Best Cashback Credit Cards

Welcome to the guide for the best cashback credit cards! Cashback credit cards are a popular type of credit card that offer rewards in the form of cashback on eligible purchases. These cards can be a great way to earn back a percentage of the money you spend on everyday purchases such as groceries, gas, and dining out. With so many cashback credit cards available, it can be overwhelming to choose the right one for you. In this guide, we’ll explore the top cashback credit cards available and help you determine which one is the best fit for your spending habits and lifestyle.

What are cashback credit cards?

Cashback credit cards are a type of rewards credit card that offer users a percentage of their spending back as cash rewards. These rewards are typically earned based on a certain percentage of the amount spent on purchases made using the card. Cashback credit cards can be a great way to earn money back on everyday purchases such as groceries, gas, and other essentials, and can help cardholders save money over time. In this guide, we will explore the best cashback credit cards on the market, as well as their features and benefits.

How do cashback credit cards work

Cashback credit cards work by offering a percentage of the money spent on the card back to the cardholder as a reward. For example, a card may offer 1% cashback on all purchases made with the card. So if you spend $1,000 on the card in a month, you would receive $10 back as a cash reward. Some cashback cards also offer higher rewards for certain categories of spending, such as groceries or gas. The cash rewards are typically applied as a credit to the cardholder’s account, reducing the amount they owe on their balance. Some cashback cards also offer other rewards, such as points or miles that can be redeemed for travel, merchandise, or other perks.

Benefits of cashback credit cards

Cashback credit cards offer several benefits to users. Here are some of the most notable benefits:

1. Earn cash rewards: With a cashback credit card, you earn a percentage of your purchases back in cash rewards. This can add up to significant savings over time, especially if you use your card for everyday purchases.
2. Flexibility: Cashback rewards can be used for anything, unlike other rewards programs that may be limited to certain retailers or products.
3. Simple to understand: Unlike other credit card reward programs, cashback rewards are straightforward and easy to understand. You don’t need to worry about complicated points systems or tiers.
4. Incentive to use credit card: Cashback credit cards can be a good incentive to use your credit card more often, which can help you build your credit score if you use the card responsibly.
5. Additional benefits: Many cashback credit cards also come with additional benefits such as travel insurance, extended warranties, and purchase protection.

Overall, cashback credit cards can be a great way to earn money back on your everyday purchases while also enjoying other benefits and perks.

Downsides of cashback credit cards

While cashback credit cards offer several benefits, they also come with some downsides. Here are some of the common drawbacks:

1. High-interest rates: Most cashback credit cards come with high-interest rates, which can quickly accumulate if you carry a balance.
2. Annual fees: Some cashback credit cards charge an annual fee, which can offset the cashback rewards you earn.
3. Limited rewards categories: Some cashback credit cards may only offer rewards for certain categories, such as groceries or gas, which may not align with your spending habits.
4. Minimum redemption thresholds: Some cashback credit cards may require you to accumulate a minimum amount of cashback rewards before you can redeem them.
5. Temptation to overspend: The cashback rewards may tempt you to spend more than you can afford, which can lead to debt and financial trouble.
6. Eligibility requirements: To qualify for the best cashback credit cards, you may need a high credit score, which may exclude some people from being able to take advantage of these benefits.

How to choose the best cashback credit card

Choosing the best cashback credit card for you can be a daunting task, given the number of options available in the market. However, by considering your spending habits, rewards program, fees, and other factors, you can find a cashback credit card that suits your needs. Here are some tips to help you choose the best cashback credit card:

1. Evaluate your spending habits: Look at your spending patterns to determine the categories where you spend the most. For instance, if you spend a lot on groceries, look for a cashback credit card that offers higher rewards for grocery purchases.
2. Check the rewards program: Cashback credit cards have different rewards programs, so ensure you understand the terms and conditions of the program. Some cards offer a flat-rate cashback on all purchases, while others have rotating categories with higher rewards.
3. Consider the fees: Check for annual fees, foreign transaction fees, and other charges that may apply to the cashback credit card. Ensure that the rewards outweigh the fees before you choose a card.
4. Check for sign-up bonuses: Many cashback credit cards offer sign-up bonuses, which can be a great way to earn additional rewards. However, ensure that you can meet the spending requirements to earn the bonus.
5. Look for additional benefits: Some cashback credit cards offer additional benefits like travel insurance, purchase protection, and extended warranties. Consider these benefits when choosing a card.

By following these tips, you can choose the best cashback credit card that suits your lifestyle and spending habits.

How to apply for a cashback credit card

To apply for a cashback credit card, you can follow these general steps:

1. Check your credit score: Before applying for a cashback credit card, it’s important to know your credit score. This can help you determine which cards you’re eligible for and increase your chances of approval.
2. Research cashback credit cards: Look for credit cards that offer cashback rewards that align with your spending habits. Some cards offer higher rewards on specific categories, such as groceries or gas, while others offer a flat rate on all purchases.
3. Compare fees and interest rates: Cashback credit cards may come with annual fees, balance transfer fees, and foreign transaction fees, so it’s important to compare these costs before applying. Additionally, make sure to check the card’s interest rates to ensure you can afford to pay off your balance each month.
4. Apply for the card: Once you’ve found a cashback credit card that suits your needs, you can typically apply online or in-person. You’ll need to provide personal information, such as your name, address, and social security number, as well as financial information, such as your income and employment status.
5. Wait for approval: After you submit your application, the credit card company will review your credit history and financial information to determine if you’re eligible for the card. If approved, you’ll receive your new cashback credit card in the mail within a few weeks.

Common features of cashback credit cards

Cashback credit cards typically come with a range of features that may vary depending on the issuer and the specific card. However, some common features of cashback credit cards include:

1. Cashback rewards: Cashback credit cards offer cash rewards for eligible purchases made with the card. The rewards may be a percentage of the purchase amount, typically ranging from 1% to 5%.
2. Sign-up bonuses: Many cashback credit cards offer sign-up bonuses, which can be in the form of cashback rewards, statement credits, or bonus points.
3. Annual fees: Some cashback credit cards charge an annual fee, which can range from a few dollars to several hundred dollars.
4. Interest rates: Cashback credit cards typically have variable interest rates, which can be high. It’s important to pay off the balance in full each month to avoid paying interest charges.
5. Balance transfer offers: Some cashback credit cards may offer a promotional balance transfer rate, allowing you to transfer high-interest balances from other credit cards to the cashback card at a lower interest rate.
6. Purchase protection: Cashback credit cards may offer purchase protection, which can include extended warranty coverage, price protection, and purchase protection against theft or damage.
7. Travel perks: Some cashback credit cards may offer travel perks, such as travel insurance, rental car insurance, and access to airport lounges.

How to best use cashback credit cards

To get the most out of your cashback credit card, you should follow these tips:

1. Choose a card that aligns with your spending habits: Look for a card that offers cashback rewards on the purchases you make most often. For example, if you spend a lot on groceries, choose a card that offers a higher cashback rate on supermarket purchases.
2. Pay off your balance in full every month: Cashback credit cards typically have high interest rates, so it’s important to pay off your balance in full every month to avoid interest charges. This way, you can earn rewards without incurring debt.
3. Maximize your rewards: Many cashback credit cards offer bonus cashback categories or rotating categories that offer higher cashback rates for a limited time. Be sure to take advantage of these offers by adjusting your spending accordingly.
4. Check for annual fees: Some cashback credit cards charge annual fees, which can eat into your rewards. Consider whether the rewards you earn are worth the annual fee before applying for a card.
5. Use your card responsibly: Only use your cashback credit card for purchases you can afford to pay off in full each month. Avoid using your card for cash advances or balance transfers, as these typically don’t earn cashback rewards and may come with additional fees.

By following these tips, you can make the most of your cashback credit card and earn rewards while staying financially responsible.

How to get the most out of cashback credit cards

Here are some tips to help you get the most out of your cashback credit card:

1. Choose a card with rewards that match your spending habits: Different cards offer different cashback percentages on different categories of spending. Choose a card that rewards you for spending in categories where you spend the most.
2. Use your card for all your purchases: To maximize your cashback rewards, use your card for all your purchases, big and small. However, make sure you can pay off the balance in full each month to avoid interest charges.
3. Pay your balance in full every month: Carrying a balance on your card can quickly eat into your cashback rewards, as interest charges will offset your earnings.
4. Look for sign-up bonuses: Many cashback credit cards offer sign-up bonuses that can help boost your rewards earnings. However, make sure you read the fine print and understand the requirements to qualify for the bonus.
5. Check for spending caps and expiration dates: Some cashback credit cards have spending caps or expiration dates on rewards. Make sure you know the terms and conditions of your card so you can maximize your earnings.
6. Redeem your rewards: Finally, make sure you redeem your cashback rewards regularly. Some cards may have restrictions on how and when you can redeem your rewards, so be sure to check the terms and conditions.

Pros and cons of cashback credit cards

Here are some pros and cons of cashback credit cards:

Pros:

1. Rewards: Cashback credit cards offer cash rewards on every purchase, which can be redeemed for cash or statement credits, allowing cardholders to save money on their purchases.
2. Flexibility: Cashback rewards can be used for any type of purchase, unlike rewards points or miles, which may be limited to certain categories or travel-related expenses.
3. Simplicity: Cashback credit cards are often easier to understand and use than other types of rewards credit cards. There are no complicated redemption rules or blackout dates to worry about.
4. Build credit: Using cashback credit cards responsibly can help you build your credit score, as long as you pay your bills on time and keep your credit utilization low.

Cons:

1. High fees: Cashback credit cards may come with high annual fees and interest rates, which can eat into the value of the rewards.
2. Limited rewards: Some cashback credit cards may limit the amount of cashback you can earn, or only offer rewards on certain categories or types of purchases.
3. Temptation to overspend: The lure of cashback rewards may tempt some people to overspend or make unnecessary purchases, leading to debt and financial problems.
4. Credit score requirements: The best cashback credit cards may require a good or excellent credit score to qualify, which may be a barrier for some people.

Overall, cashback credit cards can be a great way to save money on your purchases and earn rewards for your spending, as long as you choose a card that fits your spending habits and financial situation, and use it responsibly.

Cashback credit cards glossary

Here are some common terms related to cashback credit cards:

1. Cashback: A percentage of the amount spent on a credit card that is returned to the cardholder as a reward.
2. Annual fee: The fee charged each year by the card issuer for the privilege of using the card.
3. APR: The annual percentage rate is the interest rate charged on outstanding credit card balances.
4. Bonus categories: Specific categories of spending that earn a higher cashback rate, such as groceries, gas, or travel.
5. Credit limit: The maximum amount of credit available to a cardholder.
6. Foreign transaction fee: A fee charged by credit card companies for transactions made in foreign currency or outside of the country.
7. Introductory offer: An incentive offered by credit card issuers, such as a low interest rate or bonus cashback rate, for a limited time.
8. Minimum spend: The minimum amount a cardholder must spend in a certain period to be eligible for cashback rewards.
9. Rewards rate: The percentage of cashback earned on each purchase made using the card.
10. Statement credit: A credit issued to a cardholder’s account to offset a portion of their balance.

Alternatives to cashback credit cards

There are several alternatives to cashback credit cards, including:

1. Points rewards credit cards: These credit cards offer rewards points for every purchase made. These points can then be redeemed for various rewards, such as travel, merchandise, or cashback.
2. Airline miles credit cards: These credit cards offer airline miles for every purchase made. These miles can then be redeemed for flights, upgrades, and other travel-related expenses.
3. Retail credit cards: These credit cards are issued by specific retailers and offer rewards, discounts, and other perks for shopping at their stores.
4. Debit card rewards programs: Some debit cards also offer rewards programs, where cardholders can earn cashback or points for making purchases.
5. Personal loans: If you need to make a large purchase, a personal loan may be a better option than a credit card. Personal loans generally have lower interest rates and can be repaid over a longer period of time.

It’s important to carefully consider your spending habits and financial goals when choosing the best rewards program or credit option for you.

Types of cashback credit cards

There are several types of cashback credit cards available on the market. Some of the most common ones include:

1. Flat-rate cashback credit cards: These cards offer a flat cashback rate on all purchases. For example, a card may offer 1.5% cashback on all purchases.
2. Tiered cashback credit cards: These cards offer different cashback rates depending on the category of purchase. For example, a card may offer 3% cashback on gas and grocery purchases, 2% cashback on dining and entertainment purchases, and 1% cashback on all other purchases.
3. Rotating category cashback credit cards: These cards offer high cashback rates on specific categories of purchases that change every quarter. For example, a card may offer 5% cashback on gas purchases in one quarter and 5% cashback on restaurants in another quarter.
4. Sign-up bonus cashback credit cards: These cards offer a large cashback bonus for spending a certain amount within a specific timeframe, such as $150 cashback for spending $500 in the first three months.
5. Co-branded cashback credit cards: These cards are offered in partnership with a specific retailer or brand and offer higher cashback rates for purchases made at that retailer or brand.

It’s important to consider your spending habits and priorities to determine which type of cashback credit card is the best fit for you.

What are common cashback bonus categories?

Cashback bonus categories are specific spending categories that offer higher cashback rewards on purchases made in those categories. The specific bonus categories can vary depending on the credit card issuer, but some common cashback bonus categories include:

1. Groceries: Many cashback credit cards offer higher rewards for purchases made at grocery stores or supermarkets. Some cards may only include standalone grocery stores, while others may include all retailers that sell groceries.
2. Gasoline: Cashback credit cards that offer higher rewards for gasoline purchases are popular, as most people use their cars for daily transportation. Some cards may offer rewards for all gasoline purchases, while others may have specific gas station partners.
3. Dining: Credit cards that offer cashback rewards for dining purchases are popular among foodies and those who frequently eat out. The rewards can apply to restaurants, cafes, bars, and even food delivery services.
4. Travel: Some cashback credit cards offer bonus rewards for travel-related purchases, such as airfare, hotel stays, car rentals, and cruises.
5. Entertainment: Cashback credit cards that offer bonus rewards for entertainment purchases can include movie theaters, concerts, theme parks, and other leisure activities.
6. Online shopping: Some cashback credit cards offer higher rewards for purchases made online, including those made on popular e-commerce websites like Amazon, eBay, and others.

It’s important to note that bonus categories can change depending on the credit card issuer’s discretion, so it’s always a good idea to check the terms and conditions of a specific credit card before applying.

What are the requirements to apply for a cashback credit card

The requirements to apply for a cashback credit card can vary depending on the issuer and the specific card. In general, applicants will need to have a good credit score, typically in the range of 670 or higher. Other factors that may be considered include income, employment history, and existing debts. Some cashback credit cards may have specific requirements, such as being a student or having a certain type of employment. Before applying for a cashback credit card, it’s important to review the requirements and make sure you meet them to increase your chances of approval.

How to compare the best cashback credit cards

When comparing cashback credit cards, there are several factors you should consider to find the best option for your needs:

1. Cashback rewards: Look at the amount of cashback you can earn on purchases and whether there are any limitations or restrictions.
2. Annual fees: Determine whether the card charges an annual fee and whether the cashback rewards will offset this cost.
3. APR: Check the APR and whether there are any introductory rates available for balance transfers or purchases.
4. Sign-up bonus: Look for cards with a sign-up bonus or other incentives for new customers.
5. Redemption options: Consider how you can redeem your cashback rewards, whether it’s through statement credits, bank deposits, or gift cards.
6. Credit score requirements: Check the credit score requirements for the card to ensure you’re eligible to apply.
7. Additional perks: Look for additional perks such as travel insurance, extended warranties, or purchase protection.

By comparing these factors, you can find a cashback credit card that offers the most value for your spending habits and financial goals.

Are cashback credit cards worth it?

Whether cashback credit cards are worth it or not depends on your spending habits, lifestyle, and financial goals. If you frequently use your credit card for purchases and can pay off your balance in full every month, then a cashback credit card can be a great way to earn rewards on your spending.

Cashback credit cards typically offer a percentage of your spending back in the form of cashback, which can add up to significant savings over time. Some cashback credit cards also offer sign-up bonuses, which can provide a substantial amount of cashback upfront.

However, it’s important to be aware of the potential downsides of cashback credit cards, such as annual fees, high interest rates, and tempting rewards that may encourage overspending. It’s essential to compare different cashback credit cards to find one that fits your spending habits and offers the best rewards for your needs.

Overall, if you use your credit card responsibly and can take advantage of the cashback rewards without overspending, then a cashback credit card can be a great way to earn money back on your everyday purchases.

What’s the difference between cashback credit cards, rewards credit cards, and regular credit cards?

Cashback credit cards and rewards credit cards are both types of credit cards that offer incentives to cardholders. However, while cashback credit cards offer cash rewards for purchases made with the card, rewards credit cards offer points or miles that can be redeemed for a variety of rewards such as merchandise, travel, or experiences.

Regular credit cards, on the other hand, do not offer any rewards or cashback incentives. They are simply a means to make purchases and borrow money from a lender with the expectation of paying it back with interest.

One key difference between cashback credit cards and rewards credit cards is that cashback credit cards usually offer a fixed percentage of cash back on all purchases, while rewards credit cards may offer higher rewards rates for certain categories of spending, such as dining or travel.

Overall, the main difference between these types of credit cards is the type of incentives they offer to cardholders for using the card.

Why do some credit cards give cash back?

Credit card companies offer cashback rewards to encourage consumers to use their credit cards more often and to retain their loyalty. The cashback incentives are intended to attract new customers and retain existing ones, as well as to encourage them to use their credit cards for everyday purchases. When consumers use their credit cards for everyday expenses, they are more likely to spend more money, which benefits the credit card company. Additionally, cashback rewards give consumers an incentive to use their credit cards responsibly and pay their balances in full each month, as they receive a financial benefit in return.

What fees do cashback credit cards usually have?

Cashback credit cards typically come with several fees, such as annual fees, late payment fees, balance transfer fees, foreign transaction fees, and cash advance fees. However, some cashback credit cards waive some or all of these fees, depending on the specific card and the issuer. It’s important to carefully review the fees associated with each cashback credit card before applying to ensure that the rewards earned outweigh the costs of using the card.

How are cashback credit cards used?

Cashback credit cards are used like any other credit card, where you can make purchases with the card and then pay back the balance either in full or with minimum payments over time. The main difference is that with a cashback credit card, you will receive a percentage of your purchases back as a reward. This cashback reward can be redeemed as a statement credit, deposited into a bank account, or used to make purchases. To get the most out of a cashback credit card, it is important to use it responsibly and pay off the balance in full each month to avoid interest charges and fees. Additionally, it is important to understand the specific terms and conditions of your cashback credit card, including the percentage of cashback offered, any caps or limits on rewards, and any fees associated with the card.

How to maximize cashback on your cashback credit card

Here are some tips to maximize your cashback rewards on your cashback credit card:

1. Choose the right card: Look for a card that offers high cashback rewards in categories where you spend the most.
2. Monitor bonus categories: Keep an eye on the bonus categories offered by your card and make sure to take advantage of them during the promotional period.
3. Make all your purchases with your card: Use your card for all of your purchases, including bills and recurring payments, to earn cashback on everything.
4. Pay your balance in full: Avoid interest charges by paying your balance in full each month, so you can enjoy the full benefits of the cashback rewards.
5. Stack rewards: Use cashback portals or apps to earn extra cashback on top of your credit card rewards.
6. Consider using multiple cards: If you have multiple cashback credit cards, use them strategically to maximize your rewards in different categories.
7. Redeem rewards wisely: Choose a redemption option that offers the most value for your rewards, such as statement credits or direct deposits.

By following these tips, you can get the most out of your cashback credit card and earn more rewards for your spending.

Are there business cashback credit cards?

Yes, there are business cashback credit cards. These cards are designed specifically for small business owners, and they offer rewards for business-related expenses such as office supplies, advertising, and travel. Business cashback credit cards often have higher credit limits and more rewards for certain business expenses than personal cashback credit cards. Additionally, some business cashback credit cards offer tools and services that can help manage expenses and track employee spending.

Do cashback credit cards give you actual cash?

In most cases, cashback credit cards do not give you actual cash. Instead, they give you rewards in the form of points, miles, or cashback that can be redeemed for statement credits, gift cards, merchandise, or travel. Some cashback credit cards may allow you to request a check or direct deposit to your bank account for your earned rewards, but this is not always the case. It’s important to check the terms and conditions of your specific cashback credit card to understand how you can redeem your rewards.

Is the cashback from a credit card taxable?

Generally speaking, cashback rewards earned from credit cards are not considered taxable income by the IRS, as they are considered to be a rebate or a discount rather than income. However, there may be some exceptions, such as if you receive a large cashback bonus that is not tied to any specific purchases, or if you use your cashback rewards to offset business expenses. It is always a good idea to consult with a tax professional if you have any questions or concerns about how your cashback rewards may impact your tax situation.

The future of cashback credit cards

The future of cashback credit cards is expected to continue to evolve with advances in technology and changes in consumer spending habits. As more people opt for cashless transactions, cashback credit cards may become more popular, offering rewards for purchases made through mobile payment platforms or e-commerce sites. Additionally, as concerns about sustainability and environmental impact grow, there may be an increase in cashback credit cards that offer rewards for eco-friendly purchases or carbon offset programs.

In terms of technology, cashback credit cards may start to integrate more with mobile banking apps, allowing users to track their rewards and redeem them seamlessly. There may also be an increase in personalized offers and rewards based on individual spending habits and preferences.

Overall, as long as consumers continue to value rewards and incentives for their spending, cashback credit cards will likely remain a popular option in the credit card market.

Does cashback from credit cards expire?

Cashback rewards from credit cards can expire depending on the card issuer’s policies. Some issuers may have an expiration date for cashback rewards, while others may allow rewards to accumulate without an expiration date. It’s important to check the terms and conditions of your specific credit card to understand the expiration policy for your cashback rewards. Additionally, it’s always a good idea to regularly redeem your rewards to avoid losing them due to expiration.

FAQs about the best cashback credit cards