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Cash back credit cards offer customers a percentage of purchases back on certain eligible purchases. Cash back options vary by credit card issuer; some offer a flat percentage on all purchases, while others offer higher cash back rates on purchases in some of the more popular spending categories (such as gas, groceries, etc.).

Some credit cards reward their customers with points for use in the same category. For example, a travel credit card rewards you with points that you can use to redeem for airport lounges, more miles, flights, hotel stays, and more, depending on how you choose to use your points. Cash back credit cards, on the other hand, give you a fixed cash value that you can redeem later for online purchases, bank statements, gift cards, and more.

Before you decide to use a credit card, there are a few things you need to know and consider. In this article, we’ll walk you through finding the best cash back credit card for your needs.

How does cashback work?

Credit cards that offer cash back mean that the card issuer provides the cardholder with a fixed percentage of cash value, and is rewarded for every qualifying purchase. So, for example, if a credit card offers 2% cash back, that means you get 2 cents back for every $1 you spend. Even if that doesn’t sound like a lot to you, every penny counts; that’s because your cash back rewards will keep accruing and multiplying, especially on your everyday spending card, your cash value will make a difference.

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Some credit cards offer more on certain types of purchases; for example, some offer 2% off general purchases and 3% off grocery purchases. Since grocery shopping is the most common form of shopping, you benefit the most from it. Assuming your card offers 3% cash back on every purchase at an eligible supermarket; if you spend $300 per month on groceries (or $3,600 per year), you’ll get $9 per month ($108 per year) s return.

Your cash back rewards will remain in your credit card account for as long as you wish until you decide to redeem them. If you decide to cash out, you can do so in a number of ways; many people prefer to exchange their cash back rewards for bank statements. This is especially useful because it can help you reduce the amount you owe on your credit card bill.

Some credit cards offer more options for redeeming cash back rewards; you may be able to redeem cash back for PayPal or Amazon purchases. It gets even better; in some cases, you can even ask to redeem your cash back rewards for gift cards or even mail a check.

What makes a cash back credit card a great choice for everyone is that your cash back rewards are likely to remain the same no matter how you redeem the cash value. On top of that, some credit card issuers offer higher cash back values ​​for certain redemption options.

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How to Earn and Use Cash Back

Earning and redeeming cash back depends on the card issuer and the type of card you choose. As mentioned, some credit cards offer cash back rewards in the form of a fixed percentage of all purchases; others offer higher cash back rates on some of the more popular purchases, including gas, groceries, food, travel, and more. The third offers a different rewards program; the cards rotate each quarter around their highest-earning cash-back category. Even better, some allow you to choose and change the bonus category to your liking; this allows you to choose the category that spends the most for more refunds.

So, if you want to understand how to earn cash back with a credit card, you must first understand your card issuer’s rewards system. This means you need to know if your card is a one-time cashback, bonus category or dynamic, and you can rotate categories or choose a bonus category. So you know how to make money.

Once you’ve built up a sufficient balance from your cash back rewards, you can use the money in a number of ways. One of the most common ways to use your cash back balance is to redeem it for online purchases, gift cards, or bank statements. Another good option you may find with some credit cards is to deposit your cash back balance directly into your bank account. You can also use the money to make charitable donations.

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In some cases, the issuer may allow you to use your cashback funds to book travel through their own online portal. As mentioned, you can sometimes use your PayPal or Amazon (or other online store) balance to pay for a portion of your purchase.

Therefore, before you get a credit card, you need to understand all the points redemption methods offered by the credit card issuer. In this way, you can choose the one that best suits your needs.

The best cash back credit cards

There are many cash back credit card options, so we’ve researched them to find the best ones and give you the answers to make your job easier.

American Express

American Express is the world’s largest credit card issuer. It offers credit cards and the amount of cash back you can earn is unlimited. They even offer a welcome bonus for new cashback cardholders to enjoy extra rewards in the first few months.

The best cashback card from American Express is The Blue Cash EveryDay® Card:

  • This card offers a promotional period with a 0% introductory interest rate on all purchases made within the first 15 months of account opening. After the promotional period, you will receive a continuously variable APR of 13.99% to 23.99%.
  • As an introductory bonus, you’ll also receive a $200 statement credit after you make $2,000 in purchases with your card within the first six months of account opening.
  • Earn 3% cash back when you spend up to $6,000 in U.S. supermarkets per year. After that, you will get 1% cash back.
  • Get 2% cash back at US gas stations and select department stores across the US.
  • Get 1% cash back on all other purchases.
  • There is no annual fee for this card.

Chase

Chase is the second largest credit card issuer offering general purpose credit cards; they offer an impressive range of cash back credit cards. Our top pick is the Chase Freedom Flex℠:

  • This card has a promotional period offer where you can earn 0% introductory APR on purchases and balance transfers for the first 15 months after account opening. Once the introductory period ends, any remaining balance on the Chase Freedom Flex Credit Card will be subject to a rolling variable APR of 14.99% to 23.74%.
  • Earn 5% cash back on purchases of up to $1,500 in bonus tiers, rotating quarterly.
  • 5% cash back on all travel expenses paid through Chase Ultimate Rewards.
  • Get 3% cash back on all U.S. restaurant and drugstore purchases.
  • Receive 1% Unlimited Cash Back on all other purchases.
  • In addition to all these general categories, you can also earn 5% cash back on boxed purchases that you can use on future purchases.
  • You’ll also get three months of free DoorDash DashPass and 50% off the next 9 months.
  • There is no annual fee for this card.

Citi

Citi is a good and well established credit card issuer and offers several cash back credit card options. Our top pick is the Citi® Double Cash Credit Card; here’s why:

  • This card offers an introductory offer of 0% APR on purchases and balance transfers for the first 18 months of account opening. Please note that all balance transfers must be completed within four months. After this 0% APR period, any remaining balance will be subject to a rolling variable APR of 13.99% to 23.99% depending on your creditworthiness.
  • Get 2% cash back on groceries, 1% on purchases and 1% on checkout.
  • Get 2% cash back at the gas station; 1% on purchases and 1% on payments.
  • You get the same 2% cash back structure on all other purchases.
  • To qualify for this card, you must have good credit (670 – 850).
  • There is no annual fee for this card.

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