best for Dining and Entertainment: American Express® Gold Card
3. Best for No-Annual-Fee: Chase Freedom Unlimited®
4. Best for Choice of Cash Back: Bank of America® Cash Rewards credit card
5. Best for Balance Transfers: Blue Cash Everyday® Card from American Express
6. Best for Sign-Up Bonus Offer: Bank of America® Premium Rewards® Credit Card
Methodology: How We Select the Best Cash-Back Credit Cards
We chose our best cash-back credit cards based on the total value they offer based on certain spending categories, preferences (flat rate versus rotating categories), sign-up bonuses and other features. Because everyone has a different idea of what they want from a credit card, we included as many different angles as possible.
While most cash-back credit cards don’t charge an annual fee, we included a few that do, but only because they offer enough value to make up for the fee on an ongoing basis. As you consider which card is right for you, compare these cards, as well as other top credit card offers, to make sure you get the best fit for you.
Frequently Asked Questions About Cash-Back Credit Cards
Are you ready to start saving money on groceries, gas, travel, dining and just about any other place you spend money, but you’re still uncertain about how cash-back credit cards work? No problem! Scroll through some of the most common questions people have about cash-back credit cards.
How Cash-Back Credit Cards Work
Unlike travel rewards credit cards, you don’t have to be a pro at playing the credit card game to benefit. Cash-back cards are easy to keep track of and user-friendly. These types of cards typically fall in one of the following categories:
- Flat Rate: A flat rate card usually offers 1.00–2.50% back on all purchases, whether you buy a trip to Italy or a gallon of milk. The benefit of flat-rate cash back is that you can keep a minimal wallet and have an easier time keeping track of your credit card spending.
- Tiered: Tiered cards vary the cash-back rewards based on what you purchase. A tiered card might offer a flat 1% cash back on the majority of purchases and 3% back on gasoline spending. Many times, the higher-earning tier is capped. A tiered card can help you earn more, as long as you select a card that rewards you the most for what you spend the most on.
- Rotating Categories: Credit cards with rotating cash-back categories usually have a set 1% cash-back rate and then a higher rate, like 5% back on select categories. These categories rotate with the quarters of the year. For example, you might earn 5% back on all grocery purchases in the first quarter of the year.
Common Cash-Back Categories
New credit cards are released frequently and some like to gain attention with attention-grabbing cash-back offers, like offering 6% back for your favorite streaming service. Most cards, however, offer cash-back perks in the same core categories:
- Gas stations
To find the best cash-back credit card, you need to keep track of your spending. Where do you spend the most money? If you spend more money on restaurants than groceries each month, then look for cards that will give you more back for dining out. If your spending is even throughout the cash-back categories, then a higher, unlimited, flat-rate, cash-back card might be a better choice for your finances.
Cash-Back Credit Cards Versus Travel Credit Cards
Cash-back credit cards and travel cards are very similar. With travel-branded credit cards, you will earn more back when you spend on travel-related purchases, such as airfare or hotels. Most travel cards also offer the best reward rate when you redeem your rewards toward travel, either through the credit issuer’s travel platform or by transferring points to a travel partner.
Many times, redeeming travel rewards card points for cash means you are getting a lower cash-back rate. It is wise to know how far points will go toward travel versus cash before redeeming them. Travel credit cards can also come with more travel perks, such as access to airport lounges or travel insurance. With these perks can also come annual fees, so it is best to weigh the fee with the perks before signing up.
When trying to decide which card is best for you, consider how much travel you plan on doing. If you love the idea of traveling but aren’t gung-ho to explore the world just yet, a cash-back card might be an easier card to start with.
How To Compare Cash-Back Credit Cards
Not all cash-back credit cards are the same. The card that your friend can’t stop raving about might not be a good fit for your spending habits. Here’s what you need to look at before deciding which card is for you:
- Annual Fee: If the card has an annual fee, is it worth paying? Some annual fees seem expensive up front, but when you consider how much cash back you receive, along with other perks, you might realize it is worth paying. Remember, even if a card has $1,000 worth of perks that make a $250 annual fee seem worth paying for, it is only worth it if you actually use those perks.
- Bonus Offer: Sign-up bonuses sweeten the pot. However, make sure you can afford to meet the sign-up bonus. If spending $4,000 in three months will put you into financial hot water, look for a card with a lower bonus offer spending requirement.
- Redemption: How easy is it for you to redeem your cash back? Look for cards that make it easy to transfer your rewards back to your bank account or that will allow you to spend them on Amazon for the same redemption rate.
- Intro APR: Looking to make a big purchase up front? A 0% intro APR can save you money on interest and give you more time to pay off your purchases.
- Special Features and Benefits: Do the cards come with special perks that will save you money throughout the year?
- Ongoing Rewards: Look for cards with regular opportunities to earn more back rather than choosing a card that only has amazing rewards during the first year.
Pros and Cons of Using a Cash-Back Card
Everything in life has its pros and cons, and cash-back cards are no different. Consider these points before making your decision:
- Simplicity: Cash-back cards are easy to keep track of and it is quick to convert your rewards to cash back in your bank account.
- No or Low Annual Fees
- Low Bonus Requirements: You won’t have to dish out a lot of cash to get the sign-up bonus.
- Builds Credit
- Lack of Travel Benefits
- Cash Back Can Expire: Some cards say cash back never expires but this is only true if you use your card regularly.
- Low Sign-Up Bonuses: While you won’t have to spend a lot up front to earn the bonus, the sign-up bonus is also a lot smaller than what popular travel cards offer.
- Fewer Perks
How To Make the Most of a Cash-Back Card
Once you have decided on the right cash-back card for your wallet, you want to make sure you get the most out of the card. Here are a few tips to increase your perks after approval:
- Plan to get the bonus. Divide the spending requirement by the sign-up bonus time frame to ensure you are spending enough each month. For example, if you must spend $3,000 in 90 days, plan how you will spend $1,000 each month without messing with your budget.
- Use the shopping portal. Don’t forget to browse the card issuer’s shopping portal to increase how much cash back you can receive on a purchase. If you were already planning to send your mom flowers for Mother’s Day, you might as well use a vendor through the shopping portal that is offering 10-15% cash back when you use your card.
- Look for rewards bonuses and multipliers. Keep your eye on special rewards bonuses offered throughout the year. For example, some cards were giving a $100 credit for spending $500 on select cruises.
- Take advantage of rotating bonus categories. If your card offers rotating bonus offers, then spend a few minutes of planning to capitalize on them each year. For example, if your first quarter bonus category is 5% for groceries, consider spending more on groceries during those first three months. Buy extra pantry staples and meat to deep freeze, so that you can shop less in the months to come.