Where can I get cash back on my credit card?
Since cards with rotating bonus categories have announced their selections for the rest of the year, fall is the perfect time to come up with a rewards strategy. Here are a few tips to consider as you look for ways to rack up as many rewards as you can before 2017 is over:
- Max out your bonus categories if your card offers them. With the Chase Freedom® card, for example, you’ll earn 5 points per dollar on categories that rotate every quarter. By taking note of those categories, you can use your cards strategically and earn more points over time.
- Decide whether you want 5% back in rotating categories or a higher rate across the board. While 5% in certain categories is nice, cards that offer this perk dole out just 1% back on your regular purchases. In that respect, a card that offers a flat 1.5% back on all of your spending might help you earn more over time.
- Sign up for a new card for the signup bonus. Even if you’re already happy with your rewards credit card, it doesn’t hurt to have an additional choice. Most of the cards on this page offer a nice signup bonus for new cardholders.
How do I use my cash back credit card?
Cash back cards offer great rewards potential, but not if you’re constantly paying interest on an outstanding balance. Here are two rules that you should follow to maximize your rewards, avoid accruing interest, and stay focused on your financial goals:
Rule 1: Track your credit spending in real-time
The best way to keep up with your spending is to sign up for online account management with your credit card company. Then use your login and password to check in with your spending at least once per week. Staying on top of your spending this way can benefit you by helping you stay on budget and forcing you to recognize any problem spending areas you may have.
Rule 2: Pay your bill before it is due (or several times per month)
At the very least, you should always pay your credit card off at least once before it is due. Letting your account balance grow over the month without paying it off can cause you to disassociate your spending from actual money you have, whereas paying it off a few times per month causes you to part from your dollars and feel the impact right away.
Can I get my interest rate lowered on my credit card?
Most people assume that their interest rate is written in stone. It isn’t. A survey of 952 American cardholders discovered that 69% of people who called their issuer to ask for a lower interest rate were successful. What’s more, 82% of people who asked to waive or reduce annual fees got their wish too.
The best chance you have at a lower interest rate is to call your credit card issuer and ask for it. Dig around before you call and see if there are better offers from other lenders that you can use as leverage. Don’t be bossy or rude, and don’t give up. If you get a “no” the first time, ask to speak to a manager.
Here’s a script that you can use to get started:
“Hello, my name is [name]. I’ve been a customer since [year], and I’m interested in securing a lower interest rate. I’ve recently been offered a new credit card with [competing credit card company]. It has a similar structure to yours, but the interest rate is [interest rate]. I’d like to continue being a loyal customer. Can you match that offer?”
Research the best cash back credit cards
Use our directory to find the cash back card that benefits you the most:
Sign up Bonus Tier Level
Good Signup Bonus
Great Ongoing Rewards
No Annual Fee
No APR for 12+ Months
The most heavily weighted (and most important) elements of a cash back credit card are introductory APR, sign-up bonus, ongoing rewards, and benefits. Depending on your situation, you might want to be aware of the ongoing APR as well.
There are a number of factors that went into rating each card, including:
- Rewards categories
- Signup bonus
- Intro APR
- Ongoing APR
How does a cash back credit card work?
The best cards have unique structures to their rewards programs. Generally speaking, they offer the highest rewards percentages of any credit cards for specific or rotating categories. Due to the high rewards earning potential, these cards often come with caps on the amount you can earn in some of those categories.
- Cash back credit cards are the best second cards to own.
- Rewards are very high, but have caps.
- Be sure to maximize your categories each quarter or year.
- Minimize your spending in 1% categories.
You can earn cash back in several ways
Some cards earn flat-rate rewards — you get the same cash back percentage no matter what you purchase. For example, the Capital One® Quicksilver® Cash Rewards Credit Card earns 1.5% cash back for every dollar you spend. There aren’t any categories to worry about, and there’s no limit on how much you can earn. Other cards offer different rates of cash back for different purchase categories. Take the Blue Cash Preferred® Card from American Express, for instance. It earns a super-high rate of 6% cash back at U.S. supermarkets, but that rate drops down to 1% if you spend more than $6,000 annually in that category. Other categories like U.S. gas stations and U.S. departments stores earn unlimited 3% cash back.
How do I redeem cash back?
Redemption options vary from card to card, but here are the most common methods for redeeming rewards:
- Bank Deposit. All the cash back that you earn goes straight into a checking or savings account.
- Statement Credit. This form of cash back is only applied to your credit card balance — you can’t spend it anywhere else.
- Gift Cards. Some credit cards offer cash back in the form of physical gift cards or eCertificates for popular retailers and merchants.
- Charitable Donations. Other cards offer you the opportunity to donate your earnings to charities and disaster relief programs.
What type of cash back card do I need?
All the top credit cards on our list use one of two rewards systems: rotating rewards categories or designated rewards categories. To determine which one offers the most earning potential, you need to evaluate your spending in a variety of common categories.
Maximizing each cash back category
Creating a single fixed scenario to judge these cards is next to impossible. Instead, let’s look at each card at a category level to examine the return you could get from the rewards program. The table below shows an overview of the best type of cash back card to get for each of the various purchases you might make.
|Type of purchase||Best cash back card type|
|Groceries||Designated category card|
|Gas (less than $6,000/year)||Rotating category card|
|Gas (more than $6,000/year)||Designated category card|
|Shopping||Rotating category card|
|Dining and entertainment||Rotating category card|
|Variety of purchases||Rotating category card|
|Household purchases||Designated category card|
A real-life spending scenario
Consider this: The Blue Cash Preferred® Card from American Express is one of the best choices for big-time shoppers because it offers a designated 6% rewards category for U.S. supermarkets (groceries) on up to $6,000 per year. It’s also a top card for U.S gas station purchases, as there is no cap on the 3% you can earn.
If you were to consistently spend $10,000 in purchases per year with the Blue Cash Preferred® Card from American Express in the card’s two best rewards categories ($6,000 on groceries and $4,000 on gas) without spending anything at the standard 1% rate, your four-year earnings would look something like this:
Blue Cash Preferred® Card from American Express
|1 Year||2 Years||3 Years||4 Years|
With a rotating category card — even one that doesn’t have an annual fee — the earning potential is much lower for this spending arrangement because you’d probably only earn high-rate rewards on groceries for one quarter of the year.
Here are the best cash back credit cards
- Discover it® – Cashback Match™: Best overall
- Blue Cash Preferred® Card from American Express: Best for families
- Bank of America® Cash Rewards Credit Card: Great for Bank of America customers
- Capital One® Quicksilver® Cash Rewards Credit Card: Best for fixed-rate cash back
- Chase Freedom®: High-reward bonus categories
- Chase Freedom Unlimited®: Best 0% intro APR
- Capital One® QuicksilverOne® Cash Rewards Credit Card: Best for average credit