Choosing a Cash Back Credit Card

Credit Cards2 years ago
Credit Card and Cash in a back pocket

If you are looking for ways to optimise your spending and earn a little extra with each purchase you make, then a cash back credit card may be your best bet. But before you dive into picking a card, you should make sure that you know what you are looking for and how to determine which card is the best for you.

Below we will look at everything you need to know about cash back credit cards – from What’s cash back in the first place? to Which Cash Back Credit Card is the best for me? By the end of this article you should feel confident in how to pick the best cash back credit card for your spending habits and lifestyle.


What’s Cash Back and What are Cash Back Credit Cards?

Cash back credit cards are credit cards with give your bonus rewards when you use them to make purchases. These bonuses can be in the form of points or dollars and will be calculated based on a percentage. For example, if you have a cash back credit card with a reward rate of 2% and spend $100, you will be rewarded with $2 cash back.

Although these percentages may not seem like much initially, if you regularly use your cash back card to make your purchases, you will find that your points or dollar rewards will soon start to build up.


Discover It Cashback

Best for Cash Back

Intro offer

Unlimited Cashback match

Annual Fee


Recommended Credit


Unlimited Cashback match

Discover It Cashback.png

How do Cash Back Credit Cards Work?

You will be able to start building up your cash back amount when you make purchases using your credit card within certain eligible retail sectors such as gas stations, restaurants or grocery stores. The types of stores which you will be able to earn cash back from will vary depending upon your card, as will the percentage at which you earn cash back bonuses. Some cash back cards may also have monthly or quarterly limits on the amount of cashback you can gain within the period.


Is Cash Back Free Money?

In a sense you can think of the bonuses you earn from cash back credit cards as free money, although you need to spend money using the card to accrue it. You may also find that rather than cash, you are rewarded in points, gift cards and travel points. There are also restrictions as to which type of stores you can shop in to earn your cash back points and bonuses. But if you are making these purchases anyway, a cash back credit card is a fantastic way to earn a little extra along the way.


Is Cashback a Good Idea?

Cash back credit cards can be an excellent choice for you to earn some extra money or gift cards with purchases that you would be making anyway such as in gas stations, restaurants and grocery stores. You may find that building up your cash back on items can help if you are saving for a specific purpose such as a vacation or big purchase.



Is there a Downside to Cash Back?

When choosing your cash back credit card you need to make sure to read the terms and conditions to check for the downsides of signing up to the scheme. These can include a lengthy wait before you are able to access you cash back rewards, a cap on how much cash back you are allowed to earn in a certain period and a higher than usual APR on credit card purchases.


How do I choose the Top Cash Back Credit Cards?

Choosing the best cash back credit cards for you will depend upon your spending habits and where you normally shop. Cash back credit cards will vary in terms of the percentage cash back you earn, and which purchases will qualify for the scheme.

What types of Cash Back Credit Cards Are There?


Cards with flat rate cash back –

These cards will give you the lowest level percentage cash back on purchases but will apply to everything you buy.


Cards with fixed bonus categories –

These cards will only give you cash back on certain categories but at a higher rate than flat rate cards.


Cards with changing bonus categories –

The categories which you can earn cash back on will change on a rotating basis, making it more difficult to plan your cash back spending, but the cash back percentage rate is generally higher.


Which Cash Back Credit Card is Best for Me?

Below you will find a break down of the top cash back credit cards with details about how much you can earn and where.


Blue Cash Preferred® Card from American Express

· Bonus Cash Back rate of 6% on supermarket purchases for the first $6,000 you spend, 3% cash back on transport costs, 1% on other eligible purchases.

· $95 Annual Free

· Welcome bonus of $350

· APR of 15.49%-25.49% Variable


Citi Custom Cash℠ Card

· 5% cashback on your first $500 dollars worth on eligible purchases within each billing cycle. 1% cashback on eligible purchases after this amount.

· $0 Annual Fee

· Welcome bonus of $200

· APR is 15.49% - 25.49% Variable


Chase Freedom Flex℠

· 5% on eligible purchases in rotating categories up to the sum of $1,500. 5% on travel, 3% on restaurants and 1% on your other purchases.

· $0 Annual Fee

· Welcome bonus of $200

· APR of 15.74% - 24.49% Variable


Discover it® Cash Back

· 5% cashback on eligible purchases with stores such as Amazon, restaurants, gas stations and grocery stores.

· $0 Annual Fee

· Welcome bonus of 1 year Discover Match

· APR is 13.49% - 24.49% Variable


Wells Fargo Active Cash® Card

· 2% flat cash back rate on your purchases

· $0 Annual Fee

· Welcome bonus of $200

· APR between 16.49% and 26.49% Variable


Bank of America® Unlimited Cash Rewards Card

· 1.5% flat cash back on your purchases

· $0 Annual Fee

· Welcome bonus of $200

· APR rate of 15.49% - 25.49% Variable


Capital One® Walmart Rewards® Card

· Bonus Cash Back Percentage of 5% on Walmart purchases, 2% on restaurant purchases and 1% everywhere else Mastercard is accepted for payment.

· $0 Annual Fee

· Welcome bonus of 5% cashback for the first year.

· APR is 17.99% - 26.99% Variable


Amazon Prime Rewards Visa Signature Card

· 5% cash back on Amazon purchases, 2% cashback at drugstores, gas stations and restaurants, 1% cashback on your other purchases.

· $0 Annual Fee if you are an Amazon Prime Member

· Welcome bonus of an Amazon Gift Card

· APR is 14.99% - 22.99% Variable


What Credit Card gives me the Most Money Back?

As you can see above, some of the most generous cash back percentages come with the Citi Custom card, the Discover It Card and the Blue Cash Preferred. These cards however have restrictions as to eligible places you can make your cash back purchases and how much cash back you are allowed to build within a billing cycle.

The flat rate cards above may only give 1.5-2% cash back, but you have much more freedom as to where you can make your purchases and may find you end up racking up more dollars with your everyday purchases using these more general cards.

At the end of the day the card which will give you the most money back will be the one which fits you spending habits. If you happen to shop at or are willing to switch to eligible stores for a higher cash back percentage then these may be the cards for you. However, if you want more freedom with your spending while earning cash back it may be best to go for the flat rate cards.


How Many Cash Back Cards Should You Have?

You can make the most of your spending by using two different cash back cards. Use one of the higher cash back cards whenever your purchases are eligible and the lower percentage flat rate card for everything else. This should ensure that you are making the most out of all your purchases, no matter where you shop.


Summary - How to Choose the Top Cash Back Credit Card in 2022

Now you should feel confident in answering the question “what’s cash back?” and know what you are looking for when you start your search for the Best Cash Back Credit Card for your lifestyle and your spending habits.

When choosing the best cash back credit cards for you there are many things to consider. It can be easy to be attracted by the highest % cash back rate and leave it at that. However, it pays to do your research; you should look at the APR offered on the card, which purchases are eligible under the scheme and whether there is a limit on the amount of cash back you are allowed to build during each billing cycle. Only when you’ve answered all these questions will you be able to confidently assess which cash back credit card is best for you.

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