Cash-back credit cards can be worthwhile tools to have in your financial workshop. They offer cardholders the chance to earn rewards on everyday purchases and, in some cases, even offer bonus cash back in specific categories.

The key with these cards, as with any credit card, is to ensure that you’re using them smartly and that you’ve selected a card that aligns with your spending habits, financial goals and credit history.


Before jumping into a credit card application, take some time to understand the three types of cash-back credit cards.

  • Flat-rate

    - Receive a static percentage cash-back on your purchases regardless of amount or spending category.
  • Tiered

    - Your amount of cash back varies depending on the spending category, but those categories are constant. For instance, the Bank Americard Cash Rewards Credit Card offers 3 percent cash back on gas, 2 percent back on grocery and wholesale club purchases and 1 percent back on all other purchases. Bonus categories often have an annual or quarterly cap on the spending that will qualify.
  • Rotating categories

    - These cards offer a flat-rate across all categories, but also offer bonus cash back on purchases made in particular categories that change each quarter. Cardholders generally must sign up quarterly in order to receive the bonus cash back, which is usually capped at a certain level of spending.


The average American credit card holder has four credit cards in his/her wallet, and there are literally hundreds of options out there. If you’re looking to add a cash-back credit card to your portfolio, we can help. We can even give you some ways in which to use more than one cash-back credit card to maximize your rewards.

We reviewed several of our favorite cash-back credit cards, taking a look at their reward structures, credit score needed, best features, potential drawbacks and more. Still have questions? Reach us at editors@cardratings.com.

Chase Freedom®:

Chase Freedom®

Our editor's take: This is a truly excellent card for savvy spenders who want to get the most out of 5 percent cash back in multiple categories. The categories rotate quarterly, but being a little bit strategic with your spending can mean big bucks. It’s a frequent favorite among cash-back card lovers.

Deep dive: Bonus categories have included purchases at restaurants, gas stations and select department stores, all with 5 percent total cash back as long as you stay within a quarterly spending cap of up to $1,500 in combined purchases. Beyond that, you’ll earn 1 percent cash back on every purchase with no limit. Earn a $150 bonus after you spend $500 on purchases in your first three months after account opening. This offer carries no annual fee and rewards never expire as long as your account is open.

BankAmericard Cash Rewards™ Credit Card:

BankAmericard Cash Rewards™ Credit Card

Our editor's take: We love the cash-rich features on this card, especially for anyone who finds themselves always in the grocery store or at the gas pump. Here goes: 3 percent cash back on gas and 2 percent at grocery stores for the first $2,500 in combined grocery store and gas purchases each quarter, and 1 percent cash back on every other purchase; plus no annual fee.

Deep dive:  Bank of America tagged its iconic BankAmericard brand to one of its most generous cash back credit cards. It also extends a 10 percent customer bonus for customers who redeem cash back into an eligible Bank of America checking or savings account. It's a great way to cash out your rewards balance when you only plan to use a card for infrequent, large purchases.


Jumping into the cash-back credit card world requires that you ask a few questions before you begin applying for a card.

  1. What are your goals?

    Be honest. Visualize how and when you’ll use the card and whether you want to keep track of rotating categories or if you’ll bet best served by a “one-size-fits-all-purchases” situation.
  2. What is your credit history and credit rating?

    Without a solid understanding of your credit status, you could miss out on valuable intro offers by applying for a credit card with sub-par terms despite your excellent credit. Worse yet, you could even damage your credit by applying for a credit card for which you are not qualified. Know where you stand so you can match your application to your credit history.
    Need help understanding what affects your credit history?
  3. Can you offset an annual fee?

    This is really a question of how often you expect to use the card. You’ll want to use the card frequently enough to earn rewards enough to offset the annual fee, whatever it may be. There’s some wiggle room here if you will use other perks offered by the card, but usually you’ll only want to pay an annual fee if you can recoup that cost in rewards or features.
  4. What does the fine print say?

    It's no fun to sign up for big cash rewards only to be hit by fees on the back end and wipe out any potential gains. Be certain to look beyond intro offers and teaser rates.


You've followed our advice and narrowed the field down to your perfect card. Congratulations! Here's more expert advice to keep in mind as you use your card and rack up cash back.

Change is Constant.

When your circumstances change - and they likely will – your card needs will likely change . Periodically review your spending situation and make sure your cards are working for you. Don’t be afraid to break up with your card if things aren't working out.

Actually Use it.

It sounds simple, but different cards maximize different things. Be aware before you swipe and always use the best card for the situation; don't just grab Old Trusty because it's handy.

Cash rewards or miles cards?

When it comes to card rewards, is it better to focus on cash or miles?

A lot of that depends on your lifestyle and goals but in order to make an apples-to-apples decision, the trick is to come up with the dollar equivalent of a mile or point then think about your use cases.

Say someone flies on United twice a month. The earning potential of getting a United Airlines branded credit card, or another points card, might allow the miles to accrue so fast that realizing rewards is a snap.

Contrast that with someone else who doesn’t fly or stay in hotels often. In this case, a cash-back program is the better and quicker path to getting the cash to spend on a flight or hotel stay – and allow you to spend that cash back on other things as well.

This really goes back to what we discussed earlier in the “Questions to ask” section. Know your goals and your spending habits before making a credit card decision.

Cash-back credit card bottom line

You are the best person to accurately assess which credit card will fit seamlessly into your lifestyle. Don’t be wooed by introductory offers from cards you know won’t ultimately be the best fit. Don’t fall into the “I’ll change my spending habits to make this card work because that intro offer is just too good to pass up” trap. Chances are, you’ll just end up carrying around the wrong credit card and not reaping maximum rewards.

Instead, do your research and take the time to know what you need. When it comes to credit cards, “To thine own self be true.”