When most people hear the phrase “credit card rewards,” their minds immediately turn to cash back rewards. And why not? Flip on the TV, navigate to your favorite website, or drive around your hometown and you’re bound to see an ad for a cash back credit card before long.
Cash back credit cards are popular because they provide tangible, easy-to-understand benefits. Who doesn’t like getting a credit on their monthly credit card statement – or, better yet, actual cash deposited into the account of their choice?
Not all cash back credit cards are created equal though.
Some offer the same cash back rate on all purchases. Others offer higher cash back rates on certain spending categories, such as groceries or gas, and lower rates on everything else. Still others offer bonus cash back on spending categories that rotate every quarter. A few accrue cash back on purchases and monthly payments. And some cash back cards even hew to hybrid models, with cash back on certain spending categories and different types of rewards (such as airline miles) on others.
You’ll find each type of card on this list of the best cash back cards available to U.S. consumers today. Keep in mind that most cash back credit cards require applicants to have very good to excellent credit – usually indicated by a credit score above 700, and sometimes even higher. If you don’t meet that threshold, work on building your credit before applying.
Best Cash Back Credit Cards
1. Blue Cash Preferred® Card from American Express
6% Cash Back at Supermarkets; 3% at Gas Stations and Department Stores; 1% Elsewhere; $150 Sign-up Bonus
If you love the supermarket, you’ll love the Blue Cash Preferred Card from American Express. You get 6% cash back on all supermarket transactions, up to a $6,000 annual spending limit. Once you hit $6,000, you get 1% back on supermarket purchases, with no upper limit. There’s no spending limit on the gas station and department store categories – you get 3% cash back on every $1 spent in those places, period. And you get 1% cash back on all other purchases, with no limits.
Cash back comes as a statement credit. However, there’s a significant drawback: a $75 annual fee.
Another smaller drawback of the Blue Cash Preferred card is American Express’s restrictive definition of “supermarket.” Superstores like Walmart, wholesale clubs like Costco, and alcohol retailers aren’t considered as supermarkets for this card’s purposes. The annual fee does cut into your earning potential somewhat – but since the 6% supermarket cash back doubles what most competing cards offer, you’re still likely to come out ahead if you take full advantage of this category.
If you’re struggling to meet your $6,000 annual supermarket spending limit with food and dry goods purchases alone, make up the difference by purchasing other merchants’ gift cards at the supermarket checkout counter. It’s like getting an immediate 6% discount at your favorite restaurants, retailers, and e-commerce websites.
- Sign-up Bonus. If you make $1,000 in qualifying purchases within three months of signing up, you get a $150 statement credit.
- Cash Back Rate. 6% cash back at supermarkets, up to $6,000 in spending per year. After that, you receive 1% cash back at supermarkets. Also, this card offers unlimited 3% cash back at gas stations and department stores, and 1% cash back on everything else.
- Redemption. The minimum redemption is $25. You can redeem in $25 increments ($25, $50, $75, and so on) for statement credits.
- Introductory APR. 0% APR on purchases and balance transfers for 15 months.
- APR. After the introductory period, APR varies between 13.24% and 22.24%, depending on your creditworthiness and prevailing interest rates.
- Key Fees. There’s a $75 annual fee. The foreign transaction fee is 2.7%. Balance transfers cost either $5 or 3% of the amount of each transfer, whichever is greater.
- Other Perks. If you attempt to return a purchased item within 90 days and the merchant refuses to accept it, AmEx’s Return Protection policy refunds the item’s entire purchase price, up to $300 per item and $1,000 per calendar year.
