Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank’s website for the most current information.
Author: Barry Bridges | bbridges@bankrate.com
Bankrate helps you cash in on cash back credit cards
Looking to earn cash back on credit card purchases? We can help you pick the right card for it. Before you make your decision, take a look at what you need to know about cash back credit cards.
Bankrate’s top picks for cash back credit cards
Chase Freedom Unlimited®
Why it’s the best 1.5% cash back offering:
- $150 cash back after you spend $500 in the first 3 months and 1.5% cash back on all purchases
- Redeem for cash back, travel, gift cards or shop with points on Amazon.com
- 15-month 0% introductory APR offer on purchases and balance transfers (16.49% – 25.24% variable APR thereafter)
- No annual fee
This card isn’t for you if: If you are looking for a higher rewards rate.
Bottom line: The Freedom Unlimited is a solid no annual fee cash back card with flexible redemption options.
Read the full review and apply on Chase’s secure website.
Capital One® Quicksilver® Cash Rewards Credit Card
Why it’s best for your first rewards card:
- Earn 1.5% cash back on all purchases with no limit on how much cash back you can earn
- $150 sign-up bonus when you spend $500 in your first three months
- 15-month 0% introductory offer on purchases and balance transfers (15.74%-25.74% variable APR thereafter)
- No annual fee
This card isn’t for you if: You’re looking for a high-earning cash back card.
Bottom line: The Quicksilver from Capital One is a great starter cash back card for earning rewards on everyday purchases.
Read the full review and apply on Capital One’s secure website.
Citi® Double Cash Card
Why it’s the best flat-rate cash back offering:
- Earn cash back twice: 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- 18-month 0% introductory APR offer on balance transfers (15.49% – 25.49% variable APR thereafter)
- The Lost Wallet® Service will replace your lost card within 24 hours
- No annual fee
This card isn’t for you if: You have the ability to spend more, especially in specific categories.
Bottom line: The Double Cash card is a great tool for keeping practicing healthy card habits due to its 1% cash back incentive after paying off a purchase.
Read the full review and apply on Citi’s secure website.
Capital One® SavorOne® Cash Rewards Credit Card
Why it’s the best cash back card with no annual fee:
- Unlimited 3% cash back on dining and entertainment, 2% on grocery stores and 1% on everything else
- Earn $150 when you spend $500 in your first three months
- 15-month 0% introductory APR offer on purchases and balance transfers (15.74%-25.74% variable APR thereafter)
- No foreign transaction fees
- No annual fee
This card isn’t for you if: You don’t regularly spend on entertainment and eating out.
Bottom line: The SavorOne by Capital One is a great no annual fee cash back card for earning unlimited rewards.
Read the full review and apply on Capital One’s secure website.
Bank of America® Cash Rewards credit card
Why it’s best for achieving banking bonuses:
- Bank of America Preferred Rewards members can earn 25% – 75% more cash back on every purchase, adding value to an already robust rewards program.
- Having the choice of six categories for 3% cash back (travel, gas, online shopping, dining, drug stores and home improvement/furnishings on the first $2,500 in combined 2% and 3% category purchases each quarter) provides a ton of flexibility for earning rewards. You also get unlimited 1% cash back on all other purchases.
- 0% intro APR offers for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days (15.49% – 25.49% variable APR after offers expire). A 3% fee (min $10) applies to all balance transfers.
- The sign-up bonus — $200 in online cash rewards after you make $1,000 in purchases during the first 90 days — is easily obtainable.
This card isn’t for you if: Your spending habits don’t align with the quarterly earning limits. The $2,500 cap on combined spending for your 3% choice category and the 2% grocery store and wholesale club category could limit the earning potential of big-time grocery shoppers.
Bottom line: The banking bonuses help make this card an attractive companion for BofA account holders who make a fair amount of household-oriented purchases.
Read the full review and apply on Bank of America’s secure website.
Discover it® Student Cash Back
Why it’s the best bonus category card for students:
- Earn 5% cash back in rotating bonus categories on up to $1,500 per quarter and 1% afterward (activation required)
- Most student cash back cards offer lower, flat-rate rewards on general purchases only
- No annual fee
- No credit history required
This card isn’t for you if: You’re not ready to track rotating categories, activate every quarter and target your spending
Bottom line: As long as you keep an eye on the Cashback Calendar and manage your spending patterns, the Discover it Student Cash Back offers a learning experience in how to maximize cash back rewards.
Read the full review and apply on Discover’s secure website.
Capital One® Savor® Cash Rewards Credit Card
Why it’s best for dining and entertainment purchases:
- Get an unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on everything else
- $300 cash bonus when you spend $3,000 in your first three months
- $95 annual fee waived your first year
- No foreign transaction fees
This card isn’t for you if: You don’t get out often, for dining, movies, concerts, etc.
Bottom line: As the sibling to the SavorOne, the Savor card is a stellar way to earn a high level of cash back rewards on your dining and entertainment purchases.
Read the full review and apply on Capital One’s secure website.
American Express Cash Magnet® Card
Why it’s best for payment flexibility with cash back:
- Earn unlimited 1.5% cash back on all eligible purchases
- The Plan It® feature lets you split up large purchases over time with a fixed monthly fee, while Pay It® lets you quickly pay off small purchase amounts while still earning rewards
- No annual fee
- Welcome offer is $150 statement credit after you spend $1,000 in the first 3 months
This card isn’t for you if: You want higher cash back rates in specialized categories, such as gas or groceries.
Bottom line: This card gives you the opportunity to earn cash back at a steady rate and enjoy greater flexibility in managing your balance.
Read the full review and apply on the American Express secure website.
What is a cash back credit card?
Just as the name says, this kind of card lets you earn cash back rewards on eligible purchases. For every $1 spent on those purchases, you earn a percentage back. Cash back is essentially a discount on eligible purchases. You may not see it immediately at the register, but the payoff comes when you redeem your rewards.
For example, a 3% cash back rate means 3 cents for every dollar in eligible spending. For a cardholder with a $4,000 annual grocery bill, earning 3% at the supermarket could mean up to $120 in cash back rewards.
Cash back cards are different from other types of rewards cards, like those that offer points or miles for travel purchases. Instead of complicated redemption programs, a cash back card typically offers a few simple ways to redeem your rewards, including:
- Statement credits
- Checks payable to you
- Direct deposits into one of your bank accounts
- Gift cards
Cash back is king of rewards
Research by credit card service company TSYS (Total System Services) has found that cash back is the most popular type of credit card reward. Of the consumers surveyed by TSYS who had a credit card with a rewards program, 80% had redeemed for cash back.
| Cash back |
80% |
| Gift cards |
47% |
| Merchandise |
38% |
| Travel |
33% |
| Experiences |
21% |
Source: 2018 TSYS U.S. Consumer Payment Study
How the different types of rewards structures work
Cash back cards come in a variety of forms. Flat-rate cash back cards, for example, give you the same rewards rate on every purchase. Cards with rotating categories or tiered cash back cards have categories that offer more cash back within certain spending groups (such as restaurants and gas stations).
Cards like the Discover it® Cash Back have rotating bonus categories that take a bit of effort to navigate in part because of the required quarterly sign-up. But with these cards, you’ll have the chance to earn a high level of rewards in a variety of categories throughout the year. With tiered rewards, you earn a set amount year-round for specific categories, such as 6% at U.S. supermarkets (on up to $6,000 annually, then 1%) with the Blue Cash Preferred® Card from American Express.
When deciding which type of cash back card is best for you, it’s important to know all of the options available to you.
Flat-rate
Flat-rate cash back cards offer the same rewards rate for each eligible purchase. These cards are great for those who aren’t keen on activating and tracking bonus categories each quarter. The Citi® Double Cash Card is a prime example of a flat-rate cash back card, as it offers 2% on every purchase — unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Tiered
Tiered cash back cards earn you more cash back the more you spend — or in some cases, the more money you have available in your associated account. For example, the Bank of America® Premium Rewards® Visa®credit card offers higher rewards rates based on your Bank of America checking, savings or investment account value. If your account is worth $20,000-$49,999, you’ll get 2.5X points back on travel and dining and 1.875X on everything else, compared to the normal 2X on travel and dining and 1.5X on everything else. And it only goes up from there — you’ll earn 3.5X on travel and dining and 2.625X on everything else with an account value of $100,000 or more.
Rotating bonus categories
With rotating categories, you’ll often get higher rewards rates, but a majority of these cards require enrollment in order to receive cash back in the category. This can be a problem for forgetful cardholders. Normally, if you forget to enroll, the issuer defaults your earnings in that category to 1% cash back.
Also, take category caps into consideration. Cards with rotating bonus categories tend to set caps on how much you can earn in high rewards categories. For example, the Discover it® Cash Back offers 5% cash back on rotating categories when you activate and enroll, but it caps the bonus rate earnings at $1,500 in purchases per quarter. After that, you’ll earn an unlimited 1%.
What is the highest-paying cash back card?
Consumers can choose from hundreds of cash back credit cards that reward purchases ranging from the general (1% back on all eligible purchases) to the specific (6% back on select U.S. streaming services). Each one puts money back in your wallet, but which credit card pays you the most cash back?
The answer depends on a lot of factors, but two cards that definitely belong in the conversation are the Blue Cash Preferred® Card from American Express and the Capital One® Savor® Cash Rewards Credit Card.
How cash back credit cards earn rewards
Like any type of credit card, cash back cards play by a certain set of rules. To know how much they pay, you’ll first need to figure out how they pay.
- Rewards rate. The percentage of cash back returned to you for every $1 spent on qualifying purchases
- Categories: The types of purchases that qualify for cash back rewards
- Spending limit. The point where the cardholder maxes out his or her cash back earnings
- Definitions and exceptions. Terms that spell out which purchases qualify for cash back, which applies in part to bonus categories
- Offsetting costs. Usually an annual fee or a foreign transaction fee
A closer look at the Blue Cash Preferred
Here’s a breakdown of the card’s cash back potential.
Rewards rates and categories
- 6% cash back at U.S. supermarkets (up to $6,000 annually, then 1%)
- 6% cash back on select U.S. streaming services
- 3% cash back on transit (including rideshares, tolls, taxis and buses)
- 3% cash back at U.S. gas stations
- 1% on everything else
- Terms apply
Spending limit
- $6,000 at U.S. supermarkets per year, then 1%
Definitions and exceptions
American Express defines “supermarkets” quite narrowly. Merchants not included in the category include superstores (such as Target), warehouse clubs (such as Sam’s Club) specialty stores (such as wine shops) and convenience stores. Eligible purchases at non-supermarket establishments earn 1% cash back, not 6%.
Offsetting costs
- $95 annual fee
- 7% fee on foreign transactions
How much can you earn with Blue Cash Preferred?
If you max out the U.S. supermarkets category, you’ll earn $360 per year (6% of $6,000). However, bear in mind that you’ll continue to earn for U.S. supermarket purchases, at 1% unlimited, after you hit the $6,000 limit.
You’ll also earn unlimited cash back in four other categories: 6% on select U.S. streaming services, 3% on transit, 3% at U.S. gas stations and 1% on other eligible purchases.
The $360 per year from maxing out the U.S. supermarkets category could be just the beginning, given the earning potential in the remaining categories. Families that spend a lot at supermarkets and gas stations could easily see several hundred dollars in cash back every year.
Runner-up for highest-paying cash back cards
Although the Capital One Savor makes the list of highest-earning cash back cards, the specificity of its most lucrative rewards category (unlimited 4% cash back on dining and entertainment) limits the card’s overall potential. The typical consumer probably doesn’t spend enough on dining and entertainment to see exceptional returns.
Rewards rates and categories
- 4% cash back on dining and entertainment
- 2% at grocery stores
- 1% on all other purchases
- 8% cash back on tickets at ticket marketplace Vivid Seats (through May 2020)
Spending limit
Definitions and exceptions
Capital One doesn’t put many restrictions on what qualifies as a dining/entertainment purchase. The list of eligible purchases includes restaurants, bars, bakeries, movie tickets, theme parks, sporting events, bowling alleys and many more.
Offsetting costs
- $95 annual fee (waived the first year)
Figuring out which card is right for you
Review your spending for the past few months to see which categories you purchased the most in, and make sure to have your credit score handy to know which cards you have a chance at being approved for.
A busy family of four would most likely benefit more from a card that offers greater rewards on gas and groceries, such as the 6% cash back at U.S. supermarkets (on up to $6,000 annually, then 1%) and 3% at U.S. gas stations offered by the Blue Cash Preferred® Card from American Express, than a cash back card focused on travel. Frequent warehouse shoppers may find that a co-branded card, such as the Costco Anywhere Visa® Card by Citi, would give them the most bang for the buck.
If you can’t pinpoint an area where you spend the most in, go with a general-purpose cash back card that will get you earn rewards on most any kind of eligible purchase.
Pros of owning a cash back card:
- Most cash back cards offer an unlimited 1% cash back on purchases outside of bonus categories.
- Many offer cash back bonuses for hitting certain spending requirements within a time period.
- You can normally redeem your cash back for things like merchandise, airfare, hotel stays, statement credits and more.
Cons of owning a cash back card:
- Some cards require enrollment to receive a high level of cash back each quarter.
- It’s not unusual for issuers to put a cap on how much you can earn within higher rewards categories.
- You may have trouble maxing out your bonus categories if they aren’t relevant to your lifestyle.
Pick a card that’s aligned with how you spend money. Some cards give you 2% cash back on all purchases while others may provide 5% cash back in rotating categories (like restaurants or travel) and 1% on everything else. Find the card that will give you the maximum benefit based on which categories you tend to spend the most amount of money in each month.
— Priya Malani, Founding Partner Stash Wealth
Things to watch out for with cash back cards
With a cash back card, the amount you accrue is simple and easy to follow — it’s essentially a rebate on everything you spend. However, owning any kind of credit card means being aware of some potential pitfalls.
APR that cancels out rewards
When you run a large balance on your credit card, APR (annual percentage rate) could cancel out the rewards you’ve earned.
As long as you consistently pay off your balance each month, you can avoid paying these interest charges. But if you tend to carry a balance, your top priority when researching cash back cards should be looking for cards that offer lower APR or a pass on your first late payment.
Overspending for a bonus
Many cards offer sign-up bonuses that require you to spend a specific amount of money within a specific time-frame. You might feel tempted to sign up for a card just for the welcome offer, but be careful. By acting impulsively, you could overspend to qualify for the offer and end up carrying a balance.
Make sure the spending requirement is in line with how much you normally spend with a credit card. Running up a balance you can’t pay off in time could subject you to high APR, potentially making the sign-up bonus a net loss.
Letting your points expire
Above all, remember to redeem your cash back. If you don’t, there’s no use in getting a cash back card in the first place.
A number of cards offer rewards that don’t expire, but don’t assume every card does. Check the fine print and keep an eye on the rewards you’ve earned. If you have a big purchase planned, consider stockpiling your rewards for a while.
I have always chosen cash back credit cards over travel rewards cards for the one reason of simplicity. It is so much easier to know that for every $1,000 I spend I am getting $20 cash back (2%) rather than accumulating miles that have to be used to purchase a flight based on credit card companies’ conversion factors. If I want to travel, I can spend my cash back rewards on flight purchases, it’s so much simpler this way.
— Phillip Christenson, CFA, Portfolio Manager & Financial Advisor at Phillip James Financial
How to maximize bonus categories
Let’s break down how you can get the most out of rotating bonus categories using the Discover it® Cash Back as an example. You can try a similar strategy with any card as long as it matches up with the respective rewards structure.
Enroll/activate each quarter
Rotating category cards typically require you to enroll or activate (the language varies) the bonus categories for the upcoming quarter to earn the higher bonus rate. If you don’t, you’ll earn the standard rate.
With the Discover it Cash Back, upon enrollment you’ll earn 5% cash back in quarterly, rotating bonus categories on up to $1,500 in purchases and an unlimited 1% cash back on everything else.
Target your spending
In order to get the most out of a bonus category, try to max out the spending limit for the quarter. Depending on the card, it could be in the neighborhood of $3,000. After you reach the limit, the rewards rate typically returns to the standard percentage.
Be aware that it may be difficult to maximize your rewards if the bonus category covers the kind of purchases you don’t normally spend a lot of money on.
Discover’s 2019 bonus categories include grocery stores, gas stations, Uber, Lyft, Paypal, restaurants, Amazon.com, Target and Walmart.com. By maxing out all four of the Discover it Cash Back bonus categories throughout the year (capped at $1,500 in spending each quarter), you’ll earn $300 in cash back — not including spending you’d do in the 1% cash back category; activation required. Say you spend an additional $500 each quarter on non-category spending; that’s an extra $20 in cash back for the year.
Consider combining cards
A combination of cards might serve you best. Some rewards credit cards offered by the same issuer let you use different cards to suit your needs and combine points.
Consider the Chase Freedom®, Chase Sapphire Reserve and Ink Business Preferred Credit Card. Consumers who spend across a wide variety of categories can pick up this combination of cards and combine Chase Ultimate Rewards® points when they’re ready to redeem. By having all three cards, consumers can utilize bonus categories efficiently to maximize rewards for the year.
You can try the same kind of strategy with cards that earn American Express Membership Rewards or Citi ThankYou Points. The key is, once again, choosing cards that make sense with your regular spending patterns so you can maximize the rewards you earn.
Explore the card’s ‘online mall’
Some card issuers feature online shopping portals that offer cash back incentives, discounts or both. Examples include Chase Ultimate Rewards® and Barclaycard RewardsBoost.
Make sure you understand what the terms are for receiving cash back, like which purchases are eligible and if you’re going to be paying an annual fee for the card. Don’t let attractive offers lead you into opening a credit card unnecessarily. It’s not worth damaging your credit simply to chase down rewards. Find what works best for you, be disciplined and stick with it.
— Douglas A. Boneparth, CFP®, President of Bone Fide Wealth, LLC
Additional reviews and research
Find out more about cash back credit cards with these resources from Bankrate:
Senior Editor Barry Bridges has been writing about credit cards, personal loans, mortgages and other personal finance products since 2017. Before joining Bankrate, he was an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
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