For pure reward flexibility the cashback credit card is king, rewarding you for spending with cold hard cash for - you guessed it - more spending. That's good news if you've had your heart set on an expensive new bit of tech and want to make the purchase as cost-effective as possible.
There are no complicated points systems with these credit cards, just good old dollars and cents rewarded as you use that plastic. But to ensure that you’re getting the most money back in your account, it pays to choose the best cashback credit card for you.
Cashback credit cards can earn you a reward rate of anywhere between one and six percent on every transaction you make - it doesn't take long to work out how much you can get back when you splash out on that new phone or laptop. To find out which is best for you we've laid out all best credit cards with cash back below along with a helpful FAQ addressing everything you may be wondering about.
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Best cashback credit cards
Capital One Savor Cash Rewards Credit Card
1% flat-rate cashback | $95 annual fee (waived for first year)
4% on dining and entertainment; 2% at grocery stores
Wells Fargo Propel American Express® Card
1% flat-rate cashback | $0 annual fee
3x points on dining, travel and select streaming services (points are worth 1 cent apiece)
Blue Cash Preferred® Card from American Express
1% flat-rate cashback | $95 annual fee
6% on purchases at US supermarkets (on up to $6,000 of spending each reward year, then 1%) and on select US streaming subscriptions; 3% on transit and at US gas stations
Ink Business Cash Credit Card
1% flat-rate cashback | $0 annual fee
5% cash back at office supply stores on the first $25,000 spent in combined purchases each account anniversary year; 2% cash back on gas and restaurants on the first $25,000 spent in combined purchases each account anniversary year
Chase Freedom Unlimited
1.5% flat-rate cashback | $0 annual fee
3% cash back on the first $20,000 spend your first year. After that, 1.5% on all purchases
Cashback credit card FAQ
Do I really need a credit card?
Credit cards can be a brilliant idea. If you intend to pay it off in full straightaway and are simply using them as a way to get something back from your spending (cashback being the obvious example), it's a smart move. It can help you build up your credit rating, too.
But they can be a terrible idea. If you're applying for a credit card to buy something you can't really afford, then things can really spiral out of control. Interest rates can be punishing and you'll end up in more trouble than you were before.
Ask yourself: "do I really need that new gadget?". If the answer's no and your bank balance hasn't got enough in it for extravagant treats, then we wouldn't recommend grabbing a credit card.
What is a cashback credit card?
A cashback credit card is one that rewards you with money as you spend. These vary between one and six percent and fall into three categories of flat-rate, bonus and tiered. As the name suggests a flat-rate credit card pays the same rate across all your spending.
The bonus cards pay a higher rate for certain categories which change from time to time and one percent on other payment types.
Tiered cards pay higher rates on certain purchases, like gas or groceries, and 1 percent on others.
What makes the best credit cards for cashback?
The best choice for you depends on how you spend your money. For example the Alliant Visa Signature Credit Card offers a hefty 3 percent cashback and no fee in the first year. But then you could get a lower 1.5 percent fee on the Chase Freedom Unlimited card and enjoy double cash back (3%) on all purchases made in your first year up to $20,000 (then an unlimited 1.5% cash back thereafter).
Or, if you don't mind paying a $95 fee you can get a massive six percent back at US supermarkets, up to $6,000 per year; then one percent and on select US streaming subscriptions using the Blue Cash Preferred® Card from American Express plus the bonus of a $250 statement credit after spending $1,000 in your first three months.
How much cashback can I claim with my credit card?
The amount of cash you get back depends on the card that you've picked. If you're going to make a big purchase at once then a card that offers bonus points initially for spending early on might be ideal.
If you're going for a more steady climb then something that takes your regular purchases, like groceries and gas, into account could be a better option.
Discover offers a great deal on the Discover It® Cash Back card where it will match all the cashback you've earned at the end of your first year, no matter how much.
Whatever way you spin it, using a credit card with cashback can be a nice little binus if you've got your eye on a price purchase like a new laptop, for example.
How should I choose my cashback credit card?
First up you want to decide which is the best category for you. If you're using the card for regular steady shopping then a flat-rate card could work well for you. The Capital One Quicksilver Cash Rewards Credit Card gives you a 1.5 percent rate plus a one-time $150 cash bonus for spending $500 within the first three months.
But if you're after certain benefits and plan to spend a lot in a particular place then a bonus card could be a winner for you. Again, that Discover It Cash Back card has got to be the winner here with that matching of all your cash back earned after a year.
If you're a mix of the two then a tiered card is for you. Discover It® Chrome is great here as you still get that matched yearly cash back but also a rate of 2 percent at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1 percent on all other purchases.
Cashback credit cards: what else should I consider?
From the outset it's good to decide if you're willing and able to pay an annual fee. This will cost you in the short term but opens up a world of better benefits and rates that should ultimately pay off that initial fee and earn you more in the long run. Of course if your rate of spending doesn't add up to enough benefits to pay off the fee then it's probably not one for you.
Redemption flexibility is something to look out for too – if you want that cash back fast then be sure the card you're going for allows that rather than making you wait a certain period of time before you have access.
Some cards also offer a sign-up bonus so pop that into your calculations when working out which will get you the best cash back value in the end. There are also options with an introductory zero-percent APR so keep an eye out for that if it sounds appealing for your needs.
All that said you don't have to stick to one card. In fact, it can work out more economically viable to have a few cards on the go at one time. That way you can have the right card for the best benefit in any given situation. One may earn you more points on groceries and gas while another could payout better for a big one-time purchase like a TV.
If you've gone for a bonus card and the categories that offer benefits rotate, don't forget to check in each quarter so that you've activated the new category and know what to use the card on for maximum cash back benefits.
Lots of online credit card malls, which you get to when you login to your card account, can offer even more cashback on your online purchases saving you money and a trip to the store all at once.
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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.