Cash Back Credit Cards
Cash back credit cards are a great favorite among many cardholders. You can earn cash rebates on your purchases of up to 5% by simply using one of these cards when you shop or spend. If you're a responsible cardholder, then carrying this type of reward or rebate card is better than using cash because you can typically get 1% to 5% cash back on expenses you already make on a regular basis. Why not make your spending count by getting a discount or extra money whenever you make a purchase? Here are some of our favorite cards for your consideration.
Blue Cash Everyday® Card from American Express
This is a cash back rewards credit card that offers 0% intro APR on purchases. It's a good rewards card which allows you to earn up to 3% cash back on many spending categories such as supermarkets, gas, groceries and department stores. For everything else, you'll earn 1% cash back. Recommend the card to people you know and you'll get $25 per referral.
| Intro APR | Intro Period | Regular APR | Annual Fee | Balance Transfers | Credit Needed |
| 0% | 12 Months on Purchases | 12.99% - 21.99% Variable | $0 | Yes | Excellent |
USAA Cash Rewards® Visa®
| Intro APR | Intro Period | Regular APR |
| None | N/A | 9.9%-25.9% |
| Annual Fee | Balance Transfers | Credit Needed |
| $0 | Yes | Excellent |
Related Offers:
TrueEarnings® Card from Costco and American Express
| Intro APR | Intro Period | Regular APR |
| 0% | 6 Months on Purchases | 15.24% variable |
| Annual Fee | Balance Transfers | Credit Needed |
| No Annual Fee with your paid Costco Membership | Yes | Excellent |
Cash Back Credit Cards: Guidelines For Optimal Use
Credit cards that offer you cash back rebates every month are probably some of the most useful and practical cards for most individuals. A cash back credit card allows cardholders to benefit from using their cards by getting back a percentage of their total amount spent each month.
These credit cards are a popular subset of rewards card; they offer rebates that arrive as a credit on your account statement. It's one of the more convenient ways to get rewarded for the use of your card. But in order to maximize its use, you'll want to know these important aspects of this breed of card:
- Revolving spending or shopping categories. A lot of cards in this group will advertise high cash back percentages, and this may very well catch your eye. But in reality, those percentages (usually up to 5% cash back) are only offered on certain spending categories that rotate and change each quarter. The implication here is that if you happen to be a big spender in certain areas such as dining or apparel, you may only be receiving the 5% in savings during a particular time of the year. If you don't time your spending during that quarter, you may not be optimizing your rewards. Note that special spending categories revert to 1% cash back categories (by default) after their designated quarter is over.
Tip: You'll need to be a pro at timing specific expenses during particular months or times of the year in order to maximize your card earnings.
- Limited cash back categories. Take a hard look at the purchase categories in question as there may be exclusions involved: for example, your card may grant a 5% rebate to utility expenses but may exclude phone bills in this group. Or the grocery spending category may only apply to proprietary stores and participating retailers, and not to discount warehouses. There are some programs that may strictly limit cash rewards to very narrow or specific categories that may or may not be relevant to your spending habits.
- Purchase ineligibility. Not all purchases may be subject to cash earnings or savings. You'll have to read the fine print to find out which items or transactions qualify for the program and which don't.
- Specific enrollment periods. When a card promises you great cash rewards, you'll need to check whether your card is automatically enrolled for those rewards or whether you still need to manually enroll your card in order to receive the stated benefits. The onus is upon the customer to participate in these programs. If you miss out, you may be stuck with the default 1% terms. Of course, you're welcome to complain to customer service about this. Based on your track record as a customer, you may still be able to claim any missed savings that you bring to your issuer's attention.
- Cash back tiers and thresholds. In some cases, the rewards and benefits come with a catch. Watch out for spending tiers, levels, grades or minimums that may impact how much you can earn back from your card. Contrary to what you may expect, your rebate may not kick in until after you meet some thresholds. As an example, you may be required to spend at least $500 a month before you can begin enjoying higher rebate rates. Credit card companies justify this by saying that they simply reward those customers who use their card more actively.
- Rebate and reward limits, annual ceilings. Be aware that there may be reward caps in place. Note any limits that may be attached to the special rotating categories with higher cash back savings. For example, some cards may limit your earnings each quarter or year, while others cap the purchase amount that qualifies for cash back (during a given period). There are a few cards that don't have reward limits.
- Cash back bonus forfeiture. The bonus you receive may be revoked or lost under certain circumstances. For instance, if the customer is unable to make minimum payments on time for a certain number of cycles, they may end up forfeiting their bonus.
- Lengthy waiting period. Some cards won't give you what you've earned until you've been a customer for a certain length of time. In other words, some of these rebates may only end up in the accounts of loyal customers.
- Card APR. Relative to other card types, the cash back category tends to sport higher interest rates. This makes sense, given that they are meant to focus on improved benefits, and are a best fit for those who don't maintain a balance. Typically, the cash back you receive won't be enough to offset interest rate charges paid for long term balances. If you intend to keep a balance, it might make sense to sacrifice a cash rewards percentage in exchange for getting a lower interest rate. You can check these lower interest rate card options. But if you know that you won't carry card debt, then apply for the card with the highest cash bonus percentage.
{ 33 comments… read them below or add one }
Thanks for this list. I didn’t realize Discover had such a generous cash back offer. Much better than my current card.
I’m a creature of habit and have been using my same old credit cards for sometime, but these cards put the ones I have to shame. I particularly like the ones that don’t have ANY annual fees at all.
As someone still reluctant to put my credit card bill pay on autopilot (though this may very well change for me in the future!), I’ve been subjected to a few blunders, such as late payments. The NO FEEs cards would address that totally!
I have a Countrywide card that is great if you also have a Countrywide mortgage or savings account. The standards rewards are a 1% rebate for all purchases (with no caps), but if you get your reward as either a payment to your C-Wide mortgage or C-Wide savings account, it doubles to 2% (again with no caps).
Obviously Countrywide is having their troubles, so I don’t know how long this will last, but it has worked well for me over the last year. There is no annual fee, but I don’t know the interest rate since I never carry a balance.
Thanks for the tips you’ve given below about cash back credit card use. But, I think it is not as easy as you say. People cannot control themselves and they may spend more to receive the bonus.
I’d love to hear about other cards that offer great rewards. If you own one or know of any, please share…
I actually heard of one with a weird reward: it entered you in some lottery for points. Not sure how well a lottery and credit card debt would work in combination though… 😉
The ones I would also be excited to hear about are those that offer rewards or savings towards mortgage interest. There are a few such cards out there, but I’m yet to explore this type of card and what features it provides.
I use the Chase Freedom card and have been very satisfied with it. One thing that did frustrate me about it was that I kept having a reoccurring charge every month ($0.89 for every $100 on the balance) for something called PAYMENT PROTECTOR. Apparently, they auto enrolled me into this program and it took me a few months to get off my lazy butt and fix it. I probably lost $10-$20 worth of rewards because of it.
By the way, I checked for a link to the Countrywide card that doubles rebates if applied to your mortgage, so it is still available, at least for now. I wasn’t sure if they had killed this offer yet, but apparently not. Probably not worth getting a mortgage from them just to use this, but if you already have a mortgage with them, it’s worth getting this card.
Householdbank.com has a card that offers 2% back on everything. Max is $400 in rewards a year, which is plenty for me. For my spending, I use this card and a Chase Freedom card that gets me 3% back on groceries.
The motiva card doesn’t seem to fit in with the list. It is worth noting that the Discover More categories rotate in the year, so it isn’t all the popular categories listed (I know because I switched to a gas card from a more card).
Also, Discover card has a zillion cute designs. I know no one else who has a pink monogrammed credit card. 🙂 Not that that is a deciding factor…
Thanks for providing this list. I may go with Chase.
@Steward,
Sorry to hear that about the Payment Protector. It goes to show we need to be vigilant about what the card companies sign us up for. Some are these automatic services we don’t really need and I’ve often found myself in your shoes — paying for stuff I had no idea I was using… aargh!
@Finance Nerd,
Great tip! Thanks for the lead on that. My mortgage isn’t with them, but for anyone else who does have a loan with them, it could be worth checking out!
@akb,
Gotta check out that 2% rewards card you mentioned. I appreciate the info.
@SP,
The additional Discover Motiva awards are described as follows: Each time you pay at least the Minimum Payment Due by the Payment Due Date for six consecutive billing periods, you will earn a Pay-On-Time Bonus equal to the Periodic Finance Charges shown on your next statement.
The Motiva may not seem to provide rewards as “juicy” as the others, but believe it or not, it looks better than some of the cards we carry. I’m looking to “upgrade” my cards after seeing these offerings.
True, the Discover More has some really cute designs. I even wrote about the effect of credit card designs on customers in this post: “How credit card companies try to hook our kids into signing up for credit cards“.
I love my rewards card as much as you, but remember that the rewards aren’t free. The credit card companies get 2% of every transaction in interchange fees and are simply giving you 1% or so in kickbacks to get your business.
It’s nice to get the occasional ‘rewards’ check, but every merchant you buy from has to increase their prices to cover the money going to credit card companies so the cash back really just reduces the amount going to banks rather than actually saving money.
@Deamiter – if you’re spending the money anyway the rewards are “free” to us. The products cost the same, so paying with cash/check/debit gets you nothing, but paying with a rewards card gets you the bonus. I understand your logic from a macroeconomic standpoint, but merchants don’t generally lower prices when you whip out cash – except if they are looking to avoid paying taxes.
Personally, my wife and I charge nearly everything on our Chase Freedom Visa Signature. We generally spend about $1,500 to $2,000 a month on it and have earned about $400 so far this year. It also has a feature where if you let the rewards build up to $200, they’ll send you a $250 check – we’ve done this once already in 2008 and will get our second one in October most likely.
This is great information. I was looking to transfer a balance over to save a few dollars. I doubt that I will pay this in one month but it will be paid before 3/09 and I do not plan to use it during this time, so thanks for the leads.
Hey, I love my rewards card also and so this list helps. I was looking to transfer a balance over to save a few dollars.
I would add the Pentagon FCU Visa to this:
5% reward on gas;
2% on groceries;
1.25% on everything else.
Reward credited to your account monthly. No annual fee.
@Ryan S.,
Thanks! The PenFed cards are in our lists. These are cards that a lot of people seem to like quite a bit, but you’d have to be eligible first (it means having to join a military association for a small fee).
@Kevin, I couldn’t agree with you more. Not only are credit cards a great way to earn rewards on money you are already going to spend, it is also more secure than using a debit card (I wouldn’t want to wait while $7000 of stolen cash is replaced in my checking account–an ordeal my husband went through as a victim of identity theft).
I noticed other comments asking about other rewards cards. I happen to work for CardOffers.com, an online credit card directory. You can “shop” for credit cards. The cards are categorized and details are listed for each card. Consumers also rate the cards. It’s a very useful, free tool and I suggest everyone find a credit card that fits their lifestyle.
After years of learning about credit cards the hard way (and working myself out of debit) I’m about ready to get my ‘first’ grown-up credit card. Thanks for the overview. I’ll make sure to check these ones out.
Very comprehensive list! Thanks for this recommended list of cash back credit cards.
Very good information, thanks. There are so many different credit options, my head is spinning.
I never really learned about interest and credit cards until I ended up $5,000 in debt. Now, I’m trying to pay everything off slowly.
I’m tired about hearing people say that credit card users will spend more than people who use cash or that they will do so to “get the bonus.” I just don’t see it and to insinuate that someone will risk their whole financial state to “get the bonus” is ridiculous.
Thanks for the information on Discover. Do you use any of the airline miles cards? I have used Chase/United for some time but it was a bit of a hassle last time I tried to book a vacation for me and my family. Thanks!
Nice website, very well organized. I think its a great way to show people the offers that are out there. Thank you for the list — there are some really good options!
Yes, nice card listing. Right now, Discover and American Express offer some of the best cash backs in the credit card market.
We like one that’s 5% cash back, up to a limit, on all groceries, drug stores, & cash. We have another one that benefits the Audubon Society with each purchase, and also has a nice rewards program – always good for exchanging points for a gift certificate when gift-giving time rolls around.
Don’t forget about getting cash back from your realtor when buying a home!
Credit cards are only a tool to be used in your financial arsenal. It depends on how you decide to use them. If you’re able to manage your credit well, then cards can be a superb financial tool that can actually save you money on your purchases through their rewards programs.
Here is my own philosophy on how to use cash back credit cards to maximize their value:
Suffice it to say, I’m a big fan of rewards cards in general and cash back cards in particular. So if you have exceptional credit and are looking for rebates to soften the blow of your spending, these types of cards can serve you well.
Just go with the black AMX! haha
You’re right, while it makes most a bit uneasy to put their payments on “autopilot”, having the resources to be able to pay online certainly helps and prevents late payments.
It’s good to see that you have as many interesting options in the USA as we have in Canada. People like cash back, they like rewards and they like incentives for balance transfers.
Citi Dividend World MasterCard — This is a card for anyone who wants cash back rewards, but who plans on paying the card off every month.