Credit cards are a banking investment with an equal number of pros and cons. Initially, you’ll need to develop a positive credit score with a lender that will be happy approving you for an even greater amount of credit. If you start building credit early, credit companies will often take greater steps to ensure you are accommodated, whether with perks or with a greater card limit.
There are many types of credit cards. Prepaid cards, cash back cards, premium credit cards, and travel cards just to name a few. One of the most favorable types of cards is the cash back variant, since you can earn money based on a percentage of what you spend. In this article, we will be covering cash back credit cards, their benefits, and the top five that are currently offered. Let’s take a moment and explore your banking options!
What Is a Cash Back Credit Card and Why Should You Get One?
A cash back credit card is simply a credit card with which you receive “cash back” for purchases you make online and in stores. Each company is different, but the general structure of the cards remains the same – spend an amount, and receive a percentage of that amount as an account credit. Fairly simple, right?
You may be asking yourself, I already have a credit card, why do I need a cash back one? Well, who doesn’t love extra cash? Your banking history is an investment and is extremely important down the line if you choose to buy a house, a car, or take out loans. Gaining access to a cash back credit card and having the credit to do so, shows you are a worthy person to lend money to and makes banking that much easier. So, if you want to earn cash while improving your credit score go for it!
The Top 5 Credit Cards for Cash Back
1. Capital One QuicksilverOne Credit Card
For people with fresh lines of credit, the 1.5% cash back rate is a great starting amount and the unlimited rewards program makes building credit more fun than it normally is. The QuicksilverOne Card not only helps focus on building credit, but offers a special card entirely for people building credit. No transactions fees, and not to mention a credit jump for reliable spenders.
However, with a high APR and a high annual fee of $39, the card’s perks don’t come for free. Paying on time every month is a necessity or else this card may leave its mark on your credit history.
– Incredibly easy to sign up
– Earn 1.5% cashback on every buy
– No transfer fee
– $39 annual fee
– High APR
Best For: Average Credit
2. Citi Double Cash Card
This card is perfect in all spending fields, earning cash back in every possible spending category and every bit you make goes towards either a gift card, check, or a statement credit. Not to mention that with every purchase you make you get 1% cashback & 1% back when you pay off things you buy with your card.
With no sign-on bonus or higher rewards categories, this can be a bummer. Plus, there is a minimum of $25 cash back redemption which may take longer to earn.
However, this card is simple, easy to sign up, and can get you cash back incredibly fast. This card makes it perfect for young credit card buyers
– Earn 1% cashback on every purchase you make
– No annual fee
– No buying restrictions
– Minimum cash back of $25 which may take longer to earn than most cards
Best For: Flat-Rate Cash Back
3. Discover – Cashback Match
The Discover card is another great option for those looking for a cash back credit card. This card offers 1% cash back on all regular purchases. It also offers 5% cash back on specific categories up to $1,500. However, you must remember to opt in for these special bonus offers. In the past, categories have included gas stations, home improvement stores, restaurants, and even Amazon. This means that there is a good chance you will be earning cash back on things you were going to buy anyway.
This card also features a no annual fee, making it an easy choice for infrequent spenders. The standout feature of this card is its great sign-up bonus. Usually, the bonus would be awarded in a flat amount once you had spent a certain amount. With the Discover it card, the bonus is determined by your spending throughout the year. At the end of your first year, Discover will automatically match all of the cash back you earned throughout the year. This is what they call their Cashback Match.
– Excellent sign-up bonus
– No annual fee
– 5% cash back on certain categories
– Must opt in for bonus 5% cash back offers
Best For: Sign-Up Bonus
4. Chase Freedom
The Chase Freedom is likely the most popular cash back credit card out there today. This card offers rotating deals meaning you can get cash back on different purchases throughout the year. These categories shift quarterly which will give you plenty of time to use them.
This credit card is also highly versatile because it is accepted at more locations and the rewards are very easy to redeem. A new addition is the 5% cash back categories that feature select gas stations, grocery stores, and restaurants. The Chase Freedom also offers no annual fees and a 0% APR for the first 15 months. If all of that were not enough, Chase also provides a great fraud monitoring service and excellent customer service.
– Good sign-up bonus
– Automatic unlimited 1% cash back on all purchases
– Must opt in for bonus 5% cash back offers
Best For: Everyone
5. Blue Cash Preferred Card from American Express
This American Express cash back credit card offers some of the best features of our list. Once you move past the less-than-stellar annual fee, this credit card is probably the best to have in the long term. This card offers large cash back rates on most basic amenities. Perhaps the best is the 6% cash back at all grocery stores up to $6,000 a year. It also offers 3% back at gas stations and department stores. Every other purchase can earn you an unlimited 1% cash back. This card also features a pretty good sign on bonus of $150. If you regularly spend a lot of cash at the grocery store and the gas station, this is the credit card for you.
– Excellent cash back rates
– Sign-up bonus
– Perfect for common household purchases
– High annual fee
Best For: Everyday Spending