Are cash back credit cards worth it?

If you'd like to recoup some of your spending as money back into your pocket, then yes. It's also a good idea to look at other types of credit cards, such as travel rewards cards, to see if another card would be a better fit for you.

Is cash back better than reward points?

Cash back isn't better than rewards points, but it is easier to manage. With rewards points, you need to understand your redemption options and spend time figuring out the most valuable way to redeem those points. When you have a cash back card, there's not much you need to learn.

Best Cash Back Credit Cards: Top Rewards & Offers for March 2021

The best cash back credit cards can make your life incredibly easier. If you know how to make the most of your cash back credit card, you can lower your statement credit, take some pressure off your budget, or enjoy a little extra pocket change. Here we'll go over the many types of cash back cards and how to pick the best cash back offer for you. Get started with our picks for the top cash back credit cards below.

The Ascent's best cash back credit cards:

Bonus cash back and no annual fee: Discover it® Cash Back
Balance transfers: Citi® Double Cash Card – 18 month BT offer
Cash back versatility with a big bonus: Chase Freedom Flex℠
Unlimited cash back and 0% intro APR: Chase Freedom Unlimited®
Students: Discover it® Student Cash Back
U.S. supermarkets and gas: Blue Cash Preferred® Card from American Express
Bad credit: Discover it® Secured Credit Card
Cash back of your choice: Bank of America® Cash Rewards credit card
Restaurants and groceries: Capital One® Savor® Cash Rewards Credit Card
Bonus cash back program: U.S. Bank Cash+™ Visa Signature® Card

Ratings Methodology

Cash back credit cards can boost your bank account -- but only if you know how to use them. When you understand how these card work, you can maximize your rewards and dodge potential pitfalls of using these cards.

What is a cash back credit card?

A cash back credit card is a card that gives you a certain percentage of money back on your purchases. Some cash back cards will give you 1.5% back on all purchases. Others offer 5% back on purchases in certain categories, like groceries or gas.

Cash back cards differ in how you receive your cash back. You might be able to redeem it as a statement credit to cover purchases you've already made on your card, or some cards will even send you a check upon request.

How does a cash back credit card work?

The good news is that most cash back cards have a simpler type of rewards program, especially compared to some of the more complicated travel rewards cards. Here's how to use cash back credit cards:

Swipe your card: Use your credit card to pay for purchases, as with any card. Since some cards offer more cash back for some kinds of purchases, don't forget to use the card for purchases that give you the most money back.
Earn cash back: The credit card company automatically categorizes purchases and tallies the rewards you've earned. You'll see these in some variation of a rewards center or rewards bank on your online account.
Redeem your rewards: Your cash back will continue to pile up until you're ready to redeem it. The best cash back cards offer several ways to redeem your rewards -- a statement credit, a check, a bank account deposit, and so on.

Types of cash back credit cards

There are a lot of cash back cards available. Most fall into one of three categories. It helps to be familiar with these categories, so you can choose which works best for you.

Flat rate cash back

You earn the same percentage of cash back on all purchases, regardless of type or amount. This is the simplest type of cash back card.

Citi® Double Cash Card – 18 month BT offer: This is one of the best cash back cards because you'll get an even 2% cash back on everything. You'll get 1% cash back when you make a purchase, and then a second 1% cash back when you pay it off.
Capital One® Quicksilver® Cash Rewards Credit Card: Earn 1.5% cash back on every purchase, with a $150 bonus if you spend at least $500 within the first three months.
Chase Freedom Unlimited®: Earn 1.5% cash back on everything you buy, plus a bonus of $200 if you spend $500 in the first three months.

Bonus category cash back

You earn a slightly higher cash back rate on purchases in certain categories, like groceries, entertainment, or gas. You'll usually get a slightly smaller cash back rate on purchases that don't fit the bonus category.

Blue Cash Preferred® Card from American Express: This card offers 6% cash back on U.S. supermarket purchases (up to a $6,000 limit on purchases each year), 6% cash back on streaming services, 3% cash back on transit and at gas stations, and 1% cash back on everything else.
Wells Fargo Propel American Express® card: This card offers 3X points for spending at restaurants, gas stations, transit, streaming services, flights, hotels, car rentals, and homestays. Everything else earns 1X point per dollar spent. You'll also get a 20,000-point bonus if you spent at least $1,000 in the first three months.
Capital One® Savor® Cash Rewards Credit Card: Earn 4% cash back when you spend money on dining and entertainment, 3% cash back on grocery store purchases, and 1% cash back on everything else.

Rotating bonus category

These cards offer bonuses in new categories every quarter, but there's a catch: you usually have to "activate" a category before you start earning. Otherwise, you'll get the normal cash back rate for all purchases. If you're worried that your spending habits might change or you want a shot at earning even more rewards, try a rotating bonus category card. They're the credit cards with the highest cash back rewards for certain categories. Again, you trade these higher rewards in certain categories for a lower rate on other purchases.

Discover it® Cash Back: With this quintessential rotating bonus category card, you'll get up to 5% cash back on categories like restaurants and Paypal, Amazon, and Walmart. Its big sales point, though, is the cash back match at the end of your first year -- an effective rate of up to 10% on some purchases.
Chase Freedom: With this 5% cash back credit card, you can earn more in categories like gym memberships, grocery stores, and utility bills. You'll also get an easier-to-achieve bonus of $200 if you spend at least $500 in the first three months.

What credit card gives the most cash back?

The Citi® Double Cash card is the highest cash back credit card with a flat rate available today. Its name echoes what you get: 2% cash back on everything, after you've paid off your purchases (technically, you get 1% when you make a purchase, and 1% when you paid it off).

That doesn't necessarily mean you'll get the highest rewards overall with this card, however. If you instead choose a rotating bonus category card, you get 5% cash back -- but only on certain purchases at certain times.

We like the Discover it® Cash Back in particular because it offers a cash back match on everything in your first year. If you maxed out the rewards in the higher bonus categories (5% cash back on the first $1,500 of purchases in each quarterly category), you'd earn $300 from these purchases alone. At the end of your first year, you'd get a cash back match of another $300, for a total of $600 in rewards for $6,000 of spending. That's an effective cash back rate of 10% -- quite a reward!

How to pick the best cash back credit card

To pick the best cash back credit card, start by thinking about your spending habits and personal preferences. Are you more likely to earn rewards on groceries or eating out? Are you interested in rotating categories, or would you prefer a simple rewards system?

Sit down and think about what you want to get out of a cash back card. Create a short list of potential choices, and choose your best cash back card from there. Here are some things to consider:

Is there an annual fee? Cash back credit cards with no annual fee are more common, but some do charge a fee. Do the math to see if the rewards outweigh the price of the card.
Which categories do you spend in most frequently? Consider which categories you spend the most on. These might include groceries, streaming services, entertainment, gas, transit, utilities, restaurants, and others.
Do you want a simple or complex rewards program? You can earn the most cash back with a rotating category card, but these are also the most time-intensive to manage.
Does it come with a free FICO score? If you've got goals like buying a house or car, improving your credit score can be especially important. Many credit cards provide a free monthly score update.
Can you meet the minimum spending requirements to earn a bonus? Most cash back cards have a sign up bonus. However, you usually need to spend a certain amount, generally within the first three months. Make sure you're able to meet the spending requirements before you sign up.
Do you want to make a big purchase? Looking for a card that also has a 0% APR intro period on purchases can help save you money. That's especially true if you can pay off the charge before the intro period ends. Then, it's essentially an interest-free loan.
Do you want to pay off an existing balance? Similarly, a 0% APR intro offer on balance transfers can save you money by temporarily hitting the "pause" button on interest payments.

Cash back vs. points: What's the difference?

When you earn credit card rewards, they'll be tallied in one of two ways: as cash back, or as points. Cash back is the exact dollar amount you'll get when you redeem your rewards: If you have $25 in your rewards center, you'll get $25 cash back. Points can often pay for travel, gift cards, merchandise, and more. You can also usually redeem them for cash.

Points are a more flexible way to earn rewards because you can redeem them for different things. But that also makes it more complicated, because your points might be worth more or less depending on what you redeem them for.

TIP

How to maximize your cash back

If you're looking to max out the rewards you get, you can follow the strategy of the pros: pair a 5% cash back credit card like the Discover it® Cash Back with a 2% cash back credit card like the Citi® Double Cash card. That way you can use both cards, choosing the one that gives you the highest cash back rate at a particular merchant.

Best credit card cash back programs

Some credit card issuers have a standard rewards program in place across several cards, such as the Citi® ThankYou Points program. Other credit card companies don't have a standardized program, instead relying on the rules of each individual card. Here's what you can expect with each card issuer:

American Express

Most of American Express's rewards cards earn points through the Membership Rewards program. You can redeem points for flights, gift cards, hotels, and cash back. Your points are worth between $0.01 and $0.03 each, depending on the redemption method.

One important caveat here is that some of American Express's most popular cash back cards do not use the Membership Rewards program. The Blue Cash Preferred® Card from American Express and the Blue Cash Everyday® Card from American Express cards use a separate rewards program called Blue Cash Reward Dollars. These only allow you to redeem your rewards for cash.

Bank of America

Bank of America offers several credit cards. Only some of these earn cash back. It also offers a program called Preferred Rewards that allows you to boost your cash back earnings by 25% to 75%.

The catch with this program is that you need to meet some pretty onerous banking requirements, such as having a minimum of $20,000 across your Bank of America deposit accounts. And because its bank accounts aren't particularly great, it's probably not worth going out of your way to enroll in this program if you're happy with your current bank accounts.

You don't necessarily need to be a member of the Preferred Rewards program to earn cash back with Bank of America cards. But if you aren't, you won't earn the extra points boost.

Capital One

Capital One's rewards program is like an old, reliable truck. It's not flashy, but it's a workhorse that will get you where you need to go. Capital One doesn't have an official name or points system. Instead, each Capital One cash back card earns cash back within its own rewards center, and you can redeem these for cash as you wish.

Citi

Citi uses its own Citi ThankYou Points rewards program. You can redeem ThankYou points for cash back, gift cards, merchandise, travel, and more. Each ThankYou point is worth between $0.01 and $0.03. You'll get the most value when you redeem your points for travel instead of cash back.

Chase

Chase's Ultimate Rewards program is extremely popular among people looking for travel rewards. That's because your points can be worth up to $0.10 each if you transfer them to certain travel partners, and true travel rewards nerds spend a lot of time ferreting out these deals.

You can also redeem Ultimate Rewards points for cash back, gift cards, and other cash back credit card offers, although your points will be worth less ($0.01 each). Some cards, such as the Chase Freedom card, allow you to earn up to 5% cash back according to a pre-set quarterly cash back calendar.

Discover

Discover carries some of the most popular cash back cards today, though it doesn't have a predefined program. Each card has its own cash back center where you can see your rewards. The Discover it® Cash Back is its flagship cash back card, which also has a quarterly cash back calendar.

Wells Fargo

Wells Fargo is another issuer without a preset rewards program. Each credit card instead has its own rewards center.

Some Wells Fargo credit cards give you rewards directly in the form of cash back, such as the Wells Fargo Cash Wise Visa® card. Others, like the Wells Fargo Propel American Express® card, reward you with points you can redeem for travel, donations to charities, gift cards, and, yes -- cash.

Pros and cons of cash back credit cards

Pros

You can recover a good chunk of your spending

Cash back rewards are often simpler than other types of rewards

Most cash back cards don't charge an annual fee.

Cons

You may be tempted to overspend

Some cards have complicated rewards structures, or ask you to remember a long list of bonus categories.

Another type of rewards card might work better for you.

Is a cash back credit card right for you?

Cash back credit cards aren't right for everyone. Even though they sound great at first glance (and often are), it's a good idea to compare cards and consider whether another type of card might fit your needs better.

To find out if a cash back credit card is right for you, ask yourself these questions:

Do you want to travel? You can often make your rewards stretch farther with a travel rewards card.
Are you able to pay off your bill in full each month? If you can't pay off the full charges each month, cash back cards may not be right for you. The interest you'll pay will outweigh cash back.
Do you want a simpler rewards program? Many cash back credit cards are simpler to use than travel rewards cards. Some even allow you to set up your redemptions automatically.
Do you have credit card debt? Choosing a card with a 0% APR balance transfer offer might make more sense for you.

Alternatives to cash back credit cards

Even the best cash back credit cards might not be right for you. If that's the case, here are some other options that might interest you instead:

Bank account sign up bonuses: Many of the bigger banks offer hefty bonuses if you keep a certain amount of money in an account for a certain length of time. This can be a great way to earn cash. Remember to reassess whether it makes sense to keep your money in the account after you've earned the bonus.
Travel rewards credit cards: If you travel a lot (or you'd like to start), getting a travel rewards credit card might give you more valuable rewards. Many of the bonuses on the top travel rewards cards dwarf the bonuses you'll get with a cash back card.
Flexible points credit cards: Many cards -- even ones that we've included here as cash back cards -- reward you with points you can redeem for a variety of things, including cash back and travel. If you don't want to pin yourself down to earning one type of reward, this can be a great option.

Compare cash back credit cards

There are as many kinds of cash back credit cards as there are colors in the rainbow. Here are some of the best, along with what you can expect from them:

The Picks
Card	Rating	Great For
Discover it® Cash Back	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Bonus cash back and no annual fee
Citi® Double Cash Card – 18 month BT offer	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Balance transfers
Chase Freedom Flex℠	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Cash back versatility with a big bonus
Chase Freedom Unlimited®	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Unlimited cash back and 0% intro APR
Discover it® Student Cash Back	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Students
Blue Cash Preferred® Card from American Express	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: U.S. supermarkets and gas
Discover it® Secured Credit Card	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Bad credit
Bank of America® Cash Rewards credit card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Cash back of your choice
Capital One® Savor® Cash Rewards Credit Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Restaurants and groceries
U.S. Bank Cash+™ Visa Signature® Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Bonus cash back program

FAQs

A cash back credit card gives you a certain amount of cash back on every purchase. The percentage usually ranges from 1% to 5%, depending on what you buy.
If you'd like to recoup some of your spending as money back into your pocket, then yes. It's also a good idea to look at other types of credit cards, such as travel rewards cards, to see if another card would be a better fit for you.
Cash back isn't better than rewards points, but it is easier to manage. With rewards points, you need to understand your redemption options and spend time figuring out the most valuable way to redeem those points. When you have a cash back card, there's not much you need to learn.

Best Cash Back Credit Cards for March 2021