Among the dizzying array of rewards credit cards, cash-back credit cards stand out for their simplicity. The rewards you generate for making purchases on a cash-back credit card don’t need to be converted, transferred or strategically redeemed to maximize value. You just get cash deposited into an account or a statement credit on your monthly bill. 

The upside of these cards is less hassle and effort. The downside is your net reward rate will usually be slightly lower than if you were to sign up for a credit card with a complex earning and redemption process, such as you get with mileage cards. 

Hassle-free, cash-back rewards usually get automatically applied to your balance by credit card issuers after one or two billing cycles and — depending on your spending — can put a lot of money back in your wallet. Most consumers can earn anywhere from 2% to 4% overall using one of the best cards. So, if you spend $15,000 annually, that would translate to between $300 and $600 a year of cash-back rewards.

To figure out which cash rewards credit card or cards make sense for you, I’ve chosen eight high-value options from the crowded market. Some are no-fee, flat-rate credit cards that earn the same amount on all purchases. Some are limited to specific spending categories (e.g. groceries, dining, gas, transit or travel) but have a higher rewards rate, while others charge an annual fee. I’ve also outlined important information for reach rewards credit card, like whether the card has a transfer fee, bonus redemption thresholds, introductory APR and credit requirements (not down to your individual credit score, but generally speaking).

I’ve organized the list by group, starting with the most straightforward cluster and ending with the most complicated.

To approximate the value of each card for an individual and assess which spending situations make sense for each, I leveraged data from the Bureau of Labor Statistics’ Consumer Expenditure Survey.  

Best cash back credit cards

Card Best for Reward rates* New member bonus
Chase Freedom Unlimited Best flat-rate card with bonus Unlimited 1.5% cash back on every purchase $200
Citi Double Cash Best flat-rate card for higher spenders Unlimited 2% on every purchase $0
Wells Fargo Propel American Express Best no-fee category card Unlimited 3% cash back on dining, travel, transit and streaming $200
Bank of America Cash Rewards Best quarterly rewards card / best for online shopping 3% cash back in choice category (gas, dining, travel, online) and 2% back on groceries up to $2,500 per quarter $200
Amazon Prime Rewards Best for Amazon and Whole Foods shoppers 5% on Amazon, Whole Foods; 2% at restaurants, gas stations, drugstores $70 Amazon gift card
Apple Card Best for regular Apple shoppers, instant rewards and privacy 3% on Apple, Uber and Walgreens purchases, 2% on Apple Pay purchases $0
CapitalOne Savor Best for dining and entertainment Unlimited 4% cash back on dining and entertainment, 2% at grocery stores $300
Blue Cash Preferred from American Express Best for big grocery bills 6% cash back on groceries up to $6,000 per year. 6% on streaming services, 3% on transit and gas $300

* All cards listed offer 1% back on all other purchases

The simplest: No-fee, flat-rate cards

Chase

Reward rates: Unlimited 1.5% cash back on every purchase
Annual fee: $0
New member bonus: $200
Bonus redemption threshold: $500 in first three months
Credit requirement: Good to Excellent
Intro APR: 0% (15 months)
APR for purchases: 16.49% to 25.24%
APR for balance transfers: 16.49% to 25.24%
Balance transfer fee: 5% (minimum of $5)

The simplest cash back cards are those with flat rates and no fees. The Chase Freedom Unlimited card offers a flat, unlimited 1.5% cash back on all purchases regardless of spending category and doesn’t charge an annual fee. It’s a good introductory card for the world of cash back rewards.

Rewards details

The Chase Freedom Unlimited offers a $200 bonus after spending $500 in your first three months (one of the lowest bonus thresholds I found — see chart), but offers a slightly lower overall rate (1.5%) than the Citi Double Cash (2.0%). For cash-back rewards, the half percent might seem negligible, but it adds up to an extra $50 for every $10,000 spent.

When to use this card

For your overall credit card strategy, the Chase Freedom Unlimited can be the only card in your wallet if you’re going for simplicity, or your preferred card for whenever you buy something outside of another bonus category, like a plane ticket if you don’t have a card that offers bonus points for travel purchases. Keep in mind that cards that offer higher percentages on certain categories, like the Capital One Savor’s 4% for dining and entertainment, offer only 1% back on all other categories, so it pays to have a flat-rate card like the Freedom Unlimited handy for purchases that don’t fall into your other card’s bonus categories.

Redemption details

You can redeem any amount of Chase points either as a statement credit on your bill, or as a direct deposit into your bank account. The redemption flexibility is a nice advantage over other cards that only allow redemptions at certain levels, like 2,500 points or $25. 

CitiBank

Reward rates: Unlimited 2% cash back on every purchase
Annual fee: $0
New member bonus: $0
Bonus redemption threshold: None
Credit requirement: Good to Excellent
Intro APR: None
APR for purchases: 15.49% to 25.49%
APR for balance transfers: 15.49% to 25.49%
Balance transfer fee: 3% (minimum of $5)

Rewards details 

The Citi Double Cash card is as simple as the Chase Freedom Unlimited, but it’s one of the few cards that doesn’t offer a sign-on bonus. The trade-off with the lack of a sign-on bonus is an  above-average cash-back rate.

When to use this card 

Like the Freedom Unlimited, the Citi Double Cash card can be the only card in your wallet, or your preferred card for whenever you buy something outside of a bonus category.

Worth noting is that this card does have a 3% fee for anytime you make a foreign transaction. It does offer a cash advance, but the fee is either $10 or 5% of each cash advance.

Redemption details

Citi’s rewards can be redeemed starting at $25 and come in the form of either a check or statement credit. One redemption distinction to note for the Citi Double Cash card is that you get 1% back when you make a purchase, and the second 1% when you pay off your bill. Given that I recommend paying off your bill in full every month, I don’t place much importance on this split.

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The main difference between the two above cards is the cash-back rate and the initial bonus. Citi’s card is best over the long-term, while Chase lets you reap more rewards points immediately.

Once you spend $40,000 on the Citi Double Cash card, you make up for the $200 bonus, and everything after that is added value. Up to $40,000, your overall return rate is better with the Chase Freedom Unlimited. So if you’re thinking long-term, the extra .5% from the Citi Double Cash will pay off. If you’re only spending $15,000 annually with a cash-back card and you’re looking at only the next two years, then the Chase Freedom Unlimited makes more sense. For a graphical representation of the two cards, see below. ‘

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CNET

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From this point on, we’re getting into the strategic territory, so I’ll be evaluating cards based on how and when you use them. All of the remaining cards have different cash back percentages based on the type of purchase, so different spending habits will net different results. While there may be a card or two that makes sense as your only card, most of these will be best when paired with other cashback cards so you’re not making too many purchases outside of a bonus category.

Wells Fargo

Reward rates: Unlimited 3% cash back on dining, travel, transit and streaming, 1% on everything else
Annual fee: $0
New member bonus: $200
Bonus redemption threshold: $1,000 in first three months
Credit Requirement: Good to Excellent
Intro APR: 0% (12 months)
APR for purchases: 15.49% to 27.49%
APR for balance transfers: 15.49% to 27.49%
Balance transfer fee: 5% (minimum of $5)

Rewards details 

Wells Fargo Propel has the best combination of rewards rate (unlimited 3%) and breadth of categories (dining, gas, transit, travel and streaming services). The cash bonus ($200 after spending $1,000 in the first three months) is right in line with the $150-$200 industry standard. 

When to use this card 

Since the bonus categories aren’t rotating and the card covers a lot of ground, I recommend it paired with the Citi Double Cash or Chase Freedom Unlimited for non-bonus category spending. Remember that there’s little reason to log a purchase that only earns you 1% when no-fee 1.5% and 2% earners exist.

Redemption details

Propel’s cash rewards can be redeemed as either a deposit into a Wells Fargo account or as a statement credit. The minimum threshold for redemption is 2,500 points ($25).

Rewards comparison 

The closest card on the list to the Wells Fargo Propel is probably the Capital One Savor card, which earns 4% on dining and entertainment, 2% at grocery stores, 1% on everything else and charges a $95 annual fee. For the extra 1% to cover the $95 fee, you’d need to spend almost $800 monthly ($9,500 per year) on dining and entertainment. So unless you’re spending that much on dining and entertainment specifically, the Wells Fargo Propel is the better choice for cash-back rewards card.

Bank of America

Reward rates: 3% cash back in choice category (gas, dining, travel, online) and 2% back on groceries up to $2,500 per quarter
Annual fee: $0
New member bonus: $200
Bonus redemption threshold: $1,000 in first three months
Credit requirement: Good to Excellent
Intro APR: 0% (15 months)
APR for purchases: 15.49% to 25.49%
APR for balance transfers: 15.49% to 25.49%
Balance transfer fee: 3% (minimum of $10)

Rewards details 

The Bank of America Cash Rewards card is one of the “rotating bonus category” cards, meaning that the category that generates the 3% reward changes over the course of the year. However, unlike most other bonus cards which have set quarterly rotations or a rewards program, the Bank of America version lets you choose your category (up to once a calendar month) from a list of six: gas, online shopping, dining, travel, drug stores or home improvement and furnishings. 

When to use this card 

Given the flexibility of the rewards program, I recommend using this card to fill a gap in your spending strategy. If you have a flat-rate card, a card for groceries and one for dining and travel, but you spend over $100 a month shopping online, you can sign up for the Bank of America Cash Rewards card, choose “online shopping” and treat it as your online spending card. I use the online shopping category specifically because it’s less common than categories like gas or dining, but you can obviously pick the category that makes the most sense for your spending habits.

I don’t recommend this card if you’re doing a lot of overseas travel. It has a 3 percent foreign transaction fee.

Redemption details

You can redeem Bank of America cash rewards for any amount at any time and have them deposited into a Bank of America or Merrill account, or redeem them as a statement credit. 

Rewards comparison

Other bonus category cards, like the Chase Freedom or Discover It Cash Back, rotate through three or four different categories over the course of the year, making it difficult to maximize rewards or pair the card with other cards. That makes the flexibility and choice of the Bank of America card stand out.

While Netflix doesn’t have a credit card (yet), most of the other FAANG group members have made significant efforts in recent years to channel payments through their systems. Facebook is going the cryptocurrency route, Google Pay is a thing and now both Amazon and Apple have their own cash back credit cards. Even Verizon is getting into the credit card game.

Amazon

Reward rates: 5% on Amazon, Whole Foods; 2% at restaurants, gas stations, drugstores
Annual fee: $0
New member bonus: $70 Amazon Gift Card
Bonus redemption threshold: Card approval
Credit requirement: Fair
Intro APR: None
APR for purchases: 15.99% to 23.99%
APR for balance transfers: 15.99% to 23.99%
Balance transfer fee: 5% (minimum of $5)

This card is a must-have for anyone who shops regularly on Amazon. I’m not even going to offer a minimum recommended threshold as there’s no downside and few other cards offer Amazon-specific discounts.

Rewards details 

Given that you can buy just about anything on Amazon, 5% back on the popular online retailer is pretty sweet. The card also throws in 2% at restaurants, gas stations and drug stores, and 1% on all other purchases. While Amazon offers a basic, non-Prime member card with 3% back on Amazon purchases, I’m focusing on the Prime rewards card since I assume that if you’re making a significant amount of purchases each month (over $250) at Amazon or Whole Foods, you’re most likely a Prime member.

When to use this card 

If you shop a ton at Amazon and Whole Foods and most of the rest of your spending is at restaurants and on gas, the Amazon Prime Rewards card could be your only cash-back card. Outside of that specific spending profile, though, I recommend using this card like the others — as a supplement to a flat-rate card to earn cash for Amazon and Whole Foods purchases. 

Redemption details

You can redeem points at checkout while shopping on Amazon for any amount, or redeem them as a statement credit through Chase starting at 2,000 points ($20). Note that Amazon encourages the Amazon redemption option (obviously) and doesn’t mention cash, but it is in fact a no-fee option that can be redeemed at the same rate.

Rewards comparison

The only other card you might want to use for Amazon purchases is the Bank of America Cash Rewards card, which offers 3% back on online shopping (if you select that bonus category that quarter), which includes Amazon and a bunch of other online retailers. The percentage is 2% less than Amazon’s card, but if you shop at a variety of online retailers, this could make more sense. With some quick math, you’ll see that if more than half of your online shopping is non-Amazon, the Bank of America Cash Rewards card reaps the most rewards. Alternatively, to get the most cash back, sign up for both no-fee cards and use the BofA version for non-Amazon shopping. 

Apple

Reward rates: 3% on Apple, Uber and Walgreens purchases, 2% on Apple Pay purchases
Annual fee: $0
New member bonus: $0
Bonus redemption threshold: None
Credit requirement: Fair
Intro APR: None
APR for purchases: 12.49% to 23.49%
APR for balance transfers: Not offered
Balance transfer fee: Not offered

Rewards details

The Apple Credit Card has a unique rewards program structure, offering 3% on Apple, Uber and Walgreens purchases (an eclectic combination of categories to say the least), 2% on purchases made with Apple Pay and 1% on everything else. But unless you’re an Apple super shopper and everyday Uber user, the 3% category isn’t going to stand out much. Plus, having to use Apple Pay to hit 2% compares poorly with the Citi Double Cash card, which offers 2% on everything, no matter how you pay. There are some advantages to Apple’s card, though.

Other benefits

The Apple Credit Card’s privacy policy states that they will “never share or sell your data to third parties for marketing or advertising,” a significant gesture for those concerned with their personal data. The Apple Card’s reward structure is also distinct in that the cash back appears immediately in your account, hitting your balance at the end of each day. So if you can’t wait a month or two to redeem points and another 4-5 days for a statement credit to post to your account, the Apple Card’s instant rewards could be appealing. 

When to use this card 

If the primary 3% category (Apple, Uber and Walgreens) applies to a lot of your purchases, this is a good cash-back option. But, the 2% for Apple Pay is a little flimsy given not all retailers accept Apple Pay, while the Citi Double Cash offers 2% no matter what. This card is primarily for those who are interested in the card’s privacy policy and instant rewards. 

Finally, I should point out that Apple has made a big deal out of the low APR and lack of fees for things like late payments, but given our operating assumption that you’re paying off your balance every month on time anyway, I see that as less of a differentiating factor. Note that the Apple Card doesn’t report credit activity to all three major credit bureaus (only TransUnion), so if you’re trying to build your credit score, it will have less of an impact. 

Ah, now we’re getting deep into each cashback credit card. These two cards will rarely be your one-and-only cards, unless your overall spending is heavily tilted toward one category. However, they can get you 2% to 4% extra on certain categories, making them worth the annual fee if you hit certain spending thresholds in those categories. 

With a $95 annual fee for each card, you need to be a little more circumspect when deciding if a card is worth it. Usually, having extra cards in your wallet carries little downside (unless you’re not paying them off each month) and even helps your credit score by increasing your total available credit. But with these fee cards, you’re charged the $95 every year regardless of how much you use it, so take a beat to ensure it makes sense before applying. 

I recommend two in this category: The Capital One Savor card, which is great for dining and entertainment, and the Blue Cash Preferred card from American Express for groceries. Both offer a $300 sign-on bonus, but the Blue Cash Preferred threshold is much easier to hit ($1,000 in spending in the first three months, vs. $3,000 in spending for the Savor). 

American Express

Reward rates: 6% cash back on groceries up to $6000 / year. 6% on streaming services, 3% on transit and gas
Annual fee: $95
New member bonus: $300
Bonus redemption threshold: $1,000 in first three months
Credit requirement: Good to Excellent
Intro APR: 0% (12 months)
APR for purchases: 14.49% to 25.49%
APR for balance transfers: 14.49% to 25.49%
Balance transfer fee: 3% (minimum of $5)

Rewards details

The headline rate is the 6% on groceries, with a cap limit of $6,000 annually. If you’re hitting the limit, that 6% will reward you with $360 per year. The rewards cap is a little annoying, but given that it works out to $500 per month on groceries, it usually won’t come into play unless you’re a family of three or more. The Blue Cash Preferred card also offers 6% back on streaming services, but with most Americans maxing out at about $40-50 per month on streaming services (and many spend less than that), that part of the reward only amounts to around $35 of annual value. 

For most, the $300 bonus threshold is very easy to hit, so you can basically count it as a sure thing. But, unlike the Capital One Savor’s current offer, the fee isn’t waived for the first year.

When to use this card

Given the very generous 6% cash-back rate, you only need to spend about $140 per month on groceries to make up for the fee, and about $200 per month to earn the same amount of rewards as you would with a 2% cash back card. So if you spend more than $200 per month on groceries and streaming subscriptions, this becomes a profitable card. The real sweet spot is between about $350 and $500 monthly grocery spend, where you’re maxing out that 6%. 

I should also note that there’s a no-fee version of the Blue Cash card, called Blue Cash Everyday. But considering the bonus difference ($300 for Preferred vs $175 for Everyday) and the huge cash-back difference (6% on groceries vs. 3%, respectively), I was hard pressed to find many situations where the free card would be better.

Redemption details

You can redeem AmEx points only as statement credits, with no option to redeem them for travel, gift cards or deposits into a checking account. The minimum threshold for a redemption is $25. 

Capital One

Reward rates: Unlimited 4% cash back on dining and entertainment, 2% at grocery stores
Annual fee: $95
New member bonus: $300
Bonus redemption threshold: $3,000 in first 3 months
Credit requirement: Good to Excellent
Intro APR: None
APR for purchases: 15.99% to 24.99%
APR for balance transfers: 15.99% to 24.99%
Balance transfer fee: None**

Rewards details

The $300 bonus is a nice incentive to sign up, and effectively cancels out the annual fee for the first three years. But, keep in mind that the $3,000 bonus threshold is fairly high, so you might need to use the card for non-bonus category spending in those initial months to make sure you hit it. You’ll be sacrificing a few percentage points of rewards from other cards, but it’s worth it to make sure you don’t forego $300 — just do the math to ensure it makes sense.

The Savor card’s headline rate is the 4% you get on dining and entertainment, which includes bars and restaurants for dining and “tickets to a movie, play, concert, sporting event, tourist attraction, theme park, aquarium, zoo, dance club, pool hall or bowling alley” for entertainment. If you’re like most American consumers who spend more on dining than entertainment, then note the emphasis on that part of the bonus. 

When to use this card

This card makes sense if you’re spending more than about $300 per month on dining and entertainment. If that’s the case, I recommend only putting those purchases on it. There’s no reason to take the 1% penalty on non-dining and entertainment purchases. For those, use your 1.5% or 2% card. 

Redemption details

You can redeem your Capital One Savor points in the form of a statement credit or as a check, at any amount (no minimum thresholds or maximum earning caps). 

** 3% of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you.

Disclaimer: The information included in this article, including program features, program fees and credits available through credit cards to apply to such programs, may change from time-to-time and are presented without warranty. When evaluating offers, please check the credit card provider’s website and review its terms and conditions for the most current offers and information. 

source: cnet.com

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