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The right cash back credit card can save you hundreds of dollars per year on average. Some cards can save you upwards of $600 in their first year alone, according to NextAdvisor’s analysis.
With numbers like that, cash back credit cards are great tools for saving money on the regular items already in your monthly budget. Some earn a flat rate every time you swipe your card, while others earn more when you shop specific categories or operate within a rotating schedule of bonus categories.
With great rewards comes great responsibility. At NextAdvisor, we believe eliminating high-interest debt balances and building healthy credit habits are essential prerequisites to enjoying the perks of a rewards credit card.
Even the best cash back rewards won’t outweigh the cost of revolving debt on a card earning double-digit interest. What’s more, you may risk rejection from issuers, who often reserve approval for applicants with the best credit scores, especially in today’s economic environment. Before seeking the best cash back rewards for your wallet, make sure you’re prepared to use your new card responsibly. Establish a great credit score alongside healthy credit habits like timely payments, paying balances in full, and low credit utilization.
The Best Cash Back Cards
Chase Freedom Unlimited®
Earn 5% on travel purchased through Chase. Earn 3% on dining at restaurants and drugstores. Earn unlimited 1.5% cash back on all other purchases.
- Intro bonus: $200
- Annual fee: $0
- Regular APR: 14.99% – 23.74% Variable
- Recommended credit score: 670-850 (Good to Excellent)
Chase Freedom Unlimited is the ultimate flexible rewards card. It checks all of our boxes for a great cash back credit card, and can make a great entry point for beginners looking to enter the rewards game.
This card makes the most of everyday rewards through its combination of flat and tiered cash back rewards. To begin, you’ll earn a flat 1.5% cash back on every purchase you make, without having to track categories or activate rewards. But you can also earn a boosted 5% on travel purchased through Chase Ultimate Rewards, 3% on dining at restaurants (including most takeout and delivery), and 3% at drugstores. Within your first year of account opening, you can also qualify for a $200 bonus after spending $500 within the first three months.
While some other cards on our list did marginally outpace the Freedom Unlimited’s ongoing rewards value, this card’s simplicity and universality, combined with its unbeatable first-year rewards, set it apart.
And helping lift Freedom Unlimited even further over the top are the additional benefits you’ll get from Chase, designed with the 2020 everyday spender in mind. These include 5% cash back on qualifying Lyft rides through March 2022, and complimentary DashPass access from DoorDash for 3 months followed by 9 months of DashPass membership for 50% off (activate by 12/31/21).
Value
First-year rewards value: $450.75
Subsequent annual rewards value: $250.75
Citi® Double Cash Card
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- Intro bonus: No current offer
- Annual fee: $0
- Regular APR: 13.99% – 23.99% (Variable)
- Recommended credit score: 740-850 (Excellent)
Not only does the no annual fee Citi Double Cash Card* offer lasting annual return on your spending, but it has built-in incentive to pay your balances in full each month.
This card offers 2% cash back on every purchase you make, but you’ll earn just 1% back as you make each purchase and the other 1% only after you pay it off. That means if you carry a balance month-to-month, you’re not going to get the full value from this card.
If you can pay your statement balances in full, you’ll earn 2% back on every purchase, which is one of the highest rewards percentages you’ll find on the market today. There is no welcome or first-year bonus, so the Citi Double Cash is best for its long-term value.
Value
First-year rewards value: $265.16
Subsequent annual rewards value: $265.16
Citizens Bank Cash Back Plus™ World Mastercard®
1.8% cash back on everything you buy, with no limit on how much you can earn.
- Intro bonus: No current offer
- Annual fee: $0
- Regular APR: 15.99%, 19.99%, or 23.99% (Variable)
- Recommended credit score: 740-850 (Excellent)
Citizens Bank’s Cash Back Plus World Mastercard* might fly under-the-radar compared to other cards on our list, but it offers great value for any spender with unlimited 1.8% cash back on every purchase you make.
Read our full review of Citizen Bank’s Cash Back Plus World Mastercard
This card is a hassle-free solution for straightforward earnings. While it offers no welcome bonus, the Cash Back Plus charges no annual fee and offers high value no matter where your monthly spending is focused.
Value
First-year rewards value: $238.64
Subsequent annual rewards value: $238.64
Capital One SavorOne Cash Rewards Credit Card
Earn unlimited 3% cash back on dining and entertainment. Earn 2% at grocery stores. Earn 1% on all other purchases.
- Intro bonus: $200
- Annual fee: $0
- Regular APR: 15.49% – 25.49% (Variable)
- Recommended credit score: 670-850 (Good to Excellent)
The overall value of Capital One’s SavorOne Cash Rewards Credit Card* is tough to beat among tiered cash back cards. You’ll earn unlimited 3% cash back on dining and entertainment, 2% back at grocery stores, and 1% on everything else for no annual fee, plus a $200 cash bonus after spending $500 within the first three months of account opening.
The SavorOne is the little sister of the Capital One Savor Cash Rewards Credit Card*; with the Savor, dining and entertainment cash back is boosted to 4% and the welcome bonus is $300 (after spending $3,000 within the first three months of account opening), but you’ll also pay a $95 annual fee.
Read our full review of the Capital One SavorOne Cash Rewards card
We chose the SavorOne for our list rather than the Savor because, while you won’t earn as much the first year, we believe the SavorOne has more long-term value and will appeal to consumers who are turned off by an annual fee.
For the average American, we found the Savor’s first-year value to equal $582.77, followed by $282.77 in subsequent years. If you spend heavily in these categories, the Savor may be a better option for you. But using our averages, it’ll take most cardholders just three years to make up the difference with the SavorOne and outpace its value when accounting for the annual fee. If you’re seeking lasting rewards value, we believe the SavorOne is the better choice between the two.
Value
First-year rewards value: $510.92
Subsequent annual rewards value: $310.92
Blue Cash Preferred® Card from American Express
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 including taxis/rideshare, parking, tolls, trains, buses and more. 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
- Intro bonus: $250
- Annual fee: $95
- Regular APR: 13.99%-23.99% Variable
- Recommended credit score: 670-850 (Good to Excellent)
In terms of purely monetary rewards value, the Blue Cash Preferred Card from American Express is one of the highest-earners on our list, and it’s one of the only cash back cards we believe is worth the $95 annual fee.
You’ll earn 6% cash back at U.S. supermarkets (up to $6,000 in purchases each year, then 1%), 3% cash back at U.S. gas stations and transit, and 1% on everything else. While it didn’t factor into our calculations, you’ll also get 6% back on select U.S. streaming subscriptions. And the welcome bonus is strong, too: you can earn a $250 statement credit after spending just $1,000 within the first three months of account opening.
Read our full review of the American Express Blue Cash Preferred card
For those looking to avoid any annual fees, the Blue Cash Everyday® Card from American Express is another good option, offering 3% back at U.S. supermarkets (on up to $6,000 in purchases each year, then 1%), 2% at U.S. gas stations and select U.S. department stores, and 1% on everything else. But we believe the Blue Cash Preferred is worth the cost of ownership; 6% cash back at U.S. supermarkets tops the list on grocery rewards among cash back cards, and can make a huge impact on anyone’s annual budget, especially for families or frequent home chefs.
There are additional perks to having an American Express card that can set the Blue Cash Preferred apart for you, too. Benefits like early access to event ticket sales and generous return protections and purchase dispute resolution policies, among others, can bring even more value.
Value
First-year rewards value: $552.96
Subsequent annual rewards value: $302.96
Bank of America® Cash Rewards credit card
Earn 3% cash back in the category of your choice (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases). Earn automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases). Earn unlimited 1% on all other purchases.
- Intro bonus: $200
- Annual fee: $0
- Regular APR: 13.99% – 23.99% Variable APR on purchases and balance transfers
- Recommended credit score: 670-850 (Good to Excellent)
The Bank of America Cash Rewards credit card* stands out because of its flexibility, which is why it earns a spot on our list. Rather than standard categories for every cardholder, this card allows you to choose the categories you prefer.
You’ll earn 3% cash back in one category of your choice: either gas, online shopping, dining, travel, drug stores, or home improvement/furnishings, plus 2% cash back at grocery stores or wholesale clubs such as Costco (on up to $2,500 in combined choice category/grocery store/wholesale club purchases each quarter) and 1% back on everything else. For our evaluation, we calculated value based on dining as the 3% category.
Read our full review of the Bank of America Cash Rewards card
This card’s value is unique because of the flexibility you have to choose your own rewards. If your spending habits change throughout the year — maybe you spend more on home improvement during the summer months and online shopping over the holidays — it’s easy to maximize each purchase, but you also have to be willing to put in a bit of extra work to track and evaluate your spending.
You can change your 3% choice category monthly or leave it the same month-to-month. The Bank of America Cash Rewards also charges no annual fee and new cardholders can earn a $200 cash bonus offer after spending $1,000 within 90 days of account opening.
Value
First-year rewards value: $446.40
Subsequent annual rewards value: $246.40
Discover it® Cash Back
Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Earn 1% unlimited cash back on all other purchases – automatically.
- Intro bonus: Cashback Match™
- Recommended credit score: 670-850 (Good to Excellent)
Discover it Cash Back* is our pick for the best rotating category cash back card for a few reasons.
First, it offers great ongoing rewards value. After activating each quarter, you’ll earn 5% on purchases in rotating bonus categories (up to $1,500 spent per quarter) and 1% on everything else.
Here are each of the Discover it Cash Back categories for 2020:
- January – March: Grocery stores, Walgreens, CVS
- April – June: Gas stations, Uber, Lyft, Wholesale Clubs
- July – September: Restaurants and Paypal
- October – December: Best Buy (Nov 25 – Dec 31), Amazon.com, Walmart.com, Target.com
In addition to its rotating rewards, at the end of your first year of membership, Discover also doubles all of your cash back earnings from the entire year. So while you don’t get the quick payout of a traditional cash bonus, you do have the potential to boost your first-year value in a big way.
Another important factor is Discover announces all upcoming categories at the beginning of the year, while Chase typically reveals upcoming quarterly categories a few weeks in advance. We believe this alone adds substantial value to the Discover it Cash Back, because it allows you to better plan your spending strategy to maximize rewards ahead of time, taking the pressure off each quarter.
There are a few drawbacks, though. If you don’t activate your rewards until midway through a quarter, they won’t apply retroactively (Chase Freedom categories will), so you must be proactive. And, while they’re becoming more widely accepted, you may still find merchants unwilling to accept Discover cards, an issue largely avoided by cards on other networks.
Value
First-year rewards value: $465.78
Subsequent annual rewards value: $232.89
Best Cash Back Credit Cards Summary
| Card | What It’s Good For | First-Year Rewards Value | Subsequent Annual Rewards Value |
|---|---|---|---|
| Chase Freedom Unlimited | Good for Overall Value | $450.75 | $250.75 |
| Citi Double Cash Card | Good for Earning Over Time | $265.16 | $265.16 |
| Citizens Bank Cash Back Plus World Mastercard | Good for Simplicity | $238.64 | $238.64 |
| Capital One SavorOne Rewards Credit Card | Good for Dining and Entertainment | $510.92 | $310.92 |
| Blue Cash Preferred Card from American Express | Good for Groceries and Gas | $552.96 | $302.96 |
| Bank of America Cash Rewards Credit Card | Good for Flexibility | $446.40 | $246.40 |
| Discover it Cash Back | Good for Revolving Rewards | $465.78 | $232.89 |
What are Cash Back Credit Cards?
Cash back credit cards can be a good way to maximize your purchases without having to strategize too much or figure out complicated points values. These cards allow cardholders to earn back a percentage of each purchase, usually in a form of cash that may be redeemed for a statement credit, check, or bank deposit.
There are a few different types of cash back cards, so it’s important to align your cash back rewards with the categories in which you spend most.
Types of Cash Back Credit Cards
We can generally divide cash back credit cards into three categories: flat, tiered, and rotating cash back rewards. Each of these may suit different types of spenders. If you’re comfortable juggling multiple cards without taking on debt, you can even combine them to further maximize each purchase.
Flat Cash Back
Flat cash back rewards cards offer a simple value proposition: There are no bonus tiers or categories to track. Instead, you’ll earn a fixed cash back return on every eligible purchase you make with the card. For many people, flat cash back can offer the most value on everyday spending since you’ll earn on every purchase regardless of category.
Tiered Cash Back
Cash back credit cards which offer tiered rewards in standard bonus categories may be the most common cash back card type across issuers. While these cards don’t provide the same simplicity of flat cash back, they can be highly valuable for the average spender. Bonus categories typically range between 2-4% cash back and may or may not cap bonus earn after a certain amount each year. Before applying for a tiered category card, look into your own regular spending and past bank statements to determine the categories that will best maximize your spending.
Rotating Cash Back
Rotating category cards won’t win any points for simplicity — you must keep track of each quarterly category change to make the most out of them — but if your spending aligns with the available categories, they can offer among the highest rewards rates. Categories can vary, but the cash back rate across these types of cards is generally 5%. Issuers typically reveal upcoming categories in advance, and to earn the bonus cash back on your spending, you must activate the rewards in your account each quarter.
Common Cash Back Bonus Categories
With dozens of cash back credit cards to choose from, you can easily tailor your card choice to your own spending, whether you’re a frequent traveler, love to dine out, or always hailing a rideshare service.
Most commonly, bonus categories for cash back cards include some combination of dining, groceries, and travel. But in response to the pandemic and a push for customer retention, more issuers are further highlighting everyday spending. You’ll find many cash back cards today with increased rewards on streaming services, utilities, department or home improvement stores, gas stations, and more.
Additional Cash Back Cards We Recommend
We eliminated membership cards — those which may require additional steps to join or annual membership fees separate from the card itself — from our primary list of best cash back credit cards. But there are a few which we believe are worth considering for their high value on everyday purchases.
These cards can be especially beneficial if you’re already a member, because you’ll take on no extra cost. But they also offer competitive rewards that can increase overall value, and may make it worth any added commitment.
Alliant Cashback Visa Signature Card* offers the highest flat cash back rate of any card on our list, at 2.5% cash back (on up to $10,000 each billing cycle). It does charge a $99 annual fee (waived the first year), so this card is best for bigger spenders. To make up the difference between 2.5% cash back with a $99 annual fee compared to a no-annual-fee card that earns a flat 2% (like Citi Double Cash), you’ll need to spend at least $20,000 total annually.
You can gain Alliant membership if you are a current or retired employee of a business partnered with Alliant, if you live or work in a qualifying community in the Chicago area, if you’re a member of a qualifying organization, or if you become a member of Alliant’s partner charity Foster Care to Success.
Value
Using the same averages we used to calculate other card values on this list, this card’s annual value for a member after accounting for the annual fee is $232.45. If you’re able to meet that $20,000 annual minimum to outweigh the fee compared to other flat rate rewards cards, though, your annual rewards value becomes $401.
The Fidelity Rewards Visa Signature* earns an unlimited 2% back on every purchase you make for no annual fee. However, to open this card you must own an eligible Fidelity account. And while you can redeem your rewards for cash, you’ll only get the full 2% by redeeming via deposit into your eligible Fidelity account, such as a brokerage account, retirement account, 529 Plan, or other investment vehicle.
Value
Using the same averages we used to calculate other card values on this list, Fidelity Rewards Visa’s annual value for a member who deposits rewards into their Fidelity account is $265.16. And over time, adding this amount to your investments annually will pay off even more through compounding interest.
The Amazon Prime Rewards Visa Signature* offers one of the highest ongoing rewards rates that can potentially apply for nearly all of your everyday spending needs. If you’re an Amazon Prime member ($119 annually), you can earn 5% cash back at Amazon.com and Whole Foods Market; 2% cash back at restaurants, gas stations, and drugstores; and 1% on everything else.
While this card can have a great payout for loyal Amazon shoppers, you may find cards with more general categories work best for you if most of your spending is done outside of Amazon or Whole Foods.
Value
Using the same averages we used to calculate other card values on this list (and assuming all annual grocery shopping is completed at Whole Foods or through Amazon), this card’s annual value after the membership price is $215.80, but that can vary greatly depending on how much shopping you complete on Amazon outside of these categories.
The Costco Anywhere Visa Card by Citi* is a valuable choice for any Costco loyalist. You’ll earn 4% cash back on your first $7,000 (then 1%) in eligible gas purchases annually, including at Costco, plus 3% cash back on restaurant and eligible travel purchases worldwide, 2% on all other purchases at Costco and Costco.com, and 1% on everything else.
There’s no annual fee, but you must be a Costco member to apply, which costs $60 annually for the club’s Gold Star base tier. Instead of redeeming cash back as you go, you’ll receive an annual reward certificate each February billing cycle, which you may bring to a Costco store to redeem for cash or use toward a purchase.
Value
Using the same averages we used to calculate other card values on this list (and assuming all annual grocery shopping is completed at Costco), this card’s annual value for a member paying the Gold Star member fee is $249.67.
Is a Cash Back Card Right for You?
If you’re already carrying a debt balance on a credit card, you shouldn’t add another credit card to the mix, no matter how good the rewards might be. Focus on paying down your high-interest debts and securing a healthy credit score before opening a cash back card.
A cash back credit card may be a great fit for you, though, if you stick to your budget, have no high-interest debts, and you’re looking to add value to your purchases. If you already have another type of rewards card, adding a cash back card to your wallet can help you further maximize each purchase, as long as you pay off your balances in full each month before accruing interest.
How to Find the Best Cash Back Card for You
Because cash back cards are rewards cards, they will also generally require a good-to-excellent credit rating for approval. Develop healthy credit habits and build your score to a solid place before seeking out rewards credit cards.
Finding the best cash back card for you starts with evaluating your own spending habits. Review your past several months of spending to best determine which spending categories you should prioritize. After rewards structure, look at other card details such as fees, APR and penalties, and secondary issuer benefits.
Depending on your individual situation, you may weigh card details differently. For example, maybe you prefer the ease of a no-annual-fee card even if that means forfeiting greater rewards on a card with an annual fee. If you plan to use your cash back card for a large one-time purchase such as new appliances or furniture, a long 0% introductory offer can help you pay off that purchase over time without accruing interest. Take your entire financial picture and future plans into consideration when choosing a card that’s best for you.
Pros and Cons of Using a Cash Back Card
Pros
Simplicity: Earn straightforward rewards on every purchase
Flexible redemption options and rewards categories
Many charge no annual fee and offer cash welcome bonuses
Some cash back cards have great balance transfer and 0% interest offers
Cons
Cash back cards may have lower potential redemption value than rewards cards that earn points or miles
Rewards earnings may have annual or quarterly caps
Carrying a balance can result in sky-high interest, with APRs upwards of 20%
Potential costs of fees and penalties
How to Maximize Cash Back Rewards
Maximizing your cash back rewards is simple: use your cash back card each time you spend in a qualifying rewards category or, in the case of flat cash back cards, for every purchase you make.
Even for purchases that don’t earn extra rewards — or after you’ve already surpassed a spending cap — you can often still earn something. Many cash back cards offer a blanket 1% back on all purchases beyond dedicated rewards categories, no matter where you spend.
And don’t forget: accruing interest on your card balances will quickly erase any rewards you earn. Maximize your rewards by using your cash back credit card like a debit card and never charge more to the card than you can afford to pay off by the time your statement is due.
Our Methodology
EDITORIAL INDEPENDENCE
As with all of our credit card reviews, our analysis is not influenced by any partnerships or advertising relationships.
To determine our picks for best cash back credit cards, NextAdvisor’s editorial team developed a framework to evaluate potential cash back earnings based on national average consumer spending data in broadly representative categories — dining, groceries, gas, and entertainment. We applied this framework to each card currently open for applications by every major credit card network and issuer, and divided each into subcategories for more accurate comparison. After potential rewards earnings, we also evaluated each card’s annual fee, first-year vs. ongoing value, bonus offers, and redemption flexibility.
*All information about the Citi® Double Cash Card, Citizens Bank Cash Back Plus™ World Mastercard®, Capital One SavorOne Cash Rewards Credit Card, Capital One Savor Cash Rewards Credit Card, Bank of America® Cash Rewards credit card, Discover it® Cash Back, Alliant Cashback Visa Signature Card, Fidelity Rewards Visa Signature, Amazon Prime Rewards Visa Signature, and Costco Anywhere Visa® Card by Citi has been collected independently by NextAdvisor and has not been reviewed by the issuer.
