Despite what anyone says to the contrary, cash back credit cards really do let you earn “something for nothing.” If you’re able to use your card for regular monthly expenses and pay it off before interest is charged, you can earn anywhere from 1-5% back for every dollar you earn – and all with almost no effort on your part. Sounds like a pretty sweet deal, huh?
And it is. Thanks to some healthy competition within the cash back credit card space, the top cash back credit cards now offer better rewards and sweeter benefits than ever before. In addition to a huge signup bonus, you can score everything from travel perks to a free FICO score on your monthly statement if you sign up for the right card. Better yet, many of the top cash back credit cards don’t charge an annual fee.
If you want to earn cash back rewards as a percentage of your everyday spending, you’re in the right place. This guide was created to introduce you to the best cash back card offers currently available with the goal of helping you find the best card for your needs.
Best Cash Back Credit Cards of 2016
Before we get into all of the details, here’s our list of the top cash back cards for 2016:
- Chase Freedom®
- Chase Freedom Unlimited℠ Card
- Citi®Double Cash
- Discover it®– Double Cash Back your first year
- BankAmericard Cash Rewards™ Credit Card
- Blue Cash Preferred®Card from American Express
- Amex EveryDay® Credit Card from American Express
Chase Freedom®: Best Cash Back Rewards Program
The Chase Freedom® card has earned a reputation as the top cash back credit card for good reason. Not only does it offer 1% back on every dollar you spend, but it also doles out 5X points in categories that rotate every quarter. For 2016, the 5x bonus categories include gas and transportation (Q1), grocery stores (Q2), restaurants (Q3), and holiday shopping (Q4).
The Chase Freedom® card also offers a healthy signup bonus, which is not all that typical for a no-fee rewards card. And since the points you earn belong in the Chase Ultimate Rewards program, you can redeem them for gift cards or cash back, or use them to shop on Amazon.com.
All of these perks, plus the fact that the card doesn’t charge an annual fee, keep pushing it to the top of its class. If you don’t already have the Chase Freedom® card, it should be on your short list. Here are some additional details:
- No annual fee
- Earn $150 in cash back after spending $500 on purchases within the first three months
- Earn 5X points in categories that rotate every quarter plus 1 point per dollar spent on all other purchases
- 0% APR on purchases and balance transfers for the first 15 months – perfect if you’re carrying high interest debt (balance transfer fee applies)
Chase Freedom Unlimited℠ Card: A Different Way to Earn Points with Chase
If you love the benefits of the Chase Freedom® card but not necessarily the way it doles out points, you might want to give the Chase Freedom Unlimited℠ Card some serious thought. With this card, you’ll earn an unlimited 1.5 points for every dollar you spend – and with no annual fee to boot!
Since the points you earn belong in the Chase Ultimate Rewards program, you can redeem them for gift cards or cash back, or use them to shop on Amazon.com. Either way, getting 1.5 points per dollar spent on every purchase is pretty sweet when no annual fee is involved. And if you hate to keep track of rotating categories, this card is a definite contender.
- Earn a $150 signup bonus after you spend just $500 on your card within 90 days
- Add an authorized user who also makes a purchase during the first 90 days and earn another $25 back
- No annual fee
Citi® Double Cash: Earn a Flat 2% On Everything
If you don’t like keeping track of category spending or special promotional periods, the Citi® Double Cash card might be the perfect alternative for your wallet. With this card, you’ll earn 2% cash back on all of your purchases – 1% when you make a charge and another 1% when you pay it off.
This streamlined rewards effort makes it easy to keep track of or figure out how many points you might earn during any given month. And you can earn the full 2% back without worrying about caps, limits, or category restrictions.
The Citi® Double Cash card has surged in popularity since it was introduced in 2015, and the awesome rewards are the reason behind its ongoing popularity. If you want to know more, read through these important details:
- Earn 2% cash back on everything – 1% when you make a purchase and another 1% when you pay it off
- No caps, limits, or category restrictions
- 0% APR on purchases and balance transfers for the first 15 months – perfect if you’re carrying high interest debt (balance transfer fee applies)
Discover it® – Double CashBack your first year
Similar to the Chase Freedom® card, the Discover it® card offers 1 point per dollar spent on all purchases plus 5X points in categories that rotate every quarter. The big difference, however, is that the Discover it® card is offering double cash back your first year for a limited time.
If you manage to earn 20,000 points worth $200 your first year, Discover will double that bonus to $400 after 12 months. That’s a pretty sweet deal considering the fact that rewards are so easy to earn and this card comes with no annual fee!
Another perk that sets this card apart is its generous terms for balance transfers. The current offer lets you transfer a balance and enjoy 0% APR for 18 full months, although a 3% balance transfer fee does apply.
Whether you want to earn a ton of cash back, transfer a balance, or both, the Discover it® card can help you make it happen.
- No annual fee
- Earn 1X points on all purchases and 5X points in categories that rotate every quarter
- Double cash back after your first year
- 0% APR on balance transfers for 18 months (balance transfer fee applies)
BankAmericard Cash Rewards™ Credit Card: Low Minimum Spending Requirement
The BankAmericard Cash Rewards™ Credit Card offers a sweet signup bonus and a user-friendly rewards program that is easy to understand. With this card, you’ll earn a $100 cash bonus after spending just $500 within 90 days! That’s why this card is perfect for someone who doesn’t spend a lot on credit, yet still wants to earn a signup bonus.
When it comes to ongoing rewards, the BankAmericard Cash Rewards™ Credit Card isn’t lacking in that regard either. With this card, you’ll earn 3% on gas and 2% on groceries up to a combined $1,500 in grocery/gas purchases each year, plus 1% back on all other purchases.
Your rewards will never expire and there are no rotating categories to keep track of. And when you’re ready to redeem your rewards, you can take them in the form of a statement credit or as a direct deposit into your Bank of America checking or saving account. It’s as simple as that.
- Read here to learn more about the BankAmericard Cash Rewards™ Credit Card
- No annual fee
- Earn 3% on gas and 2% on groceries up to a combined $1,500 in grocery/gas purchases each year, plus 1% back on all other purchases
- 0% Introductory APR for 12 billing cycles for purchases AND for any balance transfers made in the first 60 days (balance transfer fee applies)
Blue Cash Preferred® Card from American Express: 6% Cash Back at Grocery Stores
The Blue Cash Preferred® Card from American Express is ideal for families who want to earn exceptional rewards on their everyday spending. With this card, you’ll earn 6% cash back at U.S. supermarkets up to $6,000 per year, 3% U.S. gas stations & select U.S. department stores, and 1% cash back on all other purchases.
Even better, the Blue Cash Preferred® Card from American Express offers a $150 signup bonus after you spend just $1,000 on the card within the first three months. That’s more than enough to make up for the $75 annual fee this card charges, and is really just icing on the cake when you consider the long-term benefits. If you took advantage of just the grocery benefit, for example, and put $6,000 in grocery spending on your card annually, you would earn 36,000 points worth $360!
Here are some more details on the rewards and perks:
- Earn a $150 statement credit after you spend $1,000 on the card within 3 months
- Earn 6% cash back on first $6,000 in grocery spending each year, plus 3% back at gas stations and select department stores and 1% on all other purchases
- Great for balance transfers! 0% intro APR on purchases and balance transfers for 15 months (balance transfer fee applies)
Amex EveryDay® Credit Card from American Express: No Fee, Sweet Signup Bonus
The Amex EveryDay® Credit Card from American Express offers the potential for sweet rewards and no annual fee. With this card, you’ll earn 2x points at U.S. supermarkets on your first $6,000 in purchases, plus 1x points on everything else. Plus, you’ll get 20% extra points when you use your card for 20 or more purchases each billing period.
Although this card comes without an annual fee, it does offer a 10,000 point signup bonus after you use your card for just $3,000 in purchases within 90 days. And once you begin racking up the rewards, you can use them to pay for all or part of your flight, hotel stays, or vacations and cruises booked in advance. This is particularly tempting if you need the best airline rewards credit card for your personal or business travel, you could fly for free once you have racked up so many rewards.
- No annual fee
- Earn 10,000 Membership Rewards points after you spend just $1,000 on your card within the first three months
- Earn 2x points at U.S. supermarkets on your first $6,000 in purchases, plus 1x points on everything else
- Earn 20% extra points when you use your card for 20 or more purchases each billing period.
Rules for Maximizing Cashback Credit Cards without Going into Debt
A lot of people worry how pursuing rewards might affect their spending, and they’re right to do so. With average household credit card debt coming in well over $15,000 in 2015, it’s easy to imagine how many people used credit with good intentions but would up in debt nonetheless.
To secure the perks of a cash back card without going into debt, you need to be as intentional as you possibly can. For most people, that means using their cash back card with a plan in mind – and only with a plan.
If you want to earn more cash back than you normally would, but with minimal risk, this list of rules for cash back cards can help:
Rule #1: Use your cash back card for all of your everyday expenses, but as part of a comprehensive spending plan.
The best way to maximize the amount of cash back you earn is to use your cash back card for as many expenses as you can. While that definitely means using your card for big expenses, it also means using your card for all of your everyday spending as well. Grocery spending, utility bills, gas, and supplies for work can add up fast and help boost the amount of cash back you earn if you get in the habit of using your card regularly.
If you’re using a monthly budget, or using your card as a business credit card, your cash back credit card can actually be a valuable budgeting tool. By signing into your online account management, you can see and track all purchases in the categories you spend the most. If you have limits on certain budget categories, you can stay on track by monitoring your credit card spending online.
You should also use this tracking to see which categories you spend the most in. For instance, if you are a frequent traveler, you may find that switching to a travel rewards credit card gives you the best bang for your buck. The same would go if you spent the largest amount on gasoline or groceries. Keeping track of your spending will help you have a better budget and make sure you get the most rewards possible.
Rule #2: Only charge what you can afford to pay back.
When you’re in pursuit of cash back, the last thing you want is a balance you can’t afford to repay. This is where the “budget” part of your plan comes into play. If you didn’t budget for an expense, you shouldn’t buy it…let alone use your cash back credit card to charge it!
To maximize cash back without getting into trouble, only use your card for regular planned expenses and bills you need to pay anyway. When you only charge what you can afford to pay back right away, you’ll be in the best position to earn cash back without spiraling into debt.
If you are using one of these cards as a 0% balance transfer card, make sure to pay of that balance as fast as you can. You do not want to be accruing massive amounts interest, since that defeats the whole purpose of having a rewards card.
In fact, you should not be pursuing any sort of cash back rewards until you get your previous debt under control. You are only going to get 1%-3% of your spending back while credit card interest can peak at over 30%.
Rule #3 Always pay your bill in-full and on time.
When you take a look at how your FICO credit score is determined, you’ll see that 35 percent of your score is made up by your payment history. If you have been late on your bills in the past, your score will likely reflect that. Likewise, paying all of your bills on time is one of the best ways to boost your FICO score over time.
If you want to qualify for the best cash back offers, having an excellent credit score is crucial. With that in mind, you should pay all of your bills in-full and on time, and with no exception. The health of your credit is too important to do anything else.
Hidden Benefits Your Cash Back Card Might Offer
Your new cash back credit card will make it easy to earn points on everything you buy, but that’s not all. In addition to the obvious rewards you’ll earn every day, most cash back cards offer other benefits that can help you in a bind – or help you keep your credit in tip top shape.
While these “hidden” benefits aren’t as touted, they can be extremely valuable nonetheless. Want to know more? Here are a few of the benefits your rewards or cash back card probably offers:
Hidden Perk #1: Extended Returns
Did you know that some credit cards facilitate returns on items stores don’t want to take back? The Discover it® card, for example, offers a “return guarantee” that can score you a refund of up to $500 on eligible items if the original store won’t accept your return with a receipt within 90 days.
This perk can come in handy if you frequently buy at stores with horrid return policies (Think: Best Buy, with its 15-day returns), and provide peace of mind when you buy an expensive product nearly anywhere else. To take advantage of this perk, you’ll need to keep your receipt and file your claim per your specific card’s rules. If you don’t know what they are, just ask!
Hidden Perk #2: Purchase Protection
Some cash back cards like the Discover it® card also offer purchase protection on eligible items. With this coverage, Discover will repair or replace damage or stolen items (up to $500) if the event takes place within 90 days of your purchase.
Having purchase protection can be huge if you buy a new cell phone and it breaks right away, or if your brand new laptop has an issue and the store won’t take it back. Once again, you need to keep your receipt to take advantage of this benefit.
Hidden Perk #3: Zero Liability Protection
Almost all cash back cards, including the Chase Freedom Unlimited℠ Card, offer zero fraud liability. What this means is, you won’t be on the hook for fraudulent purchases if a thief steals your card or card number and makes any type of charge.
To take advantage of this protection, you’ll want to report any fraudulent charges right away. Start by calling the number on the back of your card and filing a claim. Most of the time, your card issuer will cancel your current credit card account and send out a new card with a new number.
Hidden Perk #4: Auto Rental Collision Damage Waiver
Although primary auto rental coverage is only offered by the top travel credit cards on the market, a few cash back cards, including the Chase Freedom Unlimited℠ Card offer the next best thing – Auto Rental Collision Damage Waiver coverage.
With this coverage, Chase says you can “decline the rental company’s collision insurance and charge the entire rental cost to your card.” In the U.S., this coverage is secondary to your private auto insurance.
Hidden Perk #5: Fraud Alerts
The Chase Freedom Unlimited℠ Card also offers fraud alerts that can let you know if any suspicious activity posts to your account. This perk lets you monitor purchases made on your card, both by yourself and any authorized users. Plus, you’ll get an email or text if any strange or unusual purchases are made with your card.
To use this benefit, you’ll need to sign up and enter an accurate telephone number and email address. With the right information on file, Chase can contact you right away if something pops up.
Hidden Perk #6: Extended Warranties
Some cash back cards take their benefits a step further by offering free extended warranties on qualifying products. With the Discover it® card, for example, you’ll get an extension on existing eligible warranties of up to one additional year on warranties of 36 months or less.
This type of coverage can be crucial when you make a large purchase such as an appliance or new computer. With an extended warranty, you’ll have your purchase replaced if it dies just outside of the standard manufacturer’s warranty.
Hidden Perk #7: Free FICO Scores
With a card like the Discover it® card, you’ll have access to your FICO score at any time. Simply log into your account to see an estimate of your score, any recent inquiries on your credit report, and a general analysis of your credit health.
If you’re monitoring your credit in an effort to improve it, keeping track of your FICO score is definitely a smart move. Simply check in with your score a few times per year to keep track of your progress. And as a cardholder, you can do this for free.
How to Choose the Right Cash Back Card
With so many different cards to choose from, narrowing down your list can be a stressful endeavor. To find the right card for your needs, consider these tips:
Figure out your spending style.
To maximize the points you’ll earn, you need to figure out your spending style. Some people spend so much in certain categories they would benefit the most from cards that offer “bonus points” in that area, whereas others spend on everything and might be better off with a card that offers a fixed rate of rewards.
If you spend a lot on groceries, for example, it’s hard to beat the 6% back at grocery stores offered by the Blue Cash Preferred®Card from American Express. But if your spending is all over the place, pick a card that offers a higher rate across the board and no matter what you buy.
Decide if you want fixed-value rewards or a card with “bonus categories.”
Where some cards like the Chase Freedom Unlimited℠ Card offer a flat rewards rate on all purchases (in this case, 1.5%), other cards like the Discover it® card offer 1% back on all purchases, then an additional 5% back on your first $1,500 spent in categories that rotate every quarter.
While some people like earning a flat rate of cash back, others live for the bonus categories that let them earn up to 5%. There’s no wrong or right answer here, but it pays to get a card that lets you maximize rewards in respect to how you spend money each month.
Make sure your card has the right perks.
Remember how some cash back cards have hidden perks that hardly anyone knows about? It’s important to research which perks each card offers before you sign up. Why? Because some cards offer them all, while others just offer a few.
To find out which benefits you can get with each of the top cash back cards, spend some time reading this guide and each individual credit card review. If you need more information, click on “apply now” anywhere on this page, find the card you’re interested in, then read through every word of the fine print. The benefits each card offers are in there, but it’s up to you to find them.
Understand and compare rewards programs.
The right cash back card for each individual depends on more than their average spending; it also depends on the type of rewards they like. Make sure you understand your new card’s rewards program and how you can redeem your points before you sign up.
Where some cards let you redeem your points for cash back only, others offer additional options such as gift cards and purchases made through Amazon.com. Make sure the card you’re after offers rewards you actually value and can see yourself using. Otherwise, you’re just wasting your time.
Consider pairing more than one card if you can’t decide.
If you are having trouble deciding between two really good cash back cards, don’t be afraid to sign up for both. Provided neither card charges an annual fee, you can utilize the benefits of more than one card without any consequences.
A lot of people will pair a card that earns a fixed rate of rewards with a card like the Discover it® card that offers special “bonus categories” every quarter. With both cards, they can use the higher earning card for everyday expenses and the card with 5% bonus categories when it makes sense.
The Bottom Line
Cash back credit cards are a no-brainer if you want to earn rewards on your everyday purchases like groceries, gas, and utility bills. And if you’re spending plenty of money on credit regularly anyway, it would be a shame not to get 1-5% of your money back.
Research all of the top cards on this page before making a final decision. Meanwhile, you should also check out our other credit card guides for useful information and tips on the top credit cards for travel, business, and balance transfers.