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 late last year. 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 these days, with inflation at a 40-year high, getting what amounts to a small rebate on everything you buy can add up. Last year, I racked up more than $1,500 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 a hefty 16.34 percent. Focus on paying off your debt at the lowest possible cost (perhaps via a 0 percent 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. 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. Most people can’t or won’t spend that much ($550 or $695 per year, respectively) for a credit card.

Honestly, most of us don’t travel enough to maximize the benefits anyway (especially since COVID hit, but even before that, if we’re being realistic). An April 2019 survey found just half of Americans had flown or stayed in a hotel for pleasure over the past 12 months. And just half of them (or a quarter of all Americans aged 18+) had done so more than once.

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 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 on U.S. gas station purchases and public transit. But other purchases earn just 1 percent cash back—that’s where your 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.

Most people don’t like annual fees

Only 44 percent of cardholders paid an annual fee in 2020, according to a Bankrate report. For a limited time, it’s possible to get 3 percent cash back on every purchase without paying an annual fee. The USAllianceVisa® Signature Card is offering this deal through at least the end of 2022. And the Discover it® Miles card gives 1.5 miles on each purchase and matches all miles earned within the first 12 months, for an effective earn rate of 3 percent that 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 the 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, the TD Double Up℠ Credit Card and the SoFi Credit Card fit the bill, too.

The bottom line

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

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