Key takeaways

  • There are basic cash back cards that offer a flat rate of cash back on all purchases and those that have higher cash back rates on defined categories that are either fixed or rotate periodically.
  • Choose a cash back card with a rewards structure that best aligns with your spending patterns.
  • Compare cards to find out what other benefits they offer besides cash back rewards and look into the interest rate they charge.

Cash back credit cards are a type of rewards credit card that will refund you a percentage of every eligible purchase you make. Compared to other credit card rewards systems, cash back works in a relatively straightforward way. For instance, points and miles can vary in value depending on how they’re redeemed, but cash back is generally worth the same amount when redeemed for a statement credit, direct deposit or check.

However, there are different types of cash back credit cards, such as flat-rate, fixed bonus category and rotating bonus category cards. Ultimately, the best cash back credit card for you is one you’ll be able to swipe regularly and that rewards you for the kind of spending you do the most.

Here’s everything you need to know about choosing a cash back credit card and some top picks to consider.

Choose which type of cash back card is right for you

Cash back cards are typically organized according to three different types of cash back programs: flat-rate, fixed bonus categories and rotating bonus categories. There is no one-size-fits-all cash back card winner, as the credit card that can deliver the most cash back for you will depend on your everyday spending habits. While flat-rate cards can be a good choice for those who prefer a hands-off approach to earning cash back, you may be able to boost your overall return with a card that provides a higher cash back rate in certain fixed or rotating bonus categories.

Flat-rate cash back cards

Flat-rate cash back cards earn a fixed percentage — usually between 1 and 2 percent cash back — on all purchases, whether you’re booking travel or buying groceries for your family. This simple rewards structure makes it easy to get cash back on your everyday expenses. Plus, a card with a higher flat cash back rate can be lucrative (if you qualify).

When picking the best flat-rate cash back card, you should opt for one with at least 1.5 percent cash back on all purchases, because most cards with fixed bonus categories offer 1 percent cash back on all purchases anyway. If you’re interested in a flat-rate card, ideally you should be looking at 2 percent cash back cards, although there are times when a 1.5 percent card might better fit your spending.

Fixed bonus category cards

A fixed bonus category card offers a higher cash back rate — usually anywhere from 2 to 6 percent — in specific categories and at least 1 percent cash back on all other purchases. Common fixed bonus categories include dining, groceries and gas station purchases.

However, it should be noted that bonus categories are often capped at a certain annual spend amount, after which the base cash back rate will apply to spending in that category.

Rotating bonus category cards

Rotating bonus category cards offer higher cash back percentages (typically 5 percent) in purchase categories that change every month or quarter. Some common bonus categories include home improvement stores, streaming services, drugstores, select retailers and wholesale clubs.

Many cards require you to activate bonus categories to get the higher cash back rate, so it’s a good idea to schedule calendar reminders so that you don’t miss out. Card issuers also often impose quarterly spending caps on this type of cash back, after which the base cash back rate (usually 1 percent) will apply for that category.

Consider getting more than one cash back card

One of the best ways to maximize your cash back earnings is to pair one or more bonus category cards — which reward your most frequent purchases — with a high-earning, flat-rate card to cover all non-bonus spending. However, you’ll need to decide if you’re open to keeping track of which credit card to use at which store to get the maximum cash back rate on every purchase.

Decide if you’re willing to pay an annual fee

Although many of the best cash back credit cards have no annual fee, some issuers will charge you a fee for card membership. However, the cost of an annual fee can often be recouped by the cash back you’ll earn, annual credits or other card benefits. If the card you’re eyeing has an annual fee, take a look at the card’s rewards structure and benefits to determine if the fee will be worth paying for you.

Pay attention to APR

Whether you intend to carry a balance or not, it’s important to be aware of your credit card’s interest rate, or APR. The current average credit card interest rate is more than 20 percent, which will add up quickly if you cannot make more than the minimum payment for any reason.

Some cash back cards also come with a 0 percent intro APR on purchases or balance transfers for a limited time, so be sure to consider the ongoing interest rate when your intro APR period ends.

Evaluate additional card benefits

When looking for a card, you’ll also want to evaluate the other benefits a cash back card may offer, such as:

Not all cash back cards will offer these benefits, and you may not be interested in many of these benefits anyway. Ultimately, you should consider whether you’d actually take advantage of any of these perks and whether they’d be worth it for you.

Determine how you want to redeem cash back

Cash back credit cards usually allow cardholders to redeem cash back in the form of a direct deposit, check or statement credit to offset your balance. In addition to that, some cards may allow you to redeem cash back for gift cards, charitable donations, purchases with select merchants, points toward travel purchases and more.

Remember: Credit card rewards are only worth something when you redeem them. A 2023 CreditCards.com survey found that 23 percent of cardholders have unused rewards. When evaluating a cash back credit card, focus on how usable a card will be for you. Keep an eye out for issues like minimum cash back redemption requirements, cash back expiration policies and any other restrictions on how you can redeem cash back.

Compare top cash back cards

Here are a few of the best flat-rate, fixed bonus category and rotating bonus category cards to consider and compare:

Citi Double Cash Card: Best for simple, flat-rate rewards

A perennial favorite, the Citi® Double Cash Card has one of the highest overall rates of return you can find on a flat-rate cash back card with no annual fee: an unlimited 1 percent cash back as you buy, plus another 1 percent back when you pay for your purchases. It’s a great choice for those who don’t want to do anything extra to maximize their rewards earnings.

With this card, you actually earn basic Citi Thank You points, which you can redeem for a statement credit, direct deposit or check. These points can also be redeemed as points for travel through Citi, gift cards, PayPal purchases or Amazon purchases.

Blue Cash Preferred Card from American Express: Best for fixed bonus categories

The Blue Cash Preferred® Card from American Express is one of the best fixed bonus category cards around due to its tiered rewards structure for common everyday expenses, such as an incredible 6 percent cash back at U.S. supermarkets (on up to $6,000 in spending per year, then 1 percent), 6 percent cash back on select U.S. streaming services and 3 percent cash back on U.S. gas stations and transit purchases.

In addition to this rewards structure, the Blue Cash Preferred offers the chance to earn boosted rewards through Amex Offers. This program allows you to earn more cash back — sometimes 20 to 25 percent back — on purchases from select merchants. The card also comes with a complimentary ShopRunner membership (enrollment required), return and purchase protection, car rental loss and damage insurance, extended warranty coverage and an intro APR offer.

Discover it® Cash Back: Best for rotating cash back categories

The Discover it® Cash Back stands out among cash back cards thanks to its rotating bonus categories (5 percent cash back after activation on rotating categories each quarter, on up to $1,500 in purchases per quarter, then 1 percent) and generous welcome offer (Cashback Match™) that essentially doubles all of the cash back you earn at the end of your first year. Discover’s cash back categories change on a quarterly basis, so be sure to check back as it releases its quarterly categories. Some common rotating categories in the past have included grocery stores, gas stations, restaurants, Target and Amazon.

With this card, you’ll also score an intro APR offer on purchases and balance transfers, making it a great choice if you need to pay off a large purchase over time or pay down credit card debt.

The bottom line

Cash back credit cards are a great way to get a little something back on your everyday spending. When choosing a card, carefully consider your spending habits and how involved you want to be to ensure you’ll get the right card for you. If you need more help choosing a cash back card, check out our credit card spender type tool to receive personalized credit card recommendations based on your credit score, spending habits and daily needs.

Whichever cash back card you choose, remember to pay your bill in full every month to avoid today’s steep interest rates that can negate all the cash back you earn.