The Best Cash Back Credit Cards of September 2020

The Best Cash Back Credit Cards of September 2020

Cashback cards offer easy rewards on all your purchases without you having to worry about complicated redemption schemes. We offer our top picks below.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

Citi is an advertising partner.

Cashback credit cards let consumers earn a percentage of rewards for each dollar they spend, and they often come with other perks and consumer protections. Since the rewards are valuable and typically easy to redeem, cashback cards are one of the most popular types of credit cards.

Which cashback credit card is best for your needs? That typically depends on the categories you spend the most in, which cardholder perks you prefer and whether you’re willing to pay an annual fee. Based on our research of cards available on ValuePenguin as well as top cards from major issuers, we highlight the top cashback credit cards of 2020 below.

Best cashback credit cards of 2020

Recommended cardsBest forCredit needed
Capital One® Spark® Cash for Business
Capital One® Spark® Cash for BusinessBusinessesExcellent/GoodRead Review
Bank of America® Cash Rewards credit card
Bank of America® Cash Rewards credit cardGasExcellent
Discover it® Secured
Discover it® SecuredApplicants with bad creditLimited/Bad/Poor
Chase Freedom Unlimited®
Chase Freedom Unlimited®1.5% cash backExcellent/Good
Citi® Double Cash Card
Citi® Double Cash Card – 18 month BT offerFlat-rate cardExcellent
Apply Now
  • On Citibank's Secure Website
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Blue Cash Preferred® Card from American Express
Blue Cash Preferred® Card from American ExpressGroceriesExcellent/Good
Apply Now
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Wells Fargo Propel American Express® card
Wells Fargo Propel American Express® cardTravelExcellent/Good
Discover it® Cash Back
Discover it® Cash BackRotating categoriesExcellent/Good
Capital One® Savor® Cash Rewards Credit Card
Capital One® Savor® Cash Rewards Credit CardRestaurantsExcellent/Good
Chase Freedom®
Chase Freedom®0% APRExcellent/Good
Discover it® Student Cash Back
Discover it® Student Cash BackStudentsFair/Limited
Petal® Visa® Credit Card
Petal® Visa® Credit CardFair creditFair/Limited

Recommended Cards

Capital One® Spark® Cash for Business
Bank of America® Cash Rewards credit card
Discover it® Secured
Chase Freedom Unlimited®
Citi® Double Cash Card – 18 month BT offer
Apply Now
  • On Citibank's Secure Website
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Blue Cash Preferred® Card from American Express
Apply Now
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Wells Fargo Propel American Express® card
Discover it® Cash Back
Capital One® Savor® Cash Rewards Credit Card
Chase Freedom®
Discover it® Student Cash Back
Petal® Visa® Credit Card

Compare cashback cards | How do cashback cards work? | How to choose a cashback card | How to maximize a cashback card | FAQs

Best cashback business credit card

Capital One® Spark® Cash for Business

Capital One® Spark® Cash for Business
This product is not available through ValuePenguin.
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Earn a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening.

Our thoughts

There’s a lot to love about the Capital One® Spark® Cash for Business, and this includes the $500 in bonus cash you can earn. Beyond the initial rewards, we also love that this card lets you rack up an unlimited 2% Cash Back for your business on every purchase, everywhere for each dollar you spend. Not only is this a generous rewards rate, but you don't have to worry about bonus categories or earning caps.

You also get employee cards at no cost, so you can earn cash back each time one of your employees makes a business-related purchase. In terms of redemption options, you get the flexibility of being able to cash in your points at any time and in any amount.

Benefits

  • Additional cardholder benefits include roadside assistance, no foreign transaction fees, purchase protection against damage or theft and extended warranties.
  • Earn a flat 2% Cash Back for your business on every purchase, everywhere with no spending limit, plus a generous $500 in bonus cash.
  • Redeem your rewards at any time and in any increments you want.

Drawbacks

  • This card is light on cardholder perks.
  • An annual fee of $0 intro for first year; $95 after that.
  • The ongoing APR is high, making this card a poor choice if you plan to carry a balance.


Best cashback gas credit card

Bank of America® Cash Rewards credit card

Bank of America® Cash Rewards credit card
This product is not available through ValuePenguin.
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$200 after making at least $1,000 in purchases in the first 90 days of your account opening

Our thoughts

The Bank of America® Cash Rewards credit card is unique in that you can earn 3% back in a category of your choosing, including gas, online shopping, dining, travel, drug stores or home improvement and furnishings. You’ll also earn 2% back at grocery stores and wholesale clubs, as well as 1% back on all other purchases.

We like that this card doesn’t come with an annual fee. Also note that you can redeem your cash back in any amount in the form of statement credits or deposits into a Bank of America account or a Merrill account.

Benefits

  • Earn 3% back in a category you can choose, including gas, travel and more.
  • You can change your 3% category each month online or through the mobile app.
  • Introductory APR of 0% for first 15 months on purchases and balance transfers followed by an APR of 16.24% - 26.24% Variable; balance transfers must be initiated within 60 days of account opening to qualify for the introductory rate.
  • No Annual Fee.
  • Bank of America Preferred Rewards members can earn an additional 25% to 75% in rewards with their card.

Drawbacks

  • Rewards in 3% and 2% categories are limited to the first $2,500 in combined spending in those categories each quarter.
  • This card doesn’t come with many meaningful cardholder benefits.


Best cashback credit card for poor, bad or limited credit

Discover it® Secured

Discover it® Secured
This product is not available through ValuePenguin.
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For new cardmembers, Discover automatically matches all the cash back you've earned at the end of your first year.

Our thoughts

The Discover it® Secured is the rare card available to consumers with poor/limited credit that offers both a good cash rewards program and $0 annual fee. You’ll earn 2% back on up to $1,000 spent at gas stations and restaurants each quarter (then 1%), as well as 1% back on all other purchases. Discover will even double all the rewards you earn after the first year for new cardmembers.

The Discover it® Secured is a secured credit card, meaning you have to put down a cash deposit to secure your line of credit. Generally speaking, the line of credit you secure will be the same as your deposit, so putting down $500 up front when you apply for the card would qualify you for a $500 line of credit.

While securing your line of credit with cash may not seem ideal, a secured card is considerably easier to qualify for and use to build better credit over time. And, once your credit line is secured, you don't have to worry about paying an annual fee to maintain your account.

Benefits

  • Easy approvals, even if you have bad/poor/limited credit.
  • Earn rewards with $0 annual fee.
  • Free FICO® credit score on your monthly statement.

Drawbacks

  • You’ll have to secure your line of credit with a cash deposit.
  • Bonus rewards in the 2% category are limited to $1,000 in spending each quarter.
  • No traditional credit card sign-up bonus.


Best 1.5% cashback credit card

Chase Freedom Unlimited®

Chase Freedom Unlimited®

  • On Chase's Secure Website

$0

14.99% - 23.74% Variable

Excellent/Good

  • Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
  • Earn unlimited 1.5% cash back on all other purchases.
  • Earn 5% on travel purchased through Chase, 3% on dining at restaurants and drugstores, and 1.5% on all other purchases.
  • No annual fee
  • 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 - 23.74%.
  • No minimum to redeem for cash back. Cash Back rewards do not expire as long as your account is open
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Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening. And earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.

Our thoughts

When it comes to cashback credit cards that offer 1.5% back, it’s hard to beat the Chase Freedom Unlimited®. Not only can you earn a generous sign-up bonus, but you Earn 5% cash back on travel purchased through Chase, 3% on dining and drugstores, and 1.5% on all other purchases. You won’t even have to pay an annual fee to have this card, and you can save money on interest since you get a 0% Intro APR for 15 months for new purchases (14.99 - 23.74% Variable thereafter).

Because this card lets you earn points in the Chase Ultimate Rewards® program, you can redeem your points for statement credits, gift cards, merchandise, travel and more.

Benefits

  • Save money with a 0% Intro APR for 15 months on new purchases (14.99 - 23.74% Variable thereafter).
  • Earn a flat rate of 1.5% cash back on most purchases, along with bonus rewards for certain purchases, with a $0 annual fee.
  • Major cardholder benefits include purchase protection against damage or theft and extended warranties.

Drawbacks

  • No bonus categories to let you earn more rewards.
  • Charges a foreign transaction fee of 3% of each transaction in U.S. dollars when you make purchases overseas.
  • Some flat-rate cashback credit cards (see the Citi® Double Cash Card – 18 month BT offer below) offer a higher rewards rate.


Best flat-rate cashback card

Citi® Double Cash Card – 18 month BT offer

  • On Citibank's Secure Website

$0

13.99% – 23.99% (Variable)

Excellent

  • Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
  • To earn cash back, pay at least the minimum due on time.
  • Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 13.99% – 23.99%, based on your creditworthiness.
  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 13.99% – 23.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
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Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

Our thoughts

The Citi® Double Cash Card – 18 month BT offer is one of the highest earning flat-rate of cashback cards. You’ll Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. Though it doesn't offer any kind of sign-up bonus, the card's 2% cashback rate makes up for the lack of a bonus over time.

The card doesn’t have any meaningful cardholder benefits, but you won’t pay an annual fee. With that being said, you can save money with its balance transfer offer. Once you sign up, you’ll get an intro APR of 0% for 18 months on Balance Transfers, followed by an APR of 13.99% – 23.99% (Variable).

Benefits

  • One of the highest rewards rates among flat-rate cashback credit cards.
  • $0 annual fee.
  • Intro 0% balance transfer offer can help you save money.

Drawbacks

  • This card has few meaningful cardholder benefits.
  • It doesn't offer a sign-up bonus.
  • You can only redeem rewards for statement credits, direct deposit or a check.
  • You don’t earn the second 1% back until you pay for your purchases.
  • High ongoing APR for purchases depletes rewards value if you carry a balance.
  • Charges a foreign transaction fee of 3%.


The best grocery cashback credit card

Blue Cash Preferred® Card from American Express

$95

13.99%-23.99% Variable

Excellent/Good

  • Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 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 at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more). 1% Cash Back on other purchases.
  • Low intro APR: 0% for 12 months on purchases from the date of account opening, then a variable rate, currently 13.99% to 23.99%.
  • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • $95 Annual Fee.
  • Terms Apply.
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Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.

Our thoughts

The Blue Cash Preferred® Card from American Express is easily the best cashback credit card for groceries purchases at U.S. supermarkets, since you earn 6% back on up to $6,000 spent each year (then 1%) in this category. If you max out your rewards by spending $500 per month on groceries each year, you could earn $360 per year in cash back in this category alone.

Also note that you’ll earn 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 and 1% Cash Back on other purchases.

If your goal is saving money on interest for a limited time, the card offers an intro APR of 0% on purchases for 12 months followed by an APR of 13.99%-23.99% Variable.

Benefits

  • 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 and 1% Cash Back on other purchases.
  • Generous welcome bonus.

Drawbacks

  • A $95 annual fee applies.
  • 6% category is only for U.S. grocery stores, and a $6,000 annual limit applies, then you earn 1%.
  • You can only redeem your rewards for statement credits.
  • Charges a foreign transaction fee of 2.7% of each transaction after conversion to US dollars.

For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.



Best cashback travel credit card

Wells Fargo Propel American Express® card

Wells Fargo Propel American Express® card
This product is not available through ValuePenguin.
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Earn 20,000 bonus points when you spend $1,000 in purchases in the first 3 months

Our thoughts

The Wells Fargo Propel American Express® card doesn’t charge an annual fee and lets you Earn 3X points on eating out, ordering in and popular streaming services, 3X points on gas stations, rideshares and transit, and 3X points on travel including flights, hotels, homestays and car rentals. Earn 1X points on other purchases.

On the redemption side of the equation, you can cash in your points for statement credits at a value of 1 cent per point. Plus, you have many other redemption options including travel, gift cards and more. Your rewards will also never expire as long as your account is open, and you can earn an unlimited number of points over time.

Another notable benefit for frequent travelers: The card doesn't charge a foreign transaction fee, which means you can use it for traveling abroad without compiling fees.

Benefits

  • Earn 3X points on popular categories with $0 annual fee.
  • Flexible redemption options, including the ability to redeem rewards for travel through the Go Far Rewards® program.
  • Generous initial bonus offer.
  • Numerous other benefits, including cellphone protection, extended warranties, secondary auto rental coverage, lost luggage reimbursement, roadside assistance and more.
  • No foreign transaction fees.

Drawbacks

  • High ongoing APR of 14.49% - 24.99% Variable after the introductory period ends.
  • Points can be redeemed for travel, but you cannot transfer them to airline or hotel partners.


Best rotating category credit card

Discover it® Cash Back

Discover it® Cash Back
This product is not available through ValuePenguin.
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Discover automatically matches all the cash back you've earned at the end of your first year for new card members.

Our thoughts

The Discover it® Cash Back is popular among consumers who want to earn bonus rewards in categories that change over time. This card lets you earn 5% back on up to $1,500 in quarterly bonus categories (then 1%) as well as 1% back on all other purchases. For the remainder of 2020, Discover bonus categories are as follows:

January-MarchApril-JuneJuly-SeptemberOctober-December
Grocery stores, Walgreens, CVSHome Depot, gas stations, Uber, Lyft, wholesale clubsRestaurants, PaypalAmazon.com, Target.com, Walmart.com

While this card doesn’t come with a traditional bonus, Discover will double all the rewards you earn the first year through their Cashback Match program. This makes the card one of the most rewarding cashback credit cards for its first year.

Benefits

  • Earn 5% back in popular rotating categories on up to $1,500 in purchases per quarter (then 1%).
  • Discover will match the cash back that you earn at the end of your first year for new card members.
  • $0 annual fee.
  • Get a 0% intro APR for the first 14 months on new purchases followed by an APR of 13.49% - 24.49% Variable.

Drawbacks

  • You only earn 5% back on up to $1,500 in quarterly bonus categories, which limits your rewards potential. Purchases outside its bonus categories only earn 1% cash back.
  • You have to remember to enroll in the categories each quarter to earn 5% cash back.
  • No traditional sign-up bonus.


Best restaurant cashback card

Capital One® Savor® Cash Rewards Credit Card

Capital One® Savor® Cash Rewards Credit Card
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Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening.

Our thoughts

If you spend a lot of money on dining each month, the Capital One® Savor® Cash Rewards Credit Card is hard to beat. This card doles out 4% Cash Back on dining; 4% Cash Back on entertainment; 2% Cash Back at grocery stores; 1% Cash Back on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through Jan 2022. The rewards you can earn with this card are unlimited, too.

You'll have to pay an annual fee of $0 intro for first year; $95 after that, yet you won’t pay foreign transaction fees when you use this card to make purchases overseas. You also get the benefit of being able to redeem your rewards for cash back in any amount or for purchases on Amazon.com.

Benefits

  • Earn unlimited rewards, including 4% back on dining and entertainment.
  • Generous bonus offer.
  • Qualify for extended warranties, travel accident insurance, complimentary concierge service and more.
  • No foreign transaction fees.

Drawbacks

  • Only earn 1% back on non-bonus spending.
  • You'll have to pay an annual fee of $0 intro for first year; $95 after that.


Best cashback 0% intro APR credit card

Chase Freedom®

Chase Freedom®
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$200 Bonus after spending $500 on purchases in your first 3 months from account opening

Our thoughts

The Chase Freedom® is another card in this niche that lets you earn 5% back in categories that rotate each quarter. You’ll Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.

This card also gives you a long introductory APR of 0% on purchases for 15 months, followed by an APR of 14.99% to 23.74% Variable. This could save a significant amount of interest if you want to make a large purchase and pay it down over time.

Benefits

  • Earn 5% cash back on popular rotating categories each quarter (then 1%).
  • Get a 0% Intro APR on Purchases for 15 months (followed by an APR of 14.99% to 23.74% Variable).
  • Earn rewards with $0 annual fee.
  • Qualify for purchase protection against damage or theft, extended warranties, zero liability protection and more.

Drawbacks

  • Rotating bonus categories are capped at $1,500 in purchases per quarter.
  • You have to remember to enroll in the categories each quarter to earn 5% cash back.
  • Intro 0% APR offer doesn’t apply to balance transfers.
  • Charges a foreign transaction fee of 3% of each transaction in U.S. dollars.


Best student cashback credit card

Discover it® Student Cash Back

Discover it® Student Cash Back
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Discover automatically matches all the cash back you've earned at the end of your first year for new card members.

Our thoughts

The Discover it® Student Cash Back is geared to students with limited credit histories, and offers the same great cashback rewards program as the regular version of the card. You can earn 5% back in quarterly bonus categories on up to $1,500 in purchases each quarter (then 1%) and 1% back on all other purchases. Plus, just like the non-student version of the card, Discover will match your cash back at the end of the year if you are a new card member, essentially doubling your rewards.

As a student, this card lets you qualify for a $20 Good Grade Reward each year your GPA is 3.0 or higher (for up to five years). The card is also free of annual fees, and you’ll get a free FICO score on your monthly statement.

Benefits

  • Earn 5% cashback on quarterly rotating categories, up to $1,500 in purchases per quarter (then 1%).
  • Discover will double all the rewards you earn the first year for new card members.
  • Qualify for a $20 statement credit if your GPA is 3.0 or higher.
  • May be easier to qualify for than other unsecured credit cards.
  • $0 annual fee.

Drawbacks

  • This card’s 5% back category bonus is limited to $1,500 in spending each quarter (you only earn 1% cash back after that).
  • You have to remember to enroll in the categories each quarter to earn 5% cash back.
  • No traditional sign-up bonus. You get a cashback match offer instead.


Best cashback credit card for fair credit

Petal® Visa® Credit Card

  • On WebBank's Secure Website

No Annual Fee

12.99% - 29.49% Variable

Fair

  • No fees whatsoever. No late fee, international fee, annual fee, or any-other-kind-of-fee, fee
  • Up to 1.5% cash back after making 12 on-time monthly payments
  • Variable APRs 12.99% - 29.49%
  • 1% cash back on eligible purchases right away
  • Up to 10% cash back from select merchants
  • Build credit alongside tens of thousands of Petal Card members
  • Cash flow technology may help applicants without credit history get approved
  • $500 - $10,000 credit limits
  • Petal's mobile app makes it easy to manage your money, track your spending, and automate payments
  • See if you're pre-approved within minutes without impacting your credit score
  • Petal reports to all 3 major credit bureaus
  • No deposits required
  • Card issued by WebBank, Member FDIC
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Our thoughts

The Petal® Visa® Credit Card is geared to consumers with fair credit, yet it is free of burdensome fees many credit cards in this category charge. You’ll also earn flat-rate rewards with this card that increase as you make on-time payments. You’ll start out earning 1% back and then graduate to 1.2% back after six on-time payments and 1.5% back after 12 on-time payments.

We love the fact you won’t pay an annual fee on this card, and you can also utilize the card’s mobile app to monitor your spending and payments.

Benefits

  • Up to 1.5% cash back after making 12 on-time monthly payments, 1% cash back on eligible purchases - right away .
  • $0 annual fee, no late fees and no hidden fees.
  • Qualify for a line of credit between $500 and $10,000.
  • Qualify with fair credit, limited credit and no credit history.

Drawbacks

  • You need an invitation to apply.
  • No traditional sign-up bonus.

The information related to Bank of America® Cash Rewards credit card, Wells Fargo Propel American Express® card, and Chase Freedom® has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.

Compare cashback credit cards

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What is a cashback card?

A cashback card is a type of credit card that lets you earn cash rewards for each dollar you spend. Many cashback cards also come with benefits like zero fraud liability, purchase protection and extended warranties.

How do cashback credit cards work?

Cashback cards let you earn rewards as a percentage of your spending, so you’ll rack up more cash back the more you use your card. Most cashback cards then let you redeem your rewards for statement credits, gift cards and more. There are three general types of cashback cards:

Flat-rate cashback cards

Flat-rate cashback cards let you earn a specific percentage of rewards regardless of the category of your purchases. If you have a flat-rate rewards credit card that lets you earn 2% back on all purchases you make, for example, you’ll earn $2 in rewards for each $100 you spend.

Tiered cashback cards

Tiered cashback cards let you earn more rewards in some categories than others. They might offer 3% back in specific categories like dining or travel, then 2% back in another category like grocery stores, for example. Typically speaking, tiered cards also offer 1% back on all non-bonus purchases made with your card.

Rotating category cashback cards

Some cards come with rotating categories that change each quarter. Cards in this realm typically let you earn a specific amount of rewards in a specific category for three months, usually up to specific limits. The Chase Freedom® is a good example since you Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. Like other cards with rotating rewards categories, the Chase Freedom® also lets you earn 1% back on all other purchases.

How to choose a cashback credit card

The right rewards credit card for you depends on your spending style and the type of rewards you want to earn. Here are some factors to consider:

Earning categories

Make sure the card you choose offers generous rewards in the categories you spend the most in. If you spend a lot on groceries or gas, for example, you could look for a card that offers bonus categories on these purchases.

Conversely, it can make sense to sign up for a flat-rate rewards card that offers a higher earning rate on everything you buy. This strategy would help you avoid having to worry about bonus categories or earning caps.

Sign-up bonus

Look for a rewards credit card that offers a generous initial bonus and that preferably comes with a minimum spending requirement you can easily reach. If you can earn a welcome bonus when you spend $3,000 on purchases within three months, for example, make sure you can spend $1,000 per month on your card via regular spending and bills.

Annual fee

Most cashback cards don’t charge an annual fee, yet those that do typically offer a higher rate of rewards. If you decide to pay an annual fee for a credit card, make sure the rewards or cardholder benefits are worth it to you.

Redemption options

Make sure the card you select lets you redeem rewards in the way you want, whether that means for statement credits, gift cards, cash in the mail or several different options.

0% introductory APR

Some cashback cards let you save money with a 0% APR on new purchases and balance transfers for a limited time. If you would like a card with this benefit, make sure to check how long you get 0% APR and whether your offer applies to purchases, balance transfers or both.

Other benefits

Also look for cards that offer the perks you want the most, whether that includes extended warranties, purchase protection, travel insurance or other benefits.

How to make the most of a cashback credit card

To make the most of a cashback credit card, you should use it for all your regular spending and bills. Also pay special attention to bonus categories that can help you rack up more rewards over time. Also, you should always pay your balance in full and never, ever carry long-term debt with a rewards credit card. Cashback credit cards tend to charge high APRs that start at around 11.99%. Using a card to earn 1% to 3% cash back will not compensate for the amount you have to pay in interest.

FAQs about cashback credit cards

What is the best cashback credit card?

The best cashback credit card is different for everyone. We suggest comparing card options based on their rewards rates and how they align with your normal spending, as well as rewards redemption options, annual fees and the cardholder benefits you can qualify for.

What credit card gives the most cash back?

The credit card that offers the most cash back also varies from person to person since some cards offer more rewards in specific categories. Some cards offer a higher rate of rewards on all purchases than others. The Citi® Double Cash Card – 18 month BT offer is a popular option, since it lets you Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

Is credit card cash back taxable?

Credit card rewards are considered a rebate on your spending, and thus they are not considered taxable income.

Why do credit card companies offer cash back?

Credit card companies offer cash back as an incentive for you to sign up for their cards and use them for regular purchases. They make money off of transaction fees and interest when you carry a balance, so the rewards they pay out is worth it to them.

Are cashback rewards worth it?

Cashback credit cards can be worth the trouble if you always pay your balance in full and you never pay a dime in interest. If you are worried about racking up long-term debt, you may want to stay away from credit cards altogether.

Is cash back on a business credit card taxable?

Cash back earned with a business credit card is considered a rebate on your purchases. For that reason, it is not considered taxable income.

How do you calculate the cashback rate on credit cards?

Cash rewards rates are typically doled out as a percentage of your spending. With that in mind, a card that offers 1% back on all purchases would give you $1 for each $100 you spend. Likewise, a card that offers 2% back would give you $2 for each $100 you spend.

What is a 1.5% cashback card?

Cards in this category let you earn 1.5% back for each dollar you spend, or $1.50 for each $100 in purchases you charge to your credit card.

Are cashback or miles cards better?

Some rewards credit cards offer airline miles instead of cash rewards. Neither card is “better,” but it’s likely one option might work better for your needs. Airline credit cards typically work best for consumers who travel often and stick with the same airline or airline alliance.

Do cashback cards build credit?

Cashback cards can help you build credit since all your credit movements are reported to the three credit bureaus — Experian, Equifax and TransUnion. To build credit with a credit card, make sure to pay your balance early or on time each month, keep debt levels at a minimum and avoid opening or closing too many credit accounts.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).