The Benefits of Cash-Back Credit Cards
Cash-back credit cards are popular because they provide tangible, easy-to-understand benefits. Who doesn’t like getting a credit on their monthly credit card statement or actual cash deposited into their account? Cash-back credit cards can be even more popular than gas credit cards and travel rewards cards.
Types of Cash-Back Credit Cards
Not all cash-back credit cards are created equal. Some offer the same cash-back rate on all purchases, while others offer higher rates on certain spending categories. Some cards provide bonus cash back on rotating spending categories every quarter, and a few even offer hybrid models with different types of rewards.
Factors to Consider
To assess cash-back card quality, we consider factors such as earning rate, rewards categories, spending caps, welcome offers, and redemption options. Flat-rate cash-back cards are straightforward, but tiered or rotating rewards categories can offer higher potential rates. Broad purchase categories and unlimited rewards are desirable.
Most cash-back credit cards require good to excellent credit, but some cards accept applicants with fair or impaired credit. Students also have more options for rewards credit cards. Keep in mind that generous cash-back rates usually come with specific spending categories or purchase limits.
APR and Balances
Cash-back credit cards may offer 0% APR promotions, but regular APRs can range from 10% to 20% or more. Carrying a balance can eat into your cash-back earnings, so it’s best to pay your bills in full and on time. Low-APR credit cards are better for carrying a balance.
Fees and Charges
Many cash-back credit cards have no annual fees and waive foreign transaction fees. However, it’s important to review the fine print to avoid unexpected fees. Choose a card that aligns with your spending habits and preferences.
Choosing the Right Card
To find the best fit, consider where you spend the most money, how you want to redeem your rewards, your willingness to pay an annual fee, the need for 0% APR financing, and the importance of a welcome offer. Use your answers to narrow down your options and find the ideal card.
For rates and fees of specific cards, please visit the rates and fees pages of the respective card issuers. Rewards programs and terms are subject to change.