In the world of credit cards, cash rewards have gained substantial popularity due to their straightforward and tangible benefits. These cards offer consumers the opportunity to earn cash back on their everyday purchases, turning routine spending into a financial advantage. However, with a plethora of options available, selecting the right cash rewards credit card can be overwhelming. To simplify your decision-making process, we’ve compiled a list of the best cash rewards credit cards across various categories, highlighting their key features, benefits, and considerations.
Introduction
Cash rewards credit cards have emerged as a valuable tool for consumers seeking financial benefits from their everyday spending. By providing a percentage of the amount spent as cash back, these cards offer an appealing way to offset expenses and even save money over time. However, not all cash rewards credit cards are created equal, and it’s important to carefully assess each card’s features, fees, and suitability for your spending habits.
Understanding Cash Rewards Credit Cards
Cash rewards credit cards operate on a simple premise: for every eligible purchase you make, a percentage of the purchase amount is returned to you in the form of cash back. This can vary from a flat cash back rate on all purchases to higher rates in specific spending categories. The key highlights to look for when evaluating these cards include:
- Annual Fees: Some cash rewards credit cards come with an annual fee, which can impact the overall value of the rewards you earn. It’s essential to weigh the annual fee against the potential cash back earnings to determine if the card is worth it.
- Regular APRs: The Annual Percentage Rate (APR) represents the interest you’ll be charged if you carry a balance on your card. Ideally, you should aim to pay off your balance in full each month to avoid accruing interest charges.
- Rewards Rates: Different cards offer varying cash back rates. Some may provide a higher rate for specific spending categories, such as groceries, gas, dining, or travel. Understanding these rates will help you maximize your earnings.
- Recommended Credit Scores: Cash rewards credit cards typically require a certain credit score for approval. It’s essential to know your credit score and apply for cards that align with your credit profile to increase your chances of approval.
- Card Details and Extras: Look for additional perks such as welcome bonuses, introductory APR offers, and special features like extended warranties, purchase protection, or travel insurance.
Factors to Consider Before Choosing a Cash Rewards Credit Card
Before diving into the specifics of the best cash rewards credit cards, consider these factors to ensure you make an informed decision:
- Spending Habits: Analyze your spending patterns to identify the categories where you spend the most. This will help you choose a card that offers higher rewards in those areas.
- Annual Fee vs. Rewards: Compare the annual fee with the potential cash back earnings. If the annual fee is too high, it might outweigh the rewards you earn.
- Redemption Options: Understand how you can redeem your cash back. Some cards offer flexibility in redemption methods, such as statement credits, direct deposits, or gift cards.
- Credit Score: Check your credit score to see if you meet the eligibility criteria for the card you’re interested in. Applying for cards that match your credit score increases your approval chances.
Best Cash Rewards Credit Cards: A Comprehensive Review
American Express Blue Cash Preferred® Card
Annual Fee: $95
Regular APR: 13.99% – 23.99% Variable
Rewards Rates:
6% cash back at U.S. supermarkets (on up to $6,000 per year, then 1%)
6% cash back on select U.S. streaming subscriptions
3% cash back at U.S. gas stations and on transit
1% cash back on other purchases
Recommended Credit Score: Good to Excellent (670 – 850)
Card Extras: Introductory 0% APR on purchases for the first 12 months, then a variable rate applies. $250 statement credit after spending $1,000 in purchases within the first 3 months.
- The Blue Cash Preferred® Card offers one of the highest cash back rates for supermarket purchases and streaming services.
- The 0% introductory APR period is beneficial for managing large purchases.
- The card comes with an annual fee, and the 6% cash back rate on groceries is capped at $6,000 per year.
Citi Custom Cash℠ Card
Annual Fee: $0
Regular APR: 13.99% – 23.99% Variable
Rewards Rates:
Earn 5% cash back on purchases in your top eligible spending category each billing cycle, up to the first $500 spent.
Earn 1% cash back thereafter.
Earn unlimited 1% cash back on all other purchases.
Recommended Credit Score: Good to Excellent (670 – 850)
Card Extras: None
- The Citi Custom Cash℠ Card stands out with its unique rewards structure, allowing you to earn 5% cash back in your top spending category each month.
- The 5% cash back category has a spending cap of $500 per billing cycle.
Chase Freedom Unlimited®
Annual Fee: $0
Regular APR: 14.99% – 23.74% Variable
Rewards Rates:
Earn unlimited 1.5% cash back on all purchases.
Recommended Credit Score: Good to Excellent (670 – 850)
Card Extras: Introductory 0% APR on purchases and balance transfers for the first 15 months, then a variable rate applies.
- The Chase Freedom Unlimited® card offers a flat 1.5% cash back rate on all purchases without any spending categories to track.
- The introductory APR period is advantageous for balance transfers.
- The cash back rate, while consistent, might be lower than other cards offering higher rates in specific categories.
Discover it® Cash Back
Annual Fee: $0
Regular APR: 11.99% – 22.99% Variable
Rewards Rates:
Earn 5% cash back on rotating quarterly categories (up to the quarterly maximum when you activate).
Earn unlimited 1% cashback on all other purchases.
Recommended Credit Score: Good to Excellent (670 – 850)
Card Extras: Discover will match all the cash back you’ve earned at the end of your first year.
- The Discover it® Cash Back card offers a unique rotating 5% cash back category that changes every quarter, along with a generous first-year cash back match.
- The rotating categories might not always align with your spending preferences, and you need to activate the categories each quarter.
Capital One Savor Cash Rewards Credit Card
Annual Fee: $95
Regular APR: 15.99% – 24.99% Variable
Rewards Rates:
4% cash back on dining and entertainment
2% cash back at grocery stores
1% cash back on all other purchases
Recommended Credit Score: Good to Excellent (670 – 850)
Card Extras: Introductory 0% APR on purchases and balance transfers for the first 12 months, then a variable rate applies.
$300 cash bonus after spending $3,000 on purchases within the first 3 months.
- The Capital One Savor Cash Rewards Credit Card offers attractive cash back rates for dining, entertainment, and grocery purchases, along with a substantial cash bonus for meeting the spending requirement.
- The annual fee might offset the rewards for individuals who don’t spend heavily in the specified categories.
Which Card Is Best Suited for You?
Selecting the best cash rewards credit card depends on your unique spending habits and financial goals. Here’s a quick guide to match each card with suitable preferences:
If you have a substantial grocery bill and enjoy streaming services, the American Express Blue Cash Preferred® Card offers top-tier rewards in these categories.
For individuals who prefer a flexible approach to earning rewards without an annual fee, the Citi Custom Cash℠ Card is a solid choice.
The Chase Freedom Unlimited® card is perfect if you want a straightforward 1.5% cash back rate on all purchases and benefit from an introductory APR period.
If you’re willing to adapt your spending to changing categories and want to maximize your rewards with a first-year match, the Discover it® Cash Back card is worth considering.
For those who frequently dine out, attend entertainment events, and prioritize groceries, the Capital One Savor Cash Rewards Credit Card can be highly rewarding.
Bottom line
Cash rewards credit cards offer an excellent opportunity to earn money while making everyday purchases. By considering factors such as annual fees, rewards rates, and card extras, you can make an informed choice that aligns with your spending habits and financial goals. The American Express Blue Cash Preferred® Card, Citi Custom Cash℠ Card, Chase Freedom Unlimited®, Discover it® Cash Back, and Capital One Savor Cash Rewards Credit Card represent some of the best options available in the market, each catering to different spending preferences. Remember, the key to maximizing your rewards is to use your card responsibly, pay off your balance in full each month, and make the most of the cash back benefits that these cards provide.
