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Some of the below offers are no longer available. Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.The Chase Freedom® is not currently available to new cardholders. Please visit our list of the best cash-back cards for alternative options.
Cash-back credit cards are one of the most popular types of rewards cards. Cardholders earn a percentage of their spending back, which can be used to offset your balance. If a card offers 2% cash back and you spend $100, you'll receive $2 back.
Cash-back cards offer a minimum of 1% cash back on all purchases, with some cards offering up to 6% cash back in select categories. In some cases, there are even limited-time offers where cardholders can earn even more cash back. For instance, Capital One Savor Cash Rewards Credit Card offers 8% cash back on tickets purchased through Vivid Seats through January 2023.
These cards are a great choice for people who don't want to deal with the sometimes confusing points or miles rewards cards.
Below, CNBC Select breaks down the different types of cash-back cards and how you can redeem cash back.
Types of cash-back cards
Cash-back cards can be broken up into three main categories: flat-rate, bonus category and rotating category. Here's how each type works.
1. Flat-rate
Some cash-back cards offer the same amount of cash back on every purchase. The best flat-rate cash-back cards earn you at least 2% cash back on all purchases, with some cards offering up to 2.5%, such as the Alliant Cashback Visa® Signature Credit Card which offers 2.5% cash back on your first $10,000 of qualifying eligible purchases (1.5% for purchases over $10,000). (The Alliant Cashback Visa® Signature Card is no longer available to new applicants.)
These cards are great for consumers looking for a simple cash-back program that requires minimal effort to reap great rewards. The Citi Double Cash® Card, which offers 2% cash back on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases and charges no annual fee. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel, which makes CNBC Select's list of the best cash-back cards. (see rates and fees.)
2. Bonus categories
Many cash-back cards offer bonus cash back in certain categories, such as grocery stores, travel, gas stations and entertainment. Sometimes cash back in the bonus categories is limited to a certain amount of spending each year, but it can also be unlimited.
The Blue Cash Preferred® Card from American Express gives cardholders 6% cash back* at U.S. supermarkets on up to $6,000 per year in eligible purchases (then 1%), 6% cash back* on select U.S. streaming subscriptions, 3% cash back* on transit and at eligible U.S. gas stations and 1% cash back* on other purchases. There is $0 intro annual fee for the first year, then $95 (see rates and fees). Terms apply.
3. Rotating categories
Other cash-back cards offer 5% cash back in select categories that rotate throughout the year (typically changing each quarter). Common categories include restaurants, gas stations and grocery stores. These cards are popular among consumers looking to maximize rewards.
The Discover it® Cash Back and Chase Freedom® both offer 5% cash back in rotating categories on up to $1,500 in combined quarterly purchases after you activate the bonus every quarter. After you reach the limit, it's 1% on all purchases.
How to redeem cash back
Cash-back cards usually only provide a few redemption options. Some cards allow you to redeem cash back at any amount, while others require you to reach a minimum amount, typically $25. Here are the most common ways you can redeem cash back.
- Statement credit: Apply cash back as a credit to your account balance. This helps offset the cost of your bill. However, you still need to make the minimum payment toward your balance.
- Direct deposit or check: You can often transfer cash back to a linked bank account or request a paper check.
- Gift cards: Some cash-back cards may allow you to redeem cash back for various gift cards.
*Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
Information about the Chase Freedom® and Alliant Cashback Visa® Signature Card has been collected independently by Select and has not been reviewed or provided by the issuer of the cards prior to publication.
For rates and fees of the Blue Cash Preferred® Card from American Express, click here.
For rates and fees of the Discover it® Cash Back, click here.
