The best cash back credit cards give you flexibility in payments and great cash rewards.
Nowadays, with so much competition in the financial market, banking institutions are offering various perks and add-ons to customers to get them to apply.
One of the most popular offers is cash back, where you can earn actual money in return for making everyday purchases.
With so many credit card options available, though, it can be challenging to wade through the noise to find the card that offers you actual cash rewards that are worth it in the long run.
What Are Cash Back Credit Cards?
They are credit cards where the issuer offers you points, cash, or miles you can redeem online from specific merchants.
What Is Cash Back?
Simply put, they are cash rewards or bonuses you will earn from the financial institution that issues your credit card based on specific categories of purchases.
Some credit cards will issue you a flat amount of cash back based on the number of purchases you make. Others will give you a percentage of all your charges.
You can sometimes use the cash back bonus rewards that you earn on your credit card to pay off part of your credit card balance.
In some cases, you can even request the financial institution send you a check for the amount of your cash back rewards. Then, you can then turn into cash or deposit into a checking or savings account.
Should You Get A Cash Back Credit Card?
If you pay off the entire balance each month, using a cash back credit card makes good financial sense.
Why not earn money while you spend money without paying interest?
You can earn from 3% to 6% on purchases up to a specific calendar year spending limit.
Most credit card issuers don’t charge a massive fee for the privilege of earning cash on purchases. Plus, you can always log in to your account and see how much money you’ve earned.
Many people have 2-3 of the best cash back credit cards and use the one that earns the highest rate depending on the purchase.
10 Best Cash back Credit Cards 2022
Here is a list of the five best cash back credit cards, along with the basic details of each one.
Discover it Cash Back
One of the best cash back credit cards no annual fee
The Discover it Cash Back credit card is another great cash back credit card. You’ll need a credit score in the 670-850 range to receive approval.
There is no annual fee, and it has a 0% APR intro for both purchases and balance transfers for the first 14 months to those who qualify. The regular APR is variable between 11.99% and 22.99%.
The Discover it card has a tiered cash back system. You’ll earn 5% cash back at specific places that change each quarter.
Discover will set the category each quarter and notify you. For example, it could be restaurants, gas stations, or grocery stores.
In addition, Discover will automatically match all the cash back you’ve earned at the end of your first year. That’s why it’s one of the best cash back credit cards out there.
You’ll need an SSN to apply for the Discover it Cash Back credit card.
Fortunately, it is possible to get a credit card without SSN.
Bank of America Customized Cash Rewards credit card
The best grocery cash back credit card
To qualify, you’ll need a credit score of 670-850. The company offers an introductory 0% APR on purchases and balance transfers for 12 months for those who qualify.
Purchases after that will be subject to the regular variable APR of between 13.99% and 23.99%.
The Bank of America Cash Rewards credit card offers 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%.
You’ll get 3% cash back in a category that you choose. 2% at grocery stores and wholesale clubs. Plus, an unlimited 1% cash back on purchases in all other categories.
The cash back and bonus rewards never expire. If you’re a Preferred Rewards member, you’ll earn anywhere from 25% to 75% more points on each of your purchases.
American Express Blue Cash Preferred
The best cash back gas credit card
To apply for this card, you’ll need a credit score between 670-850 most likely. American Express offers a 0% intro APR on purchases and balance transfers for the first 12 months. Their variable APR after that is between 13.99% and 23.99%.
After you make $1,000 in purchases within the first three months of opening the account, you’ll get a $250 statement credit. In addition, you’ll earn tiered cash back based on the categories of your purchases.
For example, you’ll get 6% cash back on any streaming subscriptions within the US. Plus, 3% cash back on transit purchases such as parking, tolls, trains, and buses.
You’ll also earn 6% cash back on supermarkets in the US for the first $6,000 per year spent there and 1% cash back after that. In addition, you’ll get 3% cash back at US gas stations and 1% cash back on all other purchases you make.
One thing to note about the Blue Cash Preferred Card from American Express is that it does have a $95 annual fee. As such, you’ll want to make sure the cash back you receive each year makes up for that fee you’ll have to pay.
American Express will either require an SSN, ITIN, or foreign passport to apply for one of their credit cards. It’s definitely one of the best cash back credit cards.
SoFi Credit Card
One of the best cash back credit cards with no foreign transaction fees
The required credit score is 690 to 850, and there’s no annual or foreign transaction fee.
Cardholders must open and fund a SoFi Money and a SoFi Invest account to earn up to $100. In addition, SoFi rewards cardholders a 1% discount on the current APR when making 12 payments on time.
Bonus perks include cell phone protection up to $1,000, Mastercard ID theft protection, and a $10 Lyft credit for 5 rides per month.
Chase Freedom Unlimited
One of the best cash back credit cards for excellent credit
Chase Freedom Unlimited is one of the best cash back credit cards available. You’ll most likely need a credit score in the 670-850 range to qualify for the card.
There are no annual fees associated with the card, and the regular APR is variable between 14.99% and 23.74%.
If you have good credit, you may also qualify for perks such as a 15-month intro purchase APR of 0% and a 15-month intro balance transfer APR of 0% as well.
The Chase Freedom Unlimited Card offers a flat $200 cash back bonus after you spend $500 in purchases within the first three months of opening your account. After that, you can earn unlimited 1.5% cash back on every purchase, with no restrictions.
You will need a Social Security number or ITIN to apply for the Chase Freedom Unlimited card.
This issuer has a premier rewards program called Chase Ultimate Rewards that lets you redeem cash rewards.
Capital One Spark Classic
One of the best cash back credit cards for fair credit
One of the best cash back business credit cards
Spark Classic from Capital One is a great cash back credit card for businesses.
Your credit score can be “fair,” that is: you have a limited credit history, or you had another credit card or other credit for less than three years. This includes students, people new to the US, or authorized users on someone else’s credit card.
There’s no annual fee, the APR is 26.99% variable, and you can earn unlimited 1% cash back on every purchase for your business, with no minimum to redeem.
If you use it responsibly, this is one of the best cash back credit cards for credit building.
Do you have bad credit? Here are the best credit cards for bad credit.
Citi Custom Cash Card
One of the best cash back credit cards no annual fee
Applicants need a credit score from 670 to 850.
After spending $750 within the first 3 months, cardholders earn $200, that are redeemable for cash.
0% introductory APR on balance transfers and purchases for 15 months. After that, the variable APR averages $13.99% to 23.99%. There is no annual fee.
This is one of the best cash back credit cards because you choose from 10 eligible spending categories to earn 5% cash back on $500 per billing cycle.
The cumulative total of purchases in each category determines the top category, which changes with each billing cycle.
Capital One SavorOne Cash Rewards Credit Card
One of the best cash back credit cards for excellent credit
The required credit score is 690 to 850.
Unlimited 3% cash back for grocery stores excluding superstores, entertainment, dining, and streaming services. Plus, 8% cash back on tickets at Vivid Seats until January 2023.
New cardholders earn a one-time $200 cash bonus when spending $500 in the first 3 months.
Cash back rewards do not expire for the life of the account, and there’s no limit on earnings, making it one of the best cash back credit cards.
No annual or foreign transaction fee.
In the first 15 months, 0% APR introductory fee on purchases and balance transfers and from 14.99% to 24.99% APR after that.
U.S. Bank Card+ Visa Signature Card
The best visa credit card cash back
Requires a credit score of 690 – 850. Approved applicants for this cash back card receive a $200 bonus when spending $1,000 the first 120 days for eligible purchases.
You earn 5% cash back on $2,000 for two preferred categories. Also 5% for prepaid air, hotel, and car reservations booked through the Rewards Travel Center.
There’s a 0% introductory APR on purchases and balance transfers within the first 15 billing cycles and a variable APR 13.99% to 23.99% after that.
U.S. Bank does not charge an annual fee.
Wells Fargo Active Cash Card
One of the best cash back credit cards no annual fee
The minimum credit score is 690 to 850 with no annual fee or expirations on sign-ups and cash rewards.
Within the first 3 months after spending $1,000 in purchases, cardholders can earn a $200 cash bonus while earning unlimited 2% cash rewards on purchases.
The 0% introductory APR runs for 15 months on purchases and qualifying balance transfers. Then, the variable APR averages 14.99% to 24.99%.
Cardholders receive hotel benefits and $600 of cell phone protection when they pay their cellular bill using the Wells Fargo cash back credit cards.
*Star ratings for all cards taken from WalletHub on Feb. 2022
How To Choose One Of The Best Cashback Credit Cards
Before you select a card, narrow down your choices to one or two preferred cards.
Compare benefits such as a sign-up bonus, 0% introductory APR period, bonus categories you prefer, and higher cash back percentages.
You reduce your overall buying costs by choosing a card issuer that doesn’t charge an annual fee and has higher-paying bonus categories.
Flexibility is an important consideration when it comes to how you redeem your earned cash. For example, a card issuer may post what you’ve earned as a credit to your statement, deposit it into your bank account, or send a check.
Depending on which cash back credit card you choose, you can redeem rewards for merchandise and gift cards or transfer points to another card.
The best card for you is the one that matches your spending habits, budget, and lifestyle while providing the most benefits.
Pros And Cons Of Using A Cash Back Card
- Cash back credit cards offer values that regular cards do not (like earning cash on purchases or redeeming bonus cash rewards for free flights or hotel stays)
- Any fees charged are usually reasonable
- Some cards have sign-up bonuses of $200 to $300 or more
- Higher cash back on certain purchases
- Most do not have an annual fee
- Some have 0% introductory APR
- Low cash-back percentages on select categories
- Sign-up bonuses may be low, or card issuers don’t offer them
- High-interest rate if you carry a balance
- Cards with annual fees eat up earnings
- Most cards do not provide travel rewards
- Issuers base APRs on the card holder’s creditworthiness which isn’t helpful for individuals with bad or low credit scores
- Some cards have a cash back ceiling limiting how much a cardholder can earn for regular and bonus categories
How To Make The Most Of Your Cash Back Credit Card
Tips to get the most from your cash back credit card.
- Most card holders receive an account notification when eligible for rotating bonus categories. As a result, you can plan to make strategic purchases during those periods.
- Check out your card’s shopping portal to get the best deals.
- Get more than one card to access higher-paying categories to maximum cash back.
- Don’t overspend and exceed your budget just to reach a spending limit and earn more cash. You could begin a spiraling debt cycle. Instead, choose a card with a minimum spending limit that’s within your financial means.
- Pay off the card each month; otherwise, your cash back earnings go toward interest.
- Take advantage of perks offered by specific card issuers, such as free hotel breakfasts, free museum entrance on certain days, or free seat upgrades on flights.
- Save the cash you earn to go toward a bigger, future purchase.
Types Of Cash Back Credit Cards
Flat-Rate Cash Back
Card issuers charge the same cash back percentage regardless of your spending or the merchandise category.
You aren’t limited to the same percentage for purchases.
With multiple cash back rates, you can receive a higher rate for dining out and a lower rate for a subscription streaming service. You get the best cash rewards based on where you usually spend the most money.
You receive higher cash back rewards in specific categories monthly or quarterly (for example), or you can buy from a broad category such as gas stations or designated retailers.
Some card issuers allow you to change your categories each month. Otherwise, it defaults to a predetermined category.
For example, you could choose 3% cash back your preferred category, 2% at grocery stores, or 1% unlimited cash back for all other purchases.
Common Cash-Back Bonus Categories
Cash back dollars/points add up fast, so having a card with purchase categories that match what you make purchases for is an important consideration.
- Groceries: Common categories include supermarkets/grocery stores, warehouse clubs, and superstores. You can buy household items, food, and gift cards for your favorite retailers. In addition, you get cash back at fast-food and in-person dining restaurants, which covers tips and the food.
- Gas: Use cash back credit cards to buy gas for your vehicle or get money back when shopping at drugstores, home improvement stores, or when traveling.
- Bonus: Cash-back bonus categories include gyms and fitness clubs and major retailers like eBay, Walmart, Target, and Amazon.
Categories can change from month-to-month, quarter-to-quarter, and year-to-year.
What Credit Card Earns The Most Cash-Back?
There are many best cash back credit cards, but they all work differently. Which one’s the best depends on what card you have and the buying category.
For example, American Express pays 6% when buying groceries or streaming capped at $6000 per year. In addition, you can receive 3% on gas purchases and train and bus fares. American Express sets annual spending limits for each category.
A Citi cardholder can earn 5% on an eligible higher-paying category on the first $500 they spend.
Likewise, a Chase Freedom Flex cardholder receives 5% cash back on purchases totaling $1,500 for each quarter that they activate a rotating category.
With a Capital One Card, you receive 4% cash back on dining, entertainment, and streaming service categories.
An Amazing Alternative To Credit Cards
Credit cards are incredible financial products, but they’re not always the best option for everyone.
Let’s say you need $2,000, and the issuer gives you a limit of exactly $2,000. Unfortunately, you shouldn’t use your limit because that might hurt your credit. The most common recommendation is not to use no more than 30%. That’d be only $600!
And that is if you even receive approval.
If you cannot qualify for a cash back credit card or if you’re looking to borrow a lump sum of money, Camino Financial could be an excellent option for you. We offer small business loans and personal loans.
We have minimal requirements and a lending process that only takes 2 days!
You Can Get The Top Cash Back Credit Card
One of the best ways to get value out of a credit card is getting one that helps you earn cash rewards for the charges you make. A great way to do that today is to choose from the best cash back credit cards available to you.
We live up to our motto of “No Business Left Behind” by offering top-notch financial products as well as informational and educational resources to each of our members.
Subscribe to our Camino Financial newsletter to get our resources for business growth.
What is the best cash back credit card?
There is no easy answer. It really depends on what bonus rewards you prize the most.
That said, American Express Blue Cash Preferred has some of the best perks.
How does a cash-back credit card work?
The cardholder makes a purchase and earns a percentage ranging from 1% to 6% based on the category. As cash rewards accumulate, the cardholder can redeem points or dollars based on the card issuer’s payment policy.
What’s the highest paying cash-back credit card?
Cards with rotating categories offer the highest rates, which generally change every quarter.
Most card issuers require cardholders to activate these higher rates every quarter by logging into their accounts.
Also, the card company sets a spending limit to receive the rate. Purchases that exceed the limit don’t earn the higher rate.
Is cash back from a credit card taxable?
Most earnings are not taxable because the IRS considers the money as rebates rather than income since cardholders must make purchases to earn cash.
However, welcome and referral bonuses could be taxable if the credit card company sends you a 1099 for taxable cash rewards over $600.
Does cash back expire?
After a period of inactivity or if you close the account, they can expire with some credit card companies.
If you keep the account open and in good standing, cash back rewards already earned appear on your statement until you redeem them.
Do cash back credit cards actually give you cash?
Some do, some don’t. It depends on the card holder’s policy. If they do, they usually deposit your cash back earnings into a bank account or send a paper check.
Are cash back credit cards worth it?
They’re a worthwhile way to reduce expenses as long as you use them to earn money for purchases you normally make, don’t pay an annual fee, and receive cash rewards like a signup or referral bonus.
Should I get a cash back card or a travel card?
Travel cards are best for frequent travelers saving their earnings for a vacation. Plus, they get benefits such as airline fee credits, free checked baggage, and no foreign transaction fee.
Each person must weigh each card type’s pros and cons to determine which is best.