Ultimate Guide to Rewarding Cashback Credit Cards
Discover the essentials of cashback credit cards, including types, benefits, and key factors for selecting the best options. Learn how these cards provide cash rewards, the categories they cover, and tips for maximizing returns without annual fees. Perfect for smart consumers aiming to optimize their spending and rewards quickly and efficiently.
Imagine earning back a portion of your expenses directly into your bank account—sounds fantastic, right? The popularity of cashback credit cards is soaring because they reward your spending with cash, unlike points-based rewards. These cards are straightforward to use, with no complex rules about redeeming points. The top cashback credit cards allow you to access your cash anytime, anywhere, making them a convenient choice for savvy shoppers.
Every cashback card calculates your monthly spending and returns a percentage of that amount. Keep in mind, each card has its own rewards structure, incentives, and program rules. To pick the best fit, familiarize yourself with different types of cashback cards and what they offer. Here's what to consider when choosing yours.
Cashback credit cards track your monthly spending and provide a percentage of that amount as cashback at the end of each billing cycle. Not all cards work the same; they vary in rewards, categories, and incentives. Understanding these differences will help you pick the most rewarding option. Below are key types and features to consider before making a choice.
Types of Cashback Credit Cards
Category-based Cashback Cards: Earn up to 5% cashback in select categories that rotate every three months, such as groceries or transportation. You need to activate these categories during each promotion period.
Tiered Rewards Cards: Receive higher cashback rates on specific categories like gas or dining, typically around 5-6%, while earning about 1% on other expenses. These cards often cap cashback in certain categories.
Flat-rate Cashback Cards: With these straightforward options, you earn the same percentage cashback on every purchase, eliminating the need to track categories or activate rewards.
When to Consider Cashback Credit Cards
Use cashback cards if you can pay your monthly bill in full, ensuring you maximize benefits without interest charges.
Cashback rewards are effective only when your balance is paid off each month; carrying a balance cancels out rewards and incurs interest.
Check your credit score beforehand—applying with a good score improves approval chances and prevents damage from multiple applications.
Limits and Conditions
Some cards impose monthly cashback caps, limiting total rewards earned. Others have no such restrictions.
Many require a minimum number of transactions per month or spending certain amounts at specific stores or on specific days to earn rewards.
No-Annual-Fee Cashback Cards
While many cashback cards charge annual fees, some provide excellent rewards without this cost. Examples include Discover it® – Cashback Match, Wells Fargo Cash Wise Visa®, Capital One® Quicksilver® Rewards, and Chase Freedom® cards. These options often rank among the best for 2018 and beyond.
