Updated July 2, 2018

It’s no surprise cash rewards are among the most popular credit card benefits. Cardholders paying off balances each month can avoid interest charges to earn lucrative cash back on everyday necessities, including groceries, gas and at restaurants. What’s not to like about cold, hard cash in your pocket, right? With this in mind, we've put together an in-depth guide about how to pick the right cash rewards program for your needs. Just read on below each card offer for more. Here are our picks of the best cash-back credit cards:

Discover it® Cash Back
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Discover it® Cash Back

Best for: Highest cash-back credit card

Discover it® Cash Back earns 5% cash back (on up to $1,500 in spending quarterly, and thus worth a maximum of $75) in rotating categories you activate such as gas, restaurants, Amazon.com purchases, and wholesale clubs, plus 1% cash back on all other purchases. Discover also automatically matches all the cash back earned, dollar for dollar, at the end of the first year for new cardholders. That works out to a 10% rate in the first year, which the highest we've seen. The card also cuts out-of-pocket costs by nixing both the annual fee and foreign transaction fees. Read our full Discover it® Cash Back review to learn more.

Wells Fargo Cash Wise Visa® Card
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Wells Fargo Cash Wise Visa® Card

Best for: Big sign-up bonus

This card offers one of the biggest cash sign-up bonuses we've come across for a no-annual-fee credit card. You can earn a $200 cash bonus after spending just $1,000 within three months of account opening. Add in the versatility of unlimited 1.5% cash back, a 0% intro APR offer, and valuable mobile phone insurance, and you can see why we covet this card. Read our full Wells Fargo Cash Wise Visa® Card review for more.

Bank of America® Cash Rewards Credit Card
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Bank of America® Cash Rewards Credit Card

Best for: Gas and groceries cash rewards

Cardholders looking for a solid cash-back credit card should expect one packed with valuable features, such as Bank of America® Cash Rewards. This credit card dishes out a lucrative $150 new cardholder cash rewards bonus offer and one of the lower spending thresholds we’ve come across, requiring cardholders to spend at least $500 on purchases in the first 90 days. Tons of other perks are available as well, including bonus-category cash back of 3% on gas and 2% at grocery stores and wholesale clubs (on the first $2,500 quarterly in combined bonus category purchases), a 0% intro APR offer, and your FICO® Score for free.  Read our full Bank of America® Cash Rewards review to learn more.

Capital One® Quicksilver® Card - 0% Intro APR for 15 Months
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Capital One® Quicksilver® Card - 0% Intro APR for 15 Months

Best for: Flat-rate cash rewards

Not only does the card include a $0 annual fee, but the card also offers a $150 sign-up bonus after spending $500 within three months of account opening, unlimited 1.5% cash back, and a 0% intro APR for 15 months for purchases and balance transfers. These flagship benefits are competitive with other top cash-back cards, save for this offer also including no foreign transaction fees. Read our full Capital One® Quicksilver® Card - 0% Intro APR for 15 Months review to learn more.

Capital One® Savor® Cash Rewards Credit Card
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Capital One® Savor® Cash Rewards Credit Card

Best for: Dining and grocery cash back

This card offers one of the highest rates we've come across for unlimited dining and grocery rewards. Cardholders earn 3% back for dining, 2% back for groceries, and 1% on all other purchases. What's more, there's a $150 sign-up bonus after spending just $500 within three months of account opening, among other valuable perks worth reading about in our full Capital One® Savor® Cash Rewards Credit Card review.

Chase Freedom®
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Chase Freedom®

Best for: Bonus cash back and $0 annual fee

Chase Freedom® has found a spot in many wallets since the card packs in a deep bench of perks alongside lucrative cash rewards. Importantly, cardholders earn a $150 sign-up bonus after spending just $500 within three months of account opening, on top of 5% cash back (on up to $1,500 of bonus category spending each quarter) in rotating categories you activate, and 1% on all other purchases. Add in a lengthy 0% intro APR offer for 15 months for balance transfers and purchases and you can understand why the card landed a spot on this list. Read our full Chase Freedom® review to learn more.

Blue Cash Everyday® Card from American Express

Blue Cash Everyday® Card from American Express

Best for: Gas and U.S. supermarket rewards

The cards most notable features are a $150 statement credit when spending at least $1,000 within three months, 3% cash back at U.S. supermarkets for up to $6,000 spent each year, and 2% cash back at U.S. gas stations and at select U.S. department stores. Read our full Blue Cash Everyday® Card from American Express review.

Cash-back credit card pros

Up to 10% back on your spending -- The highest cash-back credit cards offer promotions that can help you pocket up to 10% back, while others earn cash rewards at rates of 1% to 5%. This is a simple way to make your money work harder for you.

Broad benefits -- These cards are essentially the Swiss Army knives of the credit card market, since they tend to pack in a wide array of benefits, including 0% intro APR offers, fee waivers, and FICO scores for free.

Easy-to-redeem cash back -- Most cards enable easy redemptions with quick turnaround times for statement credits or bank transfers.

Sign-up bonuses -- Many cards reward spending for more than just ongoing purchases, and include cash sign-up bonuses of up to $200 with no annual fee.

Cash-back credit card cons

Higher APR -- Credit card companies are (justifiably) in the business of turning a profit, so for every lucrative perk there tends to be an associated cost. Cash-back credit cards tend to charge higher APRs than other card categories.

Not ideal for balance transfers -- Cash-back credit cards don’t include the longest 0% intro APR offers, which can last as long as 21 months. Balance-transfer credit cards are a common and powerful strategy that cardholders use to pay off debt balances faster, but It’s more common for cash-back cards to include a 0% intro APR of nine months to 15 months, if they offer any at all.

Annual fee -- Some high-rate cards do charge an annual fee.

How to get cash back from credit cards

Securing cash rewards from credit cards can be accomplished in three steps.

1. Match the cash-back credit card for your needs. There are several card categories for cash-back fans to choose from when applying for a card. You’ll want to zero in on cash-back cards catering to your specific need, rather than pure balance-transfer credit cards or travel credit cards, both of which tend to lack the highest cash-back rates. That means cardholders spending heavily in bonus categories may want to choose a bonus cash-back credit card whereas cardholders with varied budgets may earn more overall cash rewards by focusing on an all-around card that earn high, flat-rate cash back.

2. Place routine purchases on the card to qualify for cash rewards. We suggest placing routine purchases on credit cards that you plan to pay off, so you avoid interest charges. This savvy strategy makes you a “transactor,” someone who carries a credit card for the sole purpose of earning cash rewards. There’s no sense in piling up cash back at low single-digit rates only to watch as it gets eaten up by far higher double-digit interest charges.

3. Redeem available rewards. Cash rewards will post to your credit card account within a specified time frame. Many issuers post rewards on a monthly basis, and most require a minimum level of available rewards (frequently $25) before cash back is available. Depending on the card, funds can be either applied as statement credits, transferred to a bank account, sent via check, or redeemed for gift cards and merchandise. But be careful when redeeming rewards for anything other than cash, as the conversion rate may be inferior to what you’d receive when taking a statement credit or receiving cash.

Where can I get cash back on my credit card?

The popularity of cash-back credit cards means that there’s a card for practically every need. This includes essentials such as gas, groceries, and wholesale clubs; less essential spending at Amazon.com, department stores, and restaurants; and even purchases at Disney, or on niche sites online. Trust us when we say that this sample list is just the tip of the iceberg.

The most common categories for bonus cash back, which can earn cash back at rates from 2% to more than 5%, are listed below:

  • Dining
  • Gas
  • Grocery stores and wholesale clubs
  • Department stores
  • Online sites
  • Entertainment

Cash back isn’t just limited to certain spending categories, since all cash-back card purchases tend to earn cash back at a base rate of 1%.

How to pick the right cash-back credit card

It’s essential to focus on your routine purchases and credit card spending habits when choosing the right card for you. We suggest keeping a thin wallet (especially if you’re a new cardholder) to simplify managing your credit card budget. Piling on debt is a likely outcome if finances become too complicated and burdensome to manage.

1. Determine whether you’re planning to carry debt. The true value of a cash-back credit card is limited to the costs of carrying it, including interest charges when carrying debt. That’s why we believe you should only focus on earning cash rewards if you pay off balances each month to avoid interest charges. If you’re planning to carry a balance month to month, then credit card rewards strategies could leave you deep in the red. If you are already in debt, a balance-transfer credit card may be a better solution; it will chip away at debt balances faster and position you to earn cash-back credit card rewards later.

2. Figure out your major spending categories. Cash-back cards can be powerful tools to make your money work harder for you, when your typical spending habits are aligned with the right card. We suggest reviewing three to four months of bank statements to nail down your major spending categories. This essential step not only helps you choose which cash rewards program will earn you the most cash back, but it also helps nail down an affordable credit card budget.

3. Determine which card will earn your budget the most rewards. With your spending habits now in mind, you can compare cash-back credit cards side by side to determine which will help you pocket more rewards.

  • Bonus cash-back credit cards -- The credit cards with highest cash back offer cash in rotating bonus categories, which can be worth as much as 10% back.
  • Flat-rate cash-back credit cards -- The alternative is a flat-rate card that earns unlimited rewards at a constant rate; the best offers tend to be 1.5% to 2%.

Knowing your budget helps narrow down the offers to the most valuable. So, let’s run through two sample budgets with two popular credit cards to see what type of card may be best for each. 

Budget Example Monthly Spending Outside of Bonus Categories Monthly Spending In Bonus Categories
Scenario 1 $3,000 $0
Scenario 2 $2,500 $500

Using the above sample budget we can understand the difference in total rewards earned based on a budget and two popular cash-back credit cards.

Discover it® Cash Back offers 5% back in bonus rotating categories (on up to $1,500 of bonus-category spending each quarter) and 1% on everything else. 

Capital One® Quicksilver® Card - 0% Intro APR for 15 Months earns a flat rate of 1.5% back for all purchases.

Cash-Back Card Offer Cash Rewards Earned (Scenario 1) Cash Rewards Earned (Scenario 2)
Discover it® Cash Back $360 $600
Capital One® Quicksilver® Card - 0% Intro APR for 15 Months $540 $540

You can see that cardholders making the most of bonus-category purchases will net more cash rewards with a bonus cash-back credit card than people who rarely spend in bonus categories.

Conversely, cardholders with varied budgets outside of bonus categories will pile on more cash rewards by swiping a flat-rate card.

4. Account for fees. Again, cash rewards are limited to the costs incurred in earning them. So use your calculations in the previous step and then subtract prominent fees, such as the annual fee. Many cards with high cash back don’t charge an annual fee, so the rewards earned may give you the full picture.

Running through these four steps and comparing the final results across a handful of offers will get you 95% of the way to finding the best cash-back credit cards for your needs.

Types of cash-back rewards (cash back versus points)

There are two primary types of cash-back cards: One offers cash back for purchases; the other offers points, which can subsequently be redeemed for cash back or gift cards -- or sometimes, through an issuer’s portal for merchandise. 

True cash-back cards tend to offer the best conversion value for cash, while it’s common for points cards to penalize cash redemptions with an inferior per-point value. We Fools are fans of cash in hand, and generally recommend cash back as the preferred redemption option for cash-back credit cards. 

What to expect with sign-up bonuses

A big draw of these cards is that a sign-up bonus is practically required to attract new members, so issuers are willingly going toe-to-toe to compete for new business. That’s a win for us card-carrying consumers!

The top no-annual-fee credit cards generally include cash sign-up bonuses that range from $150 to $200, and require you to spend $500 to $1,000 within three months to qualify.

Discover is an exception among the major issuers: It doesn’t offer a traditional sign-up bonus with its Discover it®-branded cash-back cards. Instead, Discover doubles all the cash back you earn in your first year. The size of the bonus is limited to how much you spend, and Discover even doubles 5% bonus categories.

Paying an annual fee can amp up the sign-up bonus value, but we’ve found that the annual fee doesn’t do as much for increasing the bonus value as it does for increasing a card’s rewards rate.

Focus on no-annual-fee credit cards

The credit card landscape is fiercely competitive for issuers, and consumers benefit as each issuer battles for new accounts. Often the cost of carrying a top cash-back credit card can approach $0. In fact, credit cards offering 10% cash back -- among the highest rates available -- usually have a $0 annual fee.

Paying an annual fee can make sense if you have a big enough spending budget to justify it, but you should expect to pay no more than $100 each year for a high-quality offer. Some cards even waive the annual fee for the first year as a sign-up incentive.

A simple calculation can tell you how much spending is required to offset the cost of an annual fee with rewards earned. For example, on a credit card with a $95 annual fee that earns cash back at a 2% rate, the break-even spending point is $5,000 (100 ÷ 0.02 = 5,000).

Annual Fee Cash Rewards Rate Spending Breakeven Point
$50 1.5% $3,333
$50 2.0% $2,500
$50 5.0% $1000
$100 1.5% $6,666
$100 2.0% $5,000
$100 5.0% $2,000

Other common credit card fees are charged for foreign transactions, late payments, cash advances, and balance transfers. Depending on the card offer, some of these fees may be waived, but we’ve yet to find credit card nirvana -- an offer that nixes all of them.

Cash-back credit cards and credit scores

The top cash-back credit cards generally require good credit (700+ FICO score) or excellent credit (750+ FICO score) for approval. That’s not to say that people building their credit won’t qualify for the credit cards offering the highest cash back. In fact, cardholders have reported approval for flagship cash-back cards with FICO scores in the mid-600s. That’s because other factors are assessed during the application process, including current debt and reported income. 

People with lower credit scores won’t be completely cut off from earning cash back, but should expect lower-rate cash rewards programs in the range of 1% to 1.5% for a flat-rate card.

How many credit cards is too many?

There are some situations where we believe you could have too many credit cards. If you’re consistently forgetting to pay by the due date, if you’re paying multiple annual fees but spending less than $20,000 on credit cards each year, or if you’re not paying off balances each month, then chances are you have too many credit cards. In these instances, a balance-transfer credit card with a 0% intro APR offer may be the best option to get out of debt faster.

We Fools value simplicity, and recommend that most people carry no more than one or two credit cards. Carrying more cards complicates finances, takes time that may not justify the rewards, and increases the risk of piling on costly debt. 

On the other hand, “transactors,” who are earning rewards and avoiding interest charges, might justifiably pack their wallets with cards to optimize spending for bonus categories while still managing to stay on track. We wouldn’t suggest these people make their money work less hard for them.

Credit scoring may also be a factor in determining how many credit cards you should have, since each new card application can put downward pressure on your credit score. New credit accounts for 10% of your FICO score, and firing off too many applications in a short period can knock 5 to 10 points off your score per application. But your FICO score will rise as you pay off balances like clockwork on each card, and keep debt to a minimum -- or better yet, don’t carry any at all.

Best cash-back credit cards

Card Offer Best For
Discover it® Cash Back Highest cash-back credit card
Wells Fargo Cash Wise Visa® Card Cash sign-up bonus
Bank Of America® Cash Rewards Credit Card Gas and groceries cash rewards
Capital One® Quicksilver® Card - 0% Intro APR for 15 Months Flat-rate cash rewards
Capital One® Savor® Cash Rewards Credit Card Dining and grocery cash back
Chase Freedom® Bonus cash rewards with no annual fee
Blue Cash Everyday® Card from American Express Gas and U.S. supermarket rewards

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. See our advertiser disclosure policy for additional details. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool's alone and have not been provided or endorsed by bank advertisers. Review The Motley Fool’s ratings methodology to uncover how we pick the best credit cards. The Motley Fool owns shares of and recommends Visa and MasterCard. The Motley Fool recommends American Express.