Cash-back credit cards are one of the most popular types of rewards cards. Cardholders earn a percentage of their spending back, which can be used to offset their balance. If a card offers 2% cash back and you spend $100, you’ll receive $2 back.
Cash-back cards offer a minimum of 1% cash-back on all purchases, with some cards offering up to 6% cash-back in select categories. In some cases, there are even limited-time offers where cardholders can earn even more cash back. For instance, Capital One Savor Cash Rewards Credit Card offers 8% cash back on tickets purchased through Vivid Seats through January 2023.
These cards are a great choice for people who don’t want to deal with the sometimes confusing points or miles rewards cards.
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Types of cash back cards
Cash-back cards can be broken up into three main categories: flat-rate, bonus category, and rotating category. Here’s how each type works.
1. Flat-rate
Some cash-back cards offer the same amount of cash-back on every purchase. The best flat-rate cash-back cards earn you at least 2% cash-back on all purchases, with some cards offering up to 2.5%, such as the Alliant Cashback Visa® Signature Credit Card which offers 2.5% cash back on your first $10,000 of qualifying eligible purchases (1.5% for purchases over $10,000).
These cards are great for consumers looking for a simple cash-back program that requires minimal effort to reap great rewards. The Citi® Double Cash Card, which offers 2% cash back on every purchase (1% cash back when you buy, plus an additional 1% as you pay for those purchases) and charges no annual fee, makes CNBC Select’s list of the best cash-back cards. (see rates and fees.)
2. Bonus categories
Many cash-back cards offer bonus cash back in certain categories, such as grocery stores, travel, gas stations, and entertainment. Sometimes cash-back in the bonus categories is limited to a certain amount of spending each year, but it can also be unlimited.
The Blue Cash Preferred® Card from American Express gives cardholders 6% cash-back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash-back on select U.S. streaming subscriptions, 3% cash back on transit and at U.S. gas stations and 1% cash back on other purchases. Terms apply.
3. Rotating categories
Other cash-back cards offer 5% cash-back in select categories that rotate throughout the year (typically changing each quarter). Common categories include restaurants, gas stations, and grocery stores. These cards are popular among consumers looking to maximize rewards.
The Discover it® Cash Back and Chase Freedom® both offer 5% cash-back in rotating categories on up to $1,500 in combined quarterly purchases after you activate the bonus every quarter. After you reach the limit, it’s 1% on all purchases.
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