Top Cash Back Credit Cards Of 2023
Using a cash back credit card is one of the best ways to save money while shopping. Beyond earning rewards, these cards include all of the benefits of a regular credit card — the ability to spend conveniently, borrow money, and build credit.
Continue reading to learn everything you might need to know about cash back credit cards — including how they work, the different types that are available, how to redeem rewards, and more!
A cash back card is a type of credit card that allows you to earn rewards when you charge it and pay it off.
Typically, these cards earn a percentage of the amount that you spend. Suppose that a card offers 3% cash back, for example. The cardholder would earn three cents back for every dollar spent on qualifying purchases.
Cash back rewards are typically awarded at the end of the billing cycle and can be redeemed in the form of statement credits, gift cards, or in some cases, actual cash.
Cash back credit cards earn rewards in different ways. Consider a card’s rewards structure before committing to one:
Flat-rate: This is the most common and most straightforward type of cash back card. A flat-rate card allows you to earn a fixed percentage back on all purchases.
Tiered: A tiered cash back credit card allows you to earn higher percentages in certain categories. A card might offer 1% on most purchases but up to 5% on gas, for example.
Rotating: Like a tiered card, a cash back card with rotating categories allows you to earn a fixed rate on most purchases and a higher percentage on certain categories. The difference is that these categories rotate periodically—typically each quarter.
Top Cash Back Credit Cards
Upgrade is an American fintech company that offers credit cards. Its Triple Cash Rewards card allows users to earn a flat rate on all purchases and triple earnings on home, auto, and health categories. The Triple Cash Rewards card has no annual fee, activation fee, prepayment penalty, late fees, or foreign transaction fees. Rewards are unlimited, meaning there is no cap on how much money you can earn each billing cycle. You also have the option of transferring cash rewards directly to your bank account. When users carry a balance, Upgrade treats it like a loan with a fixed interest rate and equal monthly payments.
Annual Fee: $0
Credit Line: $500 – $25,000
Rewards Rate: 3% on home, auto, and health; 1% on all other categories
Recommended Credit Score: 580+
Upgrade is an American fintech company that offers credit cards and more. The Cash Rewards card comes with no annual fee, activation fee, prepayment penalty, late fees, or foreign transaction fees. Rewards are unlimited and can be transferred directly to your bank account.The company’s Cash Rewards card allows users to earn a flat rate on purchases across all categories when they pay their balance. When users carry a balance, Upgrade treats it like a loan with equal payments and a fixed interest rate.
Annual Fee: $0
Credit Line: $500 – $25,000
Rewards Rate: 1.5% on all categories
Recommended Credit Score: 580+
Common Cash Back Categories
There are dozens of potential rewards categories. Some cards will even name specific retailers, such as Amazon or Costco. Some of the most common categories include the following:
- Groceries
- Gas
- Dining
- Entertainment
- Wholesale clubs
- Streaming services
- Convenience stores
How to Get a Cash Back Credit Card
Getting a cash back credit card is relatively simple process. In order to identify the best card for you, however, you should take some time to shop around and compare your options.
When comparing cards, carefully weigh the following factors:
Annual fee: Some cards have annual fees, and if you’re not careful, these costs can exceed your cash back earnings.
Sign-up bonus: Some cards allow you to enjoy significant cash back earnings upfront with a sign-up bonus. Of course, you will need to be able to meet the card’s spending requirement to take full advantage of the bonus.
Rewards categories: To maximize your earnings, look for cards that reward the categories where you spend the most money. If there is no method to how or where you use your credit card, a flat-rate rewards structure might be best.
0% intro APR: If you happen to carry a balance from month to month, a 0% introductory APR will allow you to avoid interest fees across that period.
Ongoing interest rate: Even if a card come with a 0% intro APR, a higher interest rate will typically kick in once the introductory period ends. The lower the card’s ongoing interest rate, the better.
Rules: It’s important that you comb through the fine print of any credit card agreement. Some cash back credit cards have terms or limits that could prevent you from earning what you might expect.
While requirements may vary from one credit card to the next, some common requirements include the following:
- Be at least 18 years old.
- Be a U.S. citizen or resident.
- Have a valid identity and social security number.
- Provide valid U.S. mailing address.
- Earn enough income to make payments.
- Meet the card’s minimum credit score threshold.
Once you have narrowed down your options, the process of applying for a cash back credit card is easy. Follow these four simple steps:
Get pre-approved: The easiest way to determine whether you might be eligible for your cash back credit card of choice is to get a pre-approval. Most issuers will allow you to do this online in minutes without affecting your credit.
Submit an application: There are a few ways to apply for a credit card. You may visit a branch in person, mail a physical application, or fill out a digital application on the company’s website. Make sure you have all necessary documentation on hand.
Wait for a decision: Depending on the issuer and how you submitted your application, you may receive a decision in as soon as 60 seconds or as long as a few weeks.
Receive your card in the mail: Once you are approved, have your card in hand, and have activated your account via your issuer’s app, website, or online portal, you can start spending and earning rewards!
Pros and Cons of Cash Back Credit Cards
Cash back credit cards have their advantages and disadvantages alike. Be sure to weight all of the pros and cons of a cash back credit card before applying for one.
Pros and cons
- You can earn rewards for everyday purchases you would be making anyway.
- Many cash back cards have sign-up bonuses that allow you to earn significant rewards upfront.
- Many cash back cards have 0% APR intro offers.
- Many cash back cards that have low fees and no annual fees.
- Using cash back cards responsibly allows you to build credit.
- After a 0% APR period ends, you may be left with a high interest rate.
- If you carry a monthly balance, interest fees may be higher than the rewards you earn.
- Many cards have caps on how many rewards you can earn and redeem.
- Many cards have foreign transaction fees.
- Falling behind on credit card payments will hurt your credit.
How to Make the Most of Your Cash Back Credit Card
There are a few things you can do to maximize the advantages of your cash back credit card. First, if your card comes with a sign-up bonus, be sure to meet the minimum spending amount. This is often your best opportunity to save money with a cash back card.
Next, use your card often so that you earn as much cash back as possible — assuming, of course, that you are able to pay your balance each month. If the card has an annual fee, maximizing your rewards will allow you to cover it.
Finally, it may also be worth getting multiple cash back credit cards, as certain cards will have higher rewards in specific categories. This will allow you to maximize rewards across your entire shopping experience.
Frequently Asked Questions:
Because cash back credit cards typically have higher rewards in specific categories, the credit card that will earn the most cash back for you is largely dependent on your spending habits.
If you tend to use credit cards to buy groceries, for example, consider a cash back card that will offer you the highest rewards for that category.
Cash back rewards vary from card to card. Some companies allow you to earn actual cash as a check or direct deposit. Others allow you to earn statement credits or gift cards to popular stores.
Most cash back credit cards allow you to redeem rewards via the company’s app or website in the form of statement credits, direct deposits, checks, or gift cards. Companies will typically allow you to do this at any time, assuming you have earned enough cash back rewards.
Some cash back rewards expire, while others do not. To find out if or when your cash back rewards expire, comb through the card’s terms and conditions.
In most cases, a cash back reward is not considered taxable income. Rather, the Internal Revenue Service (IRS) sees it as a rebate on a purchase. However, there are circumstances when certain rewards — such as sign-up bonuses — may be considered taxable.
Whether you should a cash back card or a travel card depends on the types of rewards you would prefer to redeem.
If you like the spending flexibility of cash and gift cards, a cash back card might be the right choice for you. If you are an avid traveler and value travel-related rewards, it might be worth getting a travel card instead. Keep in mind, however, that many travel cards come with annual fees.