Key takeaways

  • If you can avoid interest by paying your credit card bills in full, it’s hard to top a simple no-annual-fee card that gives you 2 percent cash back on every purchase
  • To maximize rewards, pair a 2 percent cash back card with a bonus category card that rewards you for the type of spending you do the most
  • If you’d rather only use one card over the long haul, it would be best to opt for a 2 percent cash back card

Cash is king when it comes to credit card rewards. More than four in 10 cardholders (41 percent) say cash back is their favorite feature, according to a Bankrate survey conducted in late 2021. That’s well ahead of other options, such as widespread acceptance (14 percent), a low interest rate (9 percent) and travel rewards (6 percent).

I’m a big proponent of cash back credit cards myself. I appreciate the ability to get money back on purchases I would have made anyway. Unlike many travel cards, cash back cards tend to be very straightforward. There’s also universal appeal — who couldn’t use more cash, right? And most cash back cards don’t charge annual fees.

Especially considering today’s very high inflation rate, getting what amounts to a small rebate on everything you buy can add up. In 2022, I racked up more than $1,700 in cash back.

There’s one big exception: If you carry a balance, you should prioritize your interest rate, since the average credit card rate is now over 20 percent. Focus on paying off your debt at the lowest possible cost (perhaps via a top balance transfer card). Once that’s done, then you can go after rewards more aggressively.

What’s the best credit card to have?

If you can avoid interest by paying your credit card bills in full, it’s hard to top a simple no-annual-fee card that gives you 2 percent cash back on every purchase. Some examples include the Wells Fargo Active Cash® Card (2 percent cash rewards on purchases), the PayPal Cashback Mastercard®* and the Citi Double Cash® Card. (Technically, the Citi Double Cash gives you 1 percent when you buy something and another 1 percent when you pay it off.)

I used to be afraid to give that answer. It’s a little boring, right? I used to name flashier cards like the Chase Sapphire Reserve® and The Platinum Card® from American Express. People would always nod when I mentioned perks such as airport lounge access and first-class upgrades. And those are great cards — for some people. But even with all of their various credits and benefits, the fact is, they’re expensive cards to hold. Most people can’t (or won’t) spend that much on an annual fee ($550 or $695 per year, respectively) for a credit card.

Honestly, most of us don’t travel enough to maximize the benefits anyway, especially as travel grows more costly. In fact, 37 percent of Americans say they opted out of taking a vacation in 2022 because of the state of the economy, according to a recent Bankrate survey.

The multi-card strategy

If you’re a maximizer who’s willing to juggle different cards for different purchases, you can earn more than 2 percent cash back (or travel points/miles) on certain purchases. However, I’d argue you should still have a top 2 percent cash back card as a foundation.

For instance, I’m a huge fan of the Blue Cash Preferred® Card from American Express. It gives 6 percent cash back at U.S. supermarkets (on up to $6,000 in annual spending, then 1 percent after that). Cardholders also get 6 percent cash back on select U.S. streaming subscriptions and 3 percent cash back on U.S. gas station purchases and public transit. But other eligible purchases earn just 1 percent cash back. That’s where having a 2 percent card comes into play.

There are so many examples of this. Figure out where you spend the most money and lean into those categories (groceries, dining, travel, gas or something else). Whatever it is, maximize it. But since most cards with lucrative bonus categories only give 1 percent cash back on “everything else,” your 2 percent cash back card is an excellent supplement.

Avoid annual fees

A great cash back card strategy can also help you avoid those costly annual fees, while still earning a great rewards rate. The Discover it® Miles card, for example, provides 1.5X miles on all purchases and, as a welcome offer, it matches all miles earned (during the first year) at the end of the first year.

If you’re only going to use one card over the long haul, then I’d vote for a card like the Wells Fargo Active Cash, Citi Double Cash or PayPal Cashback Mastercard. If you’re willing to put up with some restrictions, such as redeeming into a separate account held with a particular financial institution, then the Fidelity® Rewards Visa Signature® Credit Card*, TD Double Up℠ Credit Card* and SoFi Credit Card* fit the bill, too.

The bottom line

There’s a good place for a no-annual-fee 2 percent cash back card in every wallet, whether it’s the card you pull out for every purchase or part of a mix-and-match strategy.

Have a question about credit cards? E-mail me at and I’d be happy to help.

*The information about the PayPal Cashback Mastercard®, Fidelity® Rewards Visa Signature® Credit Card, TD Double Up℠ Credit Card and SoFi Credit Card has been collected independently by The card details have not been reviewed or approved by the card issuer.