The points and miles we earn on credit cards are great for booking travel, but cash-back is king when it comes to flexible rewards that boost your financial bottom line.
And because cash-back is one of the easiest types of rewards to earn and redeem, you’ll rarely hear anyone complain of having too much cash-back in their rewards account. You can always find an immediate use for cash-back earnings.
While earning and redeeming can be simple, there are plenty of variables between cash-back credit cards (just like with cards that earn points or miles). For that reason, it takes some research to match up your own major spending categories to a credit card that earns the most cash-back on those purchases.
Additionally, knowing how you’ll receive your cash-back rewards becomes important so you can plan how to maximize those funds.
In this article, we cover how you earn cash back, the different ways cards pay out your cash-back rewards, and our recommendations for some of the best cash-back credit cards.
Let’s get started with the basics!
How Do Cash-back Credit Cards Work?
Cash-back credit cards have relatively simple rewards-earning and redemption structures. You spend on your card and get a rebate on a percentage of your purchases in the form of cash-back.
Some purchase categories earn more cash-back than others. For example, on one cash-back credit card you might receive 5% cash-back on office supply purchases, 3% cash-back on gas, and 1% on all other purchases.
On another, the percentages and categories could be totally different, so selecting a cash-back credit card that rewards your greatest spending categories is key. There can also be limits on the amount of cash-back you can receive in a given category.
Many cash-back credit cards offer introductory welcome bonuses, such as $150 cash-back for spending $1,000 in the first 3 months after card approval. These bonus offers fluctuate and are specific to each card, but can be another consideration when selecting your cash-back credit card.
Additionally, how you receive your cash-back can differ. You may earn points that can be redeemed for cash-back, receive your cash-back automatically as a statement credit, or accumulate earned cash-back in a separate account.
Let’s take a look at examples of some of the redemption processes you’ll find on different cash-back credit cards:
Cash-back Earned as Points
Certain cash-back marketed credit cards — such as the Chase Freedom Unlimited® — actually earn rewards as points that can be redeemed for cash-back.
Cash-back Automatically Applied as a Statement Credit
Some cash-back credit cards automatically apply the earned cash-back you earn each month as a statement credit, but this is relatively uncommon. There is no opportunity for accumulation and no manual redemption process.
Cash-back Accumulates in an Account
Cash-back credit cards — such as the Citi® Double Cash Card — allow the cash-back you’ve earned to accumulate in your account. You can request to use it whenever you’re ready.
Bottom Line: While it’s important to match up bonus category cash-back earnings on the credit card with your actual spending habits, you should also understand the process a cash-back card uses to distribute your cash-back earnings.
Which Is Better: Earning Cash-back or Points/Miles?
Using your cash-back creatively can help fund your travel goals. Image Credit: Chris Hassan
Is earning cash-back better than earning points/miles? This question is not easily answered, because the reward that is most valuable to you will be the one you can use to realize your goals.
If travel is your goal, points and miles can get you where you want to go using award tickets and hotel stays and offsetting travel-related purchases. While cash-back is undeniably flexible, you’ll need a strategy in place to collect the cash and apply it appropriately to those travel goals.
For example, if your goal is to use your cash-back earnings toward a family Disney vacation, you may want to purchase Disney gift cards, restaurant gift cards, or gas cards with each cash-back distribution.
This method works especially well if you’re using a cash-back credit card that applies the earnings as a statement credit automatically.
However, note that cash-back earnings may have a fixed value, while points/miles might be transferred to airline/hotel partners and used creatively for increased value. Conversely, cash-back is extremely liquid, but it may be difficult to liquidate points or miles for exactly what you want when you want it.
Bottom Line: Whether earning cash-back or points or miles is better for you depends on what you plan to do with the rewards and your spending priorities. If travel is not your priority, but having a little extra cash flow would help your financial bottom line, a cash-back credit card may be a good option.
The 10 Best Cash-back Credit Cards — Summary
The 10 Best Cash-back Credit Cards — Comparison Table
Earning cash-back rewards on a credit card that doesn’t charge an annual fee gives you a jump start on earnings because you don’t have to spend at a certain level to earn enough cash-back to offset that annual fee.
| Card |
Best For |
Welcome Bonus and Annual Fee |
Card Rewards |
| Chase Freedom Flex℠ |
Everyday purchases |
- Earn a $200 after you spend $500 on purchases in your first 3 months.
- Annual fee of $0
|
- 5% back in quarterly bonus categories (up to $1,500 in spend)
- 5% back on travel purchased through Chase Travel
- 3% back on dining and at drugstores
- 1% back on all other purchases
|
| Chase Freedom Unlimited® |
Rotating bonus categories |
- INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back!
- Annual fee of $0
|
- 5% back on travel purchased through Chase Travel
- 3% back on dining and at drugstores
- 1.5% back on all other purchases
|
| Citi® Double Cash Card |
Everyday purchases |
- For a limited time, earn $200 cash back after spending $1,500 on purchases in the first 6 months of account opening.
- Annual fee of $0
|
- 2% back on every purchase with 1% cash back when you buy, and 1% when you pay
|
| Citi Custom Cash℠ Card |
Your top spend category |
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening.
- Annual fee of $0
|
- 5% back on your highest eligible spend category each billing cycle up (up to $500 in spend)
|
| Blue Cash Preferred® Card from American Express |
Grocery and Gas purchases |
- Earn a $350 statement credit after you spend $3,000 in purchases in the first 6 months.
- Annual fee of $95 (rates and fees)
|
- 6% back at U.S. supermarkets (on up to $6,000 in spend each year)
- 6% back on select streaming subscriptions
- 3% back on transit purchases and U.S. gas stations
- 1% back on all other purchases
|
| Capital One Savor Cash Rewards Credit Card |
Dining and Grocery purchases |
- Earn $300 after spending $3,000 on purchases in the first 3 months.
- Annual fee of $95
|
- 4% back on dining, entertainment, and popular streaming services
- 3% back at grocery stores
- 1% back on all other purchases
|
| Bank of America® Customized Cash Rewards credit card |
Your choice category |
- Earn $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
- Annual fee of $0
|
- 3% back on the category of your choice
- 2% back at grocery stores and wholesale clubs (on up to $2,500 in combined purchases for 3% and 2% back categories each quarter)
- 1% back on all other purchases
|
| Ink Business Cash® Credit Card |
Office supply store, and on internet, cable, and phone service purchases |
- Earn $750 bonus cash back after you spend $7,500 on purchases in the first 3 months.
- Annual fee of $0
|
- 5% back at office supply stores and on internet, cable and phone services (up to $25,000 in spend)
- 2% back at gas stations and restaurants (up to $25,000 in spend)
- 1% back on all other purchases
|
| Ink Business Unlimited® Credit Card |
Everyday business expenses |
- Earn $750 bonus cash-back after you spend $7,500 on purchases in the first 3 months.
- Annual fee of $0
|
- 1.5% back on all purchases
|
| Capital One Spark Cash Plus Card |
Everyday business expenses |
- Earn up to a $1,000 cash bonus; $500 once you spend $5,000 in the first 3 months, and $500 once you spend $50,000 in the first 6 months of account opening.
- Annual fee of $150
|
|
The 7 Best Cash-back Personal Credit Cards
In no particular order, here are our favorite cash-back personal credit cards that offer a great balance of rewards and perks to cardholders.
Top Reasons To Get the Card
- 5% back in rotating quarterly bonus categories up to $1,500 spending per quarter
- 5% back on travel purchases through Chase Ultimate Rewards
- 3% back on dining and drugstore purchases
- Cell phone protection, purchase protection, and extended warranty coverage
The Freedom Flex card is one of our favorite cash-back cards thanks to its quarterly rotating bonus categories such as grocery stores, gas stations, wholesale clubs, home improvement stores, and more. You’ll earn 5% back on these purchases, on up to $1,500 in spend each quarter, allowing you to rack up $75 in cash-back each quarter.
Further, you can pair your card with a premium Chase credit card such as the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®, and receive access to the Chase transfer partners, or redeem your points for a 25% to 50% bonus through the Chase travel portal.
Your card also offers cell phone insurance coverage, purchase protection, rental car insurance, and more.
Top Reasons To Get the Card
- 5% cash-back on travel purchased through Chase Ultimate Rewards
- 3% cash-back at drugstores and on dining
- Unlimited 1.5% cash-back on all other purchases
- Travel and purchase protection
The Freedom Unlimited card is perfect for those who are looking to have one card to use for pretty much every purchase, as you know you’ll always get an uncapped 1.5% back on all non-bonused purchases you make with the card.
That said, the card also offers some solid bonus categories too like 5% back on travel purchased through Chase and 3% back on dining and drugstore purchases.
As with the Freedom Flex card, those who pair their Freedom Unlimited card with a premium Chase card like the Chase Sapphire Preferred card or Chase Sapphire Reserve card can redeem their points for an increased value of up to 50% more through the Chase travel portal or transfer to one of Chase’s airline and hotel partners, as well.
The Freedom Unlimited card also comes with rental car insurance, purchase protection, and extended warranty coverage.
Top Reasons To Get the Card
- Earn a total of 2% cash-back on every purchase: 1% when you make the purchase and 1% when you pay it off (earned as ThankYou Points)
With the Double Cash card, you’re going to earn a flat rate of 2% back on all purchases you make with the card. As far as non-bonused cash-back rewards cards go, 2% back on all purchases is about as good as it gets!
This card’s cash-back can be used for a statement credit, a direct deposit, a check, or on gift cards. Because your cash-back is earned as ThankYou Points, you can also redeem your points for travel by transferring them to Citi’s transfer partners — access the full suite of partners when pairing your Double Cash card with a premium ThankYou Rewards card such as the Citi Premier® Card.
Top Reasons To Get the Card
- 5% cash-back (on up to $500 each billing cycle) from your largest purchase category (includes restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs, and live entertainment)
Each month, you’ll get 5% back on whichever bonus category you spend the most on from a list of 10 options on up to $500 in spend. This allows you to adapt your 5% rewards month-to-month based on spending, and there is no need to preselect a category.
Plus, the card has no annual fee, offers a cash welcome bonus offer and 0% intro APR offer (as mentioned above), and no minimum redemption is required.
Top Reasons To Get the Card
- 6% back at U.S. supermarkets on up to $6,000 in spend each year
- 6% back on select U.S. streaming subscriptions
- 3% back on transit purchases
- 3% back at U.S. gas stations
Those who have expenses that often fall within one of the card’s 4 bonus categories can really rake in the cash-back with the Amex Blue Cash Preferred card. While the card does charge an annual fee, you could earn $360 in cash-back alone each year just by meeting the $6,000 threshold on U.S. supermarket purchases.
Top Reasons To Get the Card
- 4% back on dining, entertainment, and popular streaming services
- 3% back at grocery stores
Earning an uncapped 4% back on all dining, entertainment, and popular streaming services, along with 3% back at grocery stores, is an excellent combination … even more so when you consider that many people have expenses that regularly fall within these categories.
Top Reasons To Get the Card
- 3% back on category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings)
- 2% back at grocery stores and wholesale clubs
Another card that lets you optimize for the items you spend the most on, the Bank of America Customized Cash Rewards card lets you earn 3% back in the category of your choice from gas, online shopping, dining, travel, drugstores, or home improvement/furnishings.
That said, your 3% and 2% cash-back are limited to the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%.
The 3 Best Cash-back Business Credit Cards
Top Reasons To Get the Card
- 5% back on up to $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet, and cable TV services each account anniversary year
- 2% back on up to $25,000 spent in combined purchases at gas stations and restaurants
- Travel and purchase protections and benefits
The Ink Business Cash card is a compelling option thanks to its combination of 5% and 2% cash-back bonus categories, large welcome bonus, travel and purchase protections, and no annual fee.
Plus, those who hold other premium Chase Ultimate Rewards-earning cards will be able to pool their points together to then use the Chase travel transfer partners.
Top Reasons To Get the Card
- Unlimited 1.5% cash-back on every purchase
- Travel and shopping protections and benefits
Earning a solid 1.5% cash-back on every purchase, regardless of the category, makes earning lots of rewards an easy task. You can then redeem those rewards for what your business needs most — cash-back, travel, gift cards, Amazon purchases, or transfer to premium Chase cards for increased redemption value.
Top Reasons To Get the Card
- Unlimited 2% cash-back on every purchase
- 5% back on hotels and rental cars booked through Capital One Travel
While the card charges an annual fee, which might seem steep for a cash-back card, earning an uncapped 2% cash-back on all purchases can be well worth it for business owners who have a high level of spending each year.
Methodology – How We Selected the Best Cash-back Credit Cards
At Upgraded Points, we evaluate which cash-back credit cards are best based on how much value the card can provide to you. We make this determination by analyzing each factor that makes up a card, including its benefits, earnings structure, welcome bonus, redemption value/rewards program, fees, and more.
Here is some insight into our thought process when selecting the best cash-back cards:
Associated Benefits
One thing that can really help a card stand out from the crowd is the benefits that it offers. These could be benefits such as purchase protection, extended warranty protection, travel insurance, and more. This is why we give extra points to cash-back cards that include benefits that offer more value to cardholders.
Earnings Structure
Perhaps the most important aspect of a cash-back credit card is how much cash-back you can actually earn. Usually, cards will either offer a flat cash-back rate on all purchases or will offer certain bonus categories such as gas and groceries. In either case, we evaluate how compelling the card’s cash-back rates are when deciding on the best cards.
Welcome Offers
Some of the best cash-back cards offer a cash welcome offer after meeting a minimum spend requirement. This can be a great way to get some extra cash in your pocket, as these welcome bonuses can be upwards of $200 to $300 at times. Given that welcome bonuses are a one-time bonus, and because of how lucrative these bonuses can be, they are a factor in how we evaluate cards.
We’ve provided you with the current welcome bonus information available for each card, but we encourage you to confirm the welcome bonus and review any earnings offers before applying for any card.
Fees
Of course, another important factor of a cash-back card is the fees it does, or does not, charge. These can include annual fees, foreign transaction fees, late payment fees, and more.
Redemption Value
When it comes to cash-back cards, most often your cash-back options will be limited to a statement credit or having cash deposited into your checking account. However, there are other cash-back cards that offer a flexible rewards approach and expand your redemption options beyond just cash-back.
Hot Tip: While the most desired benefits and features of a card will vary by person, our holistic approach gives readers the full picture of what they can expect from every card we review. To learn more about how we review cards, read through our methodology page.
Types of Cash-back Credit Cards
For the most part, there are 4 types of cash-back credit cards.
Flat-rate Cards
Flat-rate cards offer a flat rewards rate on every purchase you make, with no unique bonus categories. Cards in this category usually offer 1.5% to 2% cash-back on all purchases.
Bonus Categories
These cards have predetermined bonus categories that offer elevated rewards. An example might be a card that offers 3% cash-back on dining and groceries and 1% cash-back on all other purchases.
Rotating Bonus Categories
Some cards offer rotating bonus categories that are not predetermined for you when you sign up for the card. An example of this is the Freedom Flex card, which offers 5% cash-back on a quarterly rotating category such as gas or purchases at Amazon.
Customizable Bonus Categories
Customizable cards offer a list of bonus categories for you to choose that you’d like to be your increased earnings. An example of this is the Bank of America Customized Cash Rewards card, which offers 3% cash-back in the category of your choice between gas, online shopping, dining, travel, drugstores, or home improvement/furnishings.
Pros and Cons of Using a Cash-back Card
Pros
The biggest pro of using a cash-back credit card is that it earns you cash-back rewards on every purchase that you make. This is a great way to earn some added savings on your expenses, as this cash-back can really add up throughout the year.
Beyond that, most cash-back credit cards don’t have an annual fee, include added perks like purchase protection, and might even offer a welcome bonus.
Cons
The downside to cash-back credit cards is that there isn’t as much upside as you’d find with certain travel rewards cards. Further, they can also have caps on the amount of cash-back you can earn, and they often charge foreign transaction fees.
How To Compare Cash-back Cards
Deciding which cash-back card is right for you is a personal decision.
The first thing you will want to consider is the card’s bonus categories. Are you hoping to maximize the cash-back you earn on certain types of purchases like groceries? Or do you prefer to earn a flat cash-back rate on all purchases?
Once you know which rewards setup is best for you, then you should consider what type of benefits you might be looking for in a card. Perhaps one that offers perks like purchase protection and extended warranty coverage to help cover the items you buy with your card.
You’ll also want to consider other key features like whether or not the card offers a lucrative welcome bonus, and whether or not it charges an annual fee.
Final Thoughts
Credit cards that earn cash-back rewards are great for consumers who pay off their credit card balances each statement period. Carrying over a balance and being charged interest would dissolve any benefit of earning cash-back.
Also, we don’t focus on welcome bonuses for cash-back cards because they’re constantly changing — but these initial bonuses can help you jump-start your cash-back earnings and should definitely be considered when selecting a cash-back credit card!
And finally, we’ve mentioned a lot of great cash-back cards here, but the list is not all-encompassing, as there are just too many to mention. We’ve also abbreviated any benefit descriptions, so you’ll want to click on the links provided for a more in-depth review of cards you’d like further details on.
The information regarding the Capital One Savor Rewards Credit Card, Bank of America® Customized Cash Rewards Credit Card, and Capital One Spark Cash Plus Card was independently collected by Upgraded Points and was not provided nor reviewed by the issuer.
For rates and fees of the Blue Cash Preferred® Card from American Express, click here.
