Best Cash Back Credit Cards for June 2023

Cash back credit cards give a certain percentage of money back on your purchases. The amount you earn on cash back rewards depends on the card and the spending category.

Some cash back cards earn the same amount on purchases, while others have bonus categories where they earn extra on dining. The best cash back cards are easy to use, easy to track, and many of them do not charge an annual fee.

How to compare the best cash back credit cards

As you shop for reward credit cards, there will probably be multiple cards that you like. Before you pick the best credit card with cash back, compare these three important features.

• Cash back rate: This is the most important feature. Higher cash back rates save you more money, especially if you have a high flat rate on purchases or choose bonus categories that match your spending habits.
• Annual fee: Cash back cards with annual fees tend to have higher cash back rates. These higher rates can make up for the annual fee if you spend enough, but you'll need to do the math on the rewards you'll earn to make sure.
• Bonus rewards: Many include an introductory bonus reward, making it an easy way to collect cash back. You could also look for credit cards that give cash back with 0% intro APR offers, free credit score monitoring, or many other perks.

If you’re looking for a feature-by-feature comparison our credit card comparison tool can help.

Should I get a cash back credit card?

A cash back rewards card could save you money. If you have good or excellent credit and can qualify for the best cash back cards, then they're definitely worth checking out. But this type of credit card has its perks and its drawbacks.

The great thing about cash back cards is how simple and affordable they are. Anyone can benefit from cash back, and there's no learning curve involved like there can be with travel credit cards. You can find plenty of the best cash back credit cards with no annual fee. Even the ones with annual fees usually cost less than $100 per year.

There is a tradeoff to those benefits. Cash back cards are affordable, but they also generally have smaller bonuses and fewer features than you could get from a higher-priced travel rewards card. And while cash back means rewards redemptions are a breeze, there's no way to get more value out of cash back. With rewards credit cards that earn points, it's sometimes possible to extract more value from those points if you know how to use them.

How to maximize your cash back rewards

Using the best money back credit cards is a great way to save more every month. Here are the best tips to help you maximize cash back rewards:

Always pay with your cash back credit card. Since you're earning cash back on purchases, take full advantage. Put as much of your spending as you can on your cash back card. There's no reason to pay with cash or a debit card and leave cash back on the table.

Don't carry a balance. The key to saving money with a cash back card is to pay your credit card bill in full by the due date. If not, the card issuer can charge you credit card interest. That will likely cost you as much or more as the cash back you earned.

Get multiple cash back cards to earn more bonus rewards. Instead of using a single cash back card, open a few different cards that earn bonus cash back in separate categories. That way, you could have your gas and groceries card, your restaurant card, your Amazon card, and a card with a high flat rate for all those other expenses.

Complete the welcome bonus requirements. Welcome bonuses are some of the biggest cash back offers you can find, so it's important not to miss out. Whenever you get a new card with a welcome bonus, check how much you need to spend and how long you have.

Check your credit card's online shopping portal for special offers. Many credit card companies have online shopping portals where you can earn up to 10% back with some retailers. Make sure to check if your card issuer offers one and, if so, what type of bonuses are available.

Are cash back credit cards taxable?

In most cases, cash back credit cards aren't taxable. If you earn the cash back by using your card for purchases, then it's not taxable, because the IRS considers it a rebate on those purchases and not income.

That means any type of cash back credit card that requires spending money is treated as a rebate and isn't taxable. For example, if your card earns 4% on dining or an unlimited 2% cash back on purchases, you wouldn't need to pay taxes on that. This also includes welcome bonuses you need to spend money to earn, such as a bonus of $200 if you spend $500 in the first three months.

While cash back usually isn't taxable, it could be treated as income if it doesn't require any spending on your part. Common examples include welcome bonuses that don't have a spending requirement and referral bonuses.

Different types of cash back credit cards

There are three basic types of cash back credit cards: Flat-rate cash back cards, bonus category cash back cards, and rotating bonus category cash back cards. By understanding how each type works, you'll be able to figure out how to maximize some of the best cash rewards credit cards.

Flat-rate cash back cards

Flat-rate cash back cards earn the same rate on purchases, typically 1.5% or 2%. This type of cash rewards credit card is ideal if your spending is fairly balanced and you don't have any particular big spending categories among your everyday purchases.

Consumers who do the math often find that they'll earn the most with a flat-rate cash back card. If you're interested in getting one, the Wells Fargo Active Cash® Card is hard to beat. It can get you 2% cash rewards on purchases.

Bonus category cash back cards

A bonus category cash back card offers a higher cash back rate in one or more categories, such as groceries, dining, or gas.

Those who spend a lot in certain categories could collect more cash back with the right bonus category card. For example, the Blue Cash Preferred® Card from American Express earns an industry-leading 6% back at U.S. supermarkets for up to $6,000 per calendar year. Terms apply. That's an extremely valuable offer, even with the card's annual fee (see rates and fees). There are bonus category cards to fit just about everyone, whether you need the best credit cards for gas, dining, or a different category.

On eligible purchases outside of bonus categories, these cards have traditionally earned 1% back. But not all bonus category cards are like this anymore.

Rotating bonus category cash back cards

A rotating bonus category cash back card offers a higher cash back rate in a changing mix of categories. You typically get new bonus categories every quarter with this type of card. In most cases, cardholders must activate their bonus categories before or during the quarter to earn the bonus rate.

The advantages with these cash back credit cards are a very high cash back rate in bonus categories and the fact that you get new bonus categories regularly. But the latter can also be a downside, because you may occasionally get stuck with bonus categories that you won't spend much money in.

Two of the most popular rotating bonus category cards are the Discover it® Cash Back and the Chase Freedom Flex℠. Each offers 5% back on your first $1,500 spent in rotating bonus categories you activate every quarter. The Chase Freedom Flex℠ is unique in that it also offers several fixed bonus categories.

Highest cash back credit cards

Bonus categories are a popular feature with cash back credit cards. To provide more info on them, we're going to explain how some of the most common bonus categories work and the highest cash back credit card rates you'll find in each one.

Groceries: These cash back cards earn higher rates in merchants classified as grocery stores or supermarkets. This is a good time to clarify that bonus categories are based on the retailer, not the exact product you're buying. If you go to the grocery store and buy shampoo, paper towels, or any non-food items, it still counts as a grocery store purchase.

The best credit card for groceries offer cash back rates of up to 6% on supermarket purchases. Since this is one of the biggest spending categories for many consumers, a grocery cash back card can be a great choice.

Gas: These cash back cards earn higher rates at gas stations. They usually only offer bonus cash back at traditional gas stations, not gas stations tied to supermarkets or warehouse clubs.

Gas credit cards offer up to 4% on gas station purchases. Although they can be a good fit if you have a lengthy commute or a driving job, the typical consumer spends more in other areas, like groceries.

Dining: These credit cards earn higher rates at any type of restaurant, including fast food, sit-down dining establishments, and everything in between. That also covers deliveries and carryout orders with restaurants. Food delivery apps, such as DoorDash and Grubhub, may or may not qualify, so you'll need to check each card's terms to see.

Dining credit cards offer up to 4% on restaurant purchases. They work well if you're the type who prefers going out to eat and placing delivery orders over cooking at home.

Travel: These credit cards offer bonus cash back on either certain types of travel purchases or travel as a whole. If it's certain types of purchases, the card issuer will specify what qualifies, such as hotels or air travel. If it's travel as a whole, then anything the card issuer considers a travel category will qualify for bonus cash back.

The best credit cards that earn bonus rewards on travel spending are travel credit cards, not cash back cards. Among those travel cards, rewards rates can be as high as 10% on certain types of travel purchases. Some of the best cash back credit cards offer bonus rates as high as 5% on certain types of travel purchases.

Alternatives to consider

Cash back cards are great, but they aren't right for everyone. You may find that one of the following alternatives works better for you.

Travel rewards credit cards: Frequent travelers usually benefit the most from travel rewards credit cards. If you go on trips multiple times per year, the travel perks and rewards that these cards offer can be big moneysavers. They also almost always have no foreign transaction fee, a benefit many cash back cards lack. And some travel cards have no annual fees.

Balance transfer credit cards: You can stop paying interest on credit card debt with balance transfer credit cards. This type of card offers a 0% intro APR on balance transfers. There's almost always a balance transfer fee, but that's well worth it to pay down your debt at zero interest.

Student credit cards: If you're attending college, then a student credit card is a good way to get started on building your credit. While some of the best student credit cards offer cash back or other rewards, they're aimed at adults who don't have much credit history yet. You won't need good or excellent credit to get them like you would with many popular cash back cards.