Contrary to popular belief, cashback credit cards actually allow you to earn "something for nothing." You can get anywhere from 1-5 percent back for every dollar you earn if you use your card for routine monthly spending and pay it off before interest is levied — all with absolutely no effort on your part.
Doesn't it sound like a great deal?And it is. The best cashback credit cards currently provide higher rewards and sweeter advantages than ever before, thanks to some healthy competition in the cashback credit card sector. If you sign up for the appropriate card, you can get anything from travel privileges to a free FICO score on your monthly bill and a large signup bonus. Even better, many of the best cash-back credit cards have no annual fees. You've come to the perfect place if you want to earn cash back as a percentage of your ordinary spending. This guide was developed to introduce you to the most excellent cashback card offers currently available to assist you in determining which card is best for your needs.
Best cashback credit cardsBefore we get into all of the details, here’s our list of the top cashback cards:
- Chase Freedom®
- Chase Freedom Unlimited? Card
- Citi Double Cash®
- Discover it® – Double cashback in your first year
- Bank of America Cash Rewards™ credit card
- Blue Cash Preferred® card from American Express
- Amex EveryDay® credit card from American Express
1. Chase Freedom®: best cashback rewards programThe Chase Freedom® card is known as the best cashback credit card for a good reason. It gives you 1% back on every dollar you spend, but it also gives you 5X points up to $1,500 in quarterly categories. The Chase Freedom® card also comes with a generous signup bonus, which is uncommon for a no-fee rewards card. Because the points you earn are part of the Chase Ultimate Rewards program, you can exchange them for gift cards, rebates, or Amazon.com shopping. These benefits, combined with the fact that the card has no annual fee, keep it at the top of its class. The Chase Freedom® card should be on your shortlist if you don't currently have one. Here are some more specifics:
- No yearly charge.
- Spend $500 on purchases within the first three months and get $150 in cash back.
- Earn 5X points in quarterly rotating categories, plus 1 point for every dollar spent on all other purchases.
- Purchases and balance transfers get a 0% APR for the first 15 months, which is ideal if you have high-interest debt (balance transfer fee applies).
- Balance transfer fees are 3% with a $5 minimum.
2. Chase Freedom Unlimited? card: a different way to earn points with ChaseIf you like the perks of the Chase Freedom® card but not the method it awards points, you should consider the Chase Freedom Unlimited card. You'll get 1.5 points for every dollar you spend with this card, and there's no annual fee to boot! Because the points you earn are part of the Chase Ultimate Rewards program, you can exchange them for gift cards, rebates, or Amazon.com shopping. When there is no yearly charge, getting 1.5 points per dollar spent on every transaction is good. This card is also a strong choice if you dislike keeping track of rotating categories.
- After spending $500 on your card within 90 days, you'll get a $150 signup bonus.
- Earn an additional $25 if you add an authorized user who makes a transaction within the first 90 days.
- No yearly charge.
- For the first 15 months, there is no interest on balance transfers or purchases (balance transfer fee applies).
- Balance transfer fees are 5%.
3. Citi® Double Cash: Earn a flat 2% on everythingIf you don't like keeping track of your spending by category or during special promotional periods, the Citi® Double Cash card could be the right fit for you. This simplified rewards program makes it simple to track or calculate how many points you might receive in any given month. With this card, you'll get 2% cashback on all transactions — 1% when you charge it and another 1% when you pay it off. And there are no ceilings, limits, or category restrictions to get the entire 2% back. Since its launch in 2015, the Citi® Double Cash card has grown in popularity, and the fantastic benefits are one of the reasons for this. Read the following vital details if you wish to learn more:
- Earn 2% cashback on everything you buy — 1% when you buy anything and another 1% when you pay it off.
- There are no caps, limits, or restrictions on categories.
- Spend $500 on your card within three months of account opening to earn $100 in bonus cash.
- For the first 18 months, the APR is 0%.
- Access to Citi® Private Pass®.
4. Discover it® – double cashback in your first yearThe Discover it® card, like the Chase Freedom® card, delivers 1 point per dollar spent on all transactions, plus 5X points in rotating categories every quarter. The Discover it® card, on the other hand, offers double cash back for a limited period in your first year. Discover will double your bonus to $400 after 12 months if you earn 20,000 points worth $200 in your first year. Given how easy it is to earn rewards and the fact that this card has no annual fee, that's a reasonably good bargain! Another feature that distinguishes this card is its liberal balance transfer terms. The current offer allows you to transfer debt and get a 0% APR for 14 months, albeit there is a 3% balance transfer charge. The Discover it® card might assist you in earning a lot of cashback, transferring a balance, or doing both.
- No yearly charge.
- Earn 1X points on all purchases and 5X points in quarterly rotating categories.
- Matching cashback for the first year.
- For 14 months, there is no interest on balance transfers (balance transfer fee applies).
5. Bank of America Cash Rewards™ credit card: low minimum spending requirementThe Bank of America® cash rewards credit card comes with a generous signup bonus and an easy-to-understand rewards scheme. After spending $500 in the first 90 days on this card, you'll receive a $200 cash bonus! This card is ideal for someone who doesn't use credit very often but yet wants to earn a signup bonus. The Bank of America®'s Cash Rewards credit card does not disappoint regarding ongoing rewards. With this card, you'll get 3% back on gas and 2% back on groceries up to $2,500 in combined grocery/gas expenditures each year, plus 1% back on everything else. There are no rolling categories to keep track of, and your awards will never expire. You can redeem your points in the form of a statement credit or a direct deposit into your Bank of America savings account when you're ready. That's all there is to it.
- No yearly charge.
- Earn 3% back on gas and 2% back on groceries up to $2,500 in combined grocery/gas expenditures each year, plus 1% back on all other purchases.
- Purchases and balance transfers completed in the first 60 days are eligible for a 0% introductory APR for 12 billing cycles (balance transfer fee applies).
6. Blue Cash Preferred® card from American Express: 6% cashback at Grocery StoresThe American Express Blue Cash Preferred® card is suited for families who want to earn great rewards on their everyday purchases. This card gives you 6% cash back at US supermarkets for up to $6,000 per year, 3% cash back at US gas stations and selected US department shops, and 1% cashback on everything else. Even better, the American Express Blue Cash Preferred® card comes with a $250 signup bonus once you spend $1,000 on the card in the first three months. If you only used the food benefit and spent $6,000 on groceries each year, you'd earn 36,000 points worth $360! That more than compensates for the card's $95 annual cost, and it's merely icing on the cake when you consider the long-term rewards. Here's where you can learn more about the prizes and bonuses:
- Spend $1,000 on the card in the first three months and get a $250 statement credit.
- Earn 6% cashback on your first $6,000 worth of supermarket purchases each year, plus 3% at gas stations and select department stores, and 1% on everything else.
- This is fantastic for transferring balance! Purchases and balance transfers have a 0% introductory APR for the first 12 months. (There is a balance transfer cost)
- A one-time fee of $95 is required.
7. Amex EveryDay® credit card from American Express: no fee, sweet signup bonusThe American Express Amex EveryDay® credit card comes with no annual fee and the opportunity for great rewards. With this card, you'll get 2x points on your first $6,000 in purchases at U.S. supermarkets, plus 1x points on everything else. Plus, if you use your card for 20 or more purchases in a billing cycle, you'll gain 20% more points. Although there is no annual fee with this card, it does come with a 10,000-point signup bonus if you spend $1,000 in the first 90 days. Once you've accumulated enough points, you can use them to pay for all or part of your trip, hotel stay, or vacations and cruises.
- No yearly charge.
- For the first 60 days, there is no balance transfer fee, and the first 15 months have a 0% APR.
- Spend $1,000 on your card during the first three months to earn 15,000 Membership Rewards points.
- Earn 2x points on your first $6,000 in purchases at US supermarkets, plus 1x points on everything afterward.
- When you use your card for 20 or more purchases in a billing cycle, you'll get a 20% bonus.
Rules for maximizing cashback credit cards without going into debtMany people are concerned about how obtaining incentives would affect their spending, and they are correct. With the average family credit card debt in 2019 above $15,000, it's simple to see how many people used credit with good intentions but ended up in debt. To get the benefits of a cashback card without falling into debt, you must be as deliberate as possible. This means using their rewards card only when they have a specific purpose in mind for most people. This list of cashback card rules will help you earn more cashback than you typically would while minimizing risk:
Rule #1: Use your cashback card for all of your everyday expenses but as part of a comprehensive spending plan.The best approach to get the most cash back is to use your cashback card for as many purchases as possible. While this implies using your card for large purchases, it also implies utilizing your card for all of your daily costs. Grocery shopping, utility bills, gas, and work supplies may quickly pile up, and if you use your card frequently, you can increase the amount of cashback you get. Your cashback credit card might be a helpful budgeting tool if you use a monthly budget or if you use it as a business credit card. You can see and track all purchases in the categories you spend the most by logging into your online account management. You can keep on track by tracking your credit card spending online if you put restrictions on particular budget categories. Keeping track of your spending will enable you to create a better budget and maximize your rewards. This tracking can also be used to see which categories you spend the most time in. For example, if you frequently travel, you may discover that upgrading to a travel rewards credit card offers the best value for your money. It would be the same if you spent the most money on gasoline or food.
Rule #2: Only charge what you can afford to pay back.When you're looking for cashback, the last thing you want is a debt you can't pay off. You shouldn't buy something if you haven't budgeted for it, let alone charge it with your cashback credit card! This is where the "budget" portion of your strategy kicks in. Only use your card for regular planned expenses and the payments you must pay regardless to maximize rewards without getting into trouble. You'll be in the best position to earn cashback without going into debt if you just charge what you can afford to pay back right away. If you're using one of these cards to conduct a 0% balance transfer, make sure to pay it off as soon as possible. You don't want to be paying a lot of interest because it would defeat the purpose of having a rewards card. In fact, you should avoid chasing any type of cashback compensation until you have resolved your past debt. You will only receive 1% to 3% of your expenditure back, but credit card interest might reach over 30%.
Rule #3: Always pay your bill in full and on time.When you look at how your FICO credit score is calculated, you'll notice that your payment history accounts for 35% of your total score. If you have a history of missing payments, your credit score will most certainly reflect this. Paying all of your invoices on time is also one of the most effective strategies to improve your FICO score over time. Nothing else is more crucial than the condition of your credit. Having a good credit score is essential if you want to take advantage of the finest cashback deals. Keeping this in mind, you should pay all of your bills in full and on time, every time.
Rule #4: Don’t go crazy pursuing too many signup bonuses.While pursuing several signup bonuses is a convenient method to make a lot of cashback, don't go overboard. Keeping track of too many cards can be challenging, and it's all too easy to overlook a signup incentive. Furthermore, if you're signing up for cards with annual fees, it's easy to lose track of them and end up paying for your rewards. Too many credit cards might also hurt your credit. The greatest technique is to add additional cards over a long period of time gradually. Adding a handful of additional cards at once can lower your FICO score because the amount of "new credit" you have determines your score.
Rule #5: Keep a simple credit card spreadsheet.If you plan on pursuing multiple signup bonuses or juggling many credit cards, do yourself a favor and create an essential rewards spreadsheet ahead of time. Using a simple spreadsheet, you can keep track of which cards you have, when you signed up, when you won the signup bonus, and when the yearly fee is due. It's easy to lose track of which cards you have over time, but a simple spreadsheet will keep you organized. You also don't need any specialized software. You can use Microsoft Excel to create a simple spreadsheet or simply write it down on paper.
Rewards credit card mistakes to avoid:
- Not receiving a signup bonus.
- Spending more in order to receive greater benefits.
- Forgetting how many signup bonuses you can obtain.
- Maintaining equilibrium.
- Getting yourself into a long-term debt situation.
- Hidden advantages that your cashback card could provide.
- Determine your spending habits.