Research Methodology: How We Choose The Best Cash
Choosing the best cash-back credit card for you can take a lot of research and become really overwhelming. At TPG, we try to make the research process as simple as possible. We spend hours combing through the credit cards available from our partners and from outside our network, comparing them to see which cards offer the best return for readers. Here are a few of the factors we look at when choosing the credit cards on our best cash-back cards guide:
Legal Information And Disclosures
Credit cards subject to credit approval. Certain fees and restrictions may apply. Refer to Cash Back Rewards Program Rules for more details about qualifying purchases that earn Cash Back.
1Cash Back rewards are based on Net Purchases . 1% base Cash Back for every $1 of net purchases. Eligible merchants for the 3% bonus categories include: groceries ; Dining ; Gas . After $1,500 is spent on gas purchases each calendar quarter, you go back to earning 1% Base Cash Back. While this list can be a helpful guide, please remember that purchases and transactions are submitted and categorized by the merchant. Bank of the West does not control how the purchases are classified. Some purchases may not fall into the category where you might expect them to appear.
2Cash Back Rewards have no cash or any other value until redeemed as a statement credit or direct deposit to a checking or savings account. The Bank of the West Rewards program is subject to the current Cash Back Rewards Program Rules.
Pay Your Card In Full And Avoid Fees
This is a given regardless of what type of credit card you have. But if you want to make the most out of your cash-back credit card and ensure youre maximizing your savings, then keeping a balance on your card is never a good idea. As always, use your card only insomuch as you have the money to pay it off every month on or before the due date.
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Blue Cash Everyday Card From American Express
Our pick for;Bonus categories groceries and gas + no annual fee
The Blue Cash Everyday® Card from American Express pays elevated rewards at U.S. supermarkets, U.S. gas stations and select U.S. department stores. The rewards aren’t as rich as on the Blue Cash Preferred® Card from American Express, but this card doesn’t charge an annual fee. New cardholders get a decent bonus offer and an introductory 0% APR period. If you’re buying groceries regularly but not necessarily all the time,;it’s worth a look. Read our review.
Chase Freedom Unlimited: Best For Intro Apr
Sign-up bonus: Earn a $200 bonus after spending $500 in their first three months from account opening. Earn 5% cash back on grocery store purchases on up to $12,000 spent in the first year.
Cash back rate: Earn 5% cash back on travel booked through Chase Ultimate Rewards, 5% cash back on Lyft through March 2022, 3% cash back on dining and drugstores, and unlimited 1.5% cash back on all other purchases.
Annual fee:;$0
Why we chose it:;In addition to a great bonus and earning structure, the Chase Freedom Unlimited offers a 0% APR introductory period for 15 months from account opening on new purchases . This way, you can earn cash back while financing large purchases just make sure youre paying off your balance before the end of the intro APR period to avoid paying interest.
The Chase Freedom Unlimited is also a great card to pair with your existing;Chase credit cards;to earn cash back on non-bonus spending in fact, it makes up one-third of the;Chase Trifecta. If you have an Ultimate Rewards credit card, such as the;Chase Sapphire Preferred Card;or;Chase Sapphire Reserve, you can combine rewards and take advantage of 25% to 50%;Chase travel portal;redemption bonuses and;transfer partners. Since;TPG values Ultimate Rewards;points at 2 cents each, youll get a 3% return on all non-bonus spending when you pair the Freedom Unlimited with a Chase Ultimate Rewards card.
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How To Redeem Cash Back
Cash-back cards usually only provide a few redemption options. Some cards allow you to redeem cash back at any amount, while others require you to reach a minimum amount, typically $25. Here are the most common ways you can redeem cash back.
- Statement credit: Apply cash back as a credit to your account balance. This helps offset the cost of your bill. However, you still need to make the minimum payment toward your balance.
- Direct deposit or check: You can often transfer cash back to a linked bank account or request a paper check.
- Gift cards: Some cash-back cards may allow you to redeem cash back for various gift cards.
Information about the Chase Freedom®,;Capital One® Savor® Cash Rewards Credit Card and Alliant Cashback Visa® Signature Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
For rates and fees of the Discover it® Cash Back, click here.
Editorial Note:
Blue Cash Preferred Card From American Express: Best For Gas Supermarkets And Select Streaming Services Cash Back In The Us
Welcome offer: Earn 20% back on Amazon.com purchases on the card within the first six months of card membership, up to $200 back. Plus, earn $150 back after you spend $3,000 in purchases on the card within the first six months of card membership. Cash back received in the form of statement credits.
Cash back rate: Earn 6% cash back on purchases at U.S. supermarkets and on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit and 1% cash back everywhere else. Cash back is received in the form of Reward Dollars that can be redeemed for statement credits. Terms apply.
Annual fee:;$0 introductory annual fee for one year, then $95;
Why we chose it:;Another;rewards credit card;with some intriguing bonus categories is the;Blue Cash Preferred Card from American Express. This is a great all-around cash-back card because it earns solid cash back on categories that dont always get a lot of love from other cards. When Amex added streaming services and transit to this cards bonus categories, it got a major bump in value in my mind. Just remember that it charges a 2.7% foreign transaction fee , so while its a great option for use in the U.S., you shouldnt use it when youre traveling abroad.
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Do You Still Get Cash
Cash-back rewards typically apply to only net purchases, which exclude returns. Cash-back on returns is generally deducted from your rewards balance. Or if the reward has already been issued, your card issuer may reserve or cancel the rewards deposit, or post a cash advance for the rewards to your credit card balance.
How Is Cashback Profitable For Credit Card Companies
Thomas J. Catalano is a CFP and Registered Investment Adviser with the state of South Carolina. He is a CFP, registered investment advisor, and he owns his own financial advisory firm. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.
Credit card companies are in the business of making money, yet they often advertise incentives that feature rewards such as cash back on credit card purchases. Many consumers are inundated with online offers and mailers, promising great;incentives, from zero to low introductory interest rates to one-time bonus rewards offers, to cash back deals whenever they use their cards.;
Nowadays, it isn’t unusual to see banks offer what seem to be very generous cash back incentives to their cardholders, even after the introductory bonus period;is over. For example, Chase offers up to 5% cash back on its Chase Freedom Rewards Card, as;does the Discover Card. So how can these companies offer such seemingly lucrative deals for consumers and still make a profit?
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Delta Skymiles Gold American Express: Best For Free Checked Bags
On most airlines, checking a bag is going to cost you and the fees can add up. Fortunately, many airline credit cards offer complimentary checked bags as a benefit, and the Delta SkyMiles Gold American Express Card is one of the best when it comes to avoiding those fees.
With the Delta Gold Amex, youll get your first checked bag for free on Delta flights, along with up to eight additional passengers traveling in the same reservation. For a family of four, that could save you as much as $240 round trip, since Delta charges $30 per bag for domestic flights.
Youll also get a 20% savings in the form of a statement credit after you use your card on eligible Delta in-flight purchases of food, beverages and audio headsets, and can even earn a $100 Delta flight credit after you spend $10,000 in purchases on your card in a calendar year. Plus, the Delta Gold Amex has a $0 introductory annual fee for the first year, then $99 thereafter .
Related: These are our favorite credit cards for Delta flyers.
One thing youll want to be wary of, however, is that the Delta Gold Amex isnt the best credit card to use for your everyday purchases. Youll earn 2 miles per dollar on eligible Delta purchases as well as restaurants and at U.S. supermarkets, but on all other purchases, youll only earn 1 mile per dollar spent.
Can You Get Cash Back At Stores With A Credit Card
No, you can’t use your credit card for cash back at stores; this is a transaction generally reserved for debit cards and, in fact, is only possible at some stores even then.;
In general, you’ll want to use a debit card for cash back, whether via a transaction at an eligible store or through an ATM withdrawal. There is, however, one major credit card issuer that does allow cash back at checkout.;
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Should I Get A Cash Back Credit Card
A cash back rewards card could save you money. If you have good or excellent credit and can qualify for the best cash back cards, then they’re definitely worth checking out. But this type of credit card has its perks and its drawbacks.
Pros
- Cash back on every purchase
- Easy to use
- Most cash back cards don’t charge an annual fee
Cons
- Usually have smaller sign-up bonuses
- Fewer travel perks and other extras
- Can’t get any extra value on cash back redemptions
The great thing about cash back cards is how simple and affordable they are. Anyone can benefit from cash back, and there’s no learning curve involved like there can be with travel credit cards. You can find plenty of no-annual-fee cards that earn cash back. Even the ones with annual fees usually cost less than $100 per year.
There is a tradeoff to those benefits. Cash back cards are affordable, but they also generally have smaller bonuses and fewer features than you could get from a higher-priced travel rewards card. And while cash back means rewards redemptions are a breeze, there’s no way to get more value out of cash back. With rewards credit cards that earn points, it’s sometimes possible to extract more value from those points if you know how to use them.
Best Travel Rewards Credit Cards
Most travel rewards credit cards come with annual fees upwards of $100 but perks such as credits on travel, airfare, dining, and more can help offset that, as long as those credits are on purchases you would have made anyway. For example, the American Express Gold Cards $10 monthly Uber Cash credit can equal up to $120 each year. But if you dont use the rideshare service or its delivery option, it wont do much to offset the cards $250 fee.;
Heres a closer look at our picks for some of the best travel credit cards you can apply for.
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Cash Back Credit Cards
Cash-back credit cards are popular for a very good reason: They… pay you back based on the dollars you spend on your everyday purchases. Whether you use your card for gas, groceries, eating out, travel or a mix and then some, there’s a cash-back credit card that will allow you to maximize your rewards.
Read more
Cash-back credit cards are popular for a very good reason: They pay you back based on the dollars you spend on your everyday purchases. Whether you use your card for gas, groceries, eating out, travel or a mix and then some, there’s a cash-back credit card that will allow you to maximize your rewards.
Many of the credit card offers that appear on this site are from credit card companies from which CardRatings.com receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. It is this compensation that enables CardRatings.com to provide you services like access to free tools and information for consumers. CardRatings.com does not review or include all credit card companies or all available credit card offers. Because credit card offers change frequently, please visit the card issuer site for current information.
Bank Of America Customized Cash Rewards Credit Card: Best For Online Cash Back
Sign-up bonus:;$200 cash-back bonus after you spend $1,000 within the first 90 days of account opening.
Cash back rate: 3% cash back in the category of your choice and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined bonus category purchases each quarter . You can change your 3% category once a month.
Annual fee:;$0
Why we chose it:;Having the option to get a 3% bonus on online shopping across a wide variety of retailers is terrific. Plus, depending on your banking relationship with Bank of America, that 3% return can;go as high as 5.25% back;if you qualify for the;Preferred Rewards programs top tier Platinum Pro. If your spending habits change throughout the year, the Bank of America Cash Rewards card should definitely be on your radar.
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Ink Business Cash Card: Best For Small Business Spending
Sign-up bonus:;$750 cash back after you spend $7,500 on purchases in the first three months of account opening.
Cash back rate:;5% back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year. Youll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year and youll get an unlimited 1% cash back on everything else.
Annual fee:;$0
Why we chose it:;This is a very rewarding small business credit card with a large sign-up bonus and generous bonus categories all with no annual fee. If you max out your bonus spending in both 5% and 2% categories, that ends up being $1,750 in cash back earned each year. For a no-annual-fee credit card, thats great potential for earnings. Of course, if youre pairing this card with a;Chase Ultimate Rewards card;, your;rewards could be more valuable when used for travel as that $1,750 turns into $3,500 in potential travel cash-back value.
Heres How Cash Back Works On Credit Cards:
- Cash back with every purchase: The average cash rewards card offers about 1% back on all purchases. Some cards offer more cash back in certain spending categories.
- Chances for extra cash back: Many cash back credit cards offer initial rewards bonuses for spending a certain amount within the first few months your account is open. Some cards also have bonuses for referring a friend or meeting an annual spending threshold.
- Redeeming your cash: Cash rewards can usually be redeemed for a statement credit, check or direct deposit. You may also be able to redeem for a bank account deposit and set up automatic redemption.
- Restrictions: Some credit card companies make you earn a minimum amount of cash back before you can redeem.
- Cash back expiration: Sometimes, credit card cash back will expire a certain number of months after you earn it or after your card has been inactive for a certain period of time. Usually, it wont expire as long as your card stays open.
- Rewards devaluation: Unlike points and miles, whose value is set by the card issuer, cash back cant be devalued.
- Fees. Most cash back credit cards have no annual fee. Many have no foreign transaction fee. Some charge both types of fees, however.
Ultimately, you can check our editors latest picks for the best cash back cards on the market to weigh your options.
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Heres what decides how long a credit card refund takes:
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How Does Cash Back Work
Even though theyre just one type of rewards credit card, cash back credit cards are among the most popular; because they pay you back in cash rewards. Heres a basic rundown of how they work: Every time you use your card for an eligible purchase , the issuer pays you a percentage of your purchase price back at the end of the statement period or billing cycle.
For example, most cash back rewards cards pay somewhere around 1% to 2% of your purchase in cash back, with some paying as much as 5% cash back. If you have a flat-rate 1% cash back card and spend, say, $1,000 over the course of a statement period , at the end of the statement period you would have earned $10 cash back.
Depending on the card, you might earn bonus cash back on specific purchase categories or based on specific activity defined in your cardholder agreement. For example, Chase Freedom Flex offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate , and the Citi® Double Cash Card pays you 1% cash back on each purchase and another 1% cash back when you pay your bill for a total of 2% cash back on every purchase.