1. What are the best cash back credit cards?

There are several great cash back credit cards currently available. These include:

1. Citi® Double Cash Card – Earn 2% cash back on all purchases (1% when you buy + 1% as you pay)

2. Blue Cash Preferred® Card from American Express – Earn 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming services, and 3% cash back at U.S. gas stations and transit

3. Chase Freedom Unlimited® – Earn unlimited 1.5% cash back on all purchases

4. Discover it® Cash Back – Earn 5% cash back on rotating categories each quarter (up to $1,500 per quarter) and 1% cash back on all other purchases

5. Capital One® Savor® Cash Rewards Credit Card – Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores, and 1% on all other purchases

2. How do I choose the best cash back credit card for me?

When choosing the best cash back credit card for you, consider your spending habits and goals.

Firstly, look at the rewards structure of each card to see which categories earn the most cash back. For example, if you spend a lot on groceries or dining out, a card that offers higher rewards in those categories would be beneficial.

Next, consider any sign-up bonuses offered by the cards, as these can provide a significant boost to your earnings.

Also consider any annual fees associated with the card and make sure that the rewards earned will outweigh these fees.

Lastly, choose a card from a reputable issuer with good customer service and benefits such as purchase protection or extended warranty coverage.

3. Can I have more than one cash back credit card?

Yes, you can have more than one cash back credit card. In fact, many people have multiple credit cards in order to maximize their rewards and take advantage of different perks offered by each card.

However, it is important to use the cards responsibly and not overspend in order to earn more cash back rewards. It may also be beneficial to keep track of your spending across all cards to ensure you are not exceeding your budget.

2. How do cash back credit cards work?

Cash back credit cards offer rewards in the form of cash back on purchases made with the card. The card issuer will typically offer a percentage of the amount spent as cash back, which can then be redeemed for statement credits, direct deposits into a bank account, or gift cards.

For example, if a cash back credit card offers 1% cash back and you spend $1,000 in a month, you would earn $10 in cash back rewards. Some cards may also offer higher percentages for specific categories such as gas, groceries, or dining.

Typically, the more you spend with the card, the more cash back you can earn. However, there may be limits on how much cash back you can earn in a certain period of time or on certain categories.

To receive the cash back rewards, you must use your credit card to make purchases. Once the statement cycle ends and your bill is paid, the cash back rewards will appear as a credit on your statement or will be available for redemption through the issuer’s website.

It is important to note that not all purchases may qualify for cash back rewards. Some transactions such as balance transfers or cash advances may not earn any rewards. Additionally, if you carry a balance on your card and incur interest charges, these charges will usually offset any cash back earned.

Overall, cash back credit cards can be a great way to earn rewards on everyday purchases and save money over time. However, it’s important to use them responsibly and pay off your balance in full each month to avoid any interest charges that could negate your rewards earnings.

3. What should I look for when comparing cash back credit cards?

1. Cash back percentage: The most important factor to consider is the percentage of cash back you will earn on your purchases. Different cards offer different percentages, so it’s important to compare this and choose one that offers the highest rate.

2. Rewards structure: Some cards may offer a flat rate for all purchases, while others may have different categories for earning cash back (e.g. higher rates for gas or grocery purchases). Consider which rewards structure would benefit you the most based on your spending habits.

3. Sign-up bonus: Many cash back credit cards offer sign-up bonuses, such as a lump sum of cash or extra points/miles when you spend a certain amount in the first few months. Be sure to compare these bonuses and consider if they are worth it for you.

4. Annual fees: Some cash back credit cards may charge an annual fee, so be sure to consider this cost when comparing different options. You’ll want to make sure that any potential earnings from the card outweigh the annual fee.

5. Redemption options: Find out how and when you can redeem your cash back rewards – whether it’s through statement credits, checks, gift cards, or other options. Also consider if there are any restrictions or expiration dates on using your rewards.

6. Credit score requirements: Some cash back credit cards may require a certain credit score range in order to be eligible for approval. Make sure you check this and apply for cards that align with your current credit standing.

7. Foreign transaction fees: If you plan on using your credit card while traveling internationally, consider the foreign transaction fees associated with each card – as well as if they have any partnerships with international banks to avoid these fees.

8. Additional benefits and perks: Many cash back cards also come with additional benefits such as travel insurance, purchase protection, extended warranties, and more. Consider these extra perks when comparing different options.

9. Customer service and cardholder reviews: It’s always a good idea to research the customer service ratings and read reviews from current cardholders to get a sense of their experience with the card. Look for any recurring issues or concerns before making your decision.

10. Your spending habits: Ultimately, the best cash back credit card for you will depend on your own spending habits and preferences – so be sure to consider which card aligns best with how you use your credit card.

4. What cash back rewards are available on cash back credit cards?

Cash back credit cards offer a variety of cash back rewards for cardholders. Some common cash back rewards include:

1. Flat-rate cash back: This is when the cardholder earns a fixed percentage of cash back on all purchases made with the card, typically ranging from 1-2%.

2. Tiered cash back: With this type of reward system, cardholders can earn higher rates of cash back in specific categories, such as gas stations or grocery stores.

3. Rotating category bonuses: Certain cash back credit cards may have rotating categories that change every quarter. These categories offer higher rates of cash back for a limited time, such as 5% at restaurants during one quarter and 5% at department stores the next.

4. Sign-up bonuses: Many cash back credit cards offer a sign-up bonus to new cardholders who meet a spending requirement within their first few months of opening an account.

5. Welcome offers: Some cash back credit cards also provide welcome offers, which may include features like bonus cash back for certain purchases or statement credits after reaching a spending threshold.

6. Online shopping portals: Some credit card issuers partner with online retailers to offer additional cash back rewards when using their card to make purchases through these merchants’ websites.

7. Referral bonuses: Cardholders can also earn extra cash back by referring friends or family members to apply for the same credit card.

The specific cashback rewards available will vary depending on the credit card issuer and the individual’s spending habits. It is essential to review the terms and conditions carefully before choosing a cashback credit card so that you can maximize your potential earnings.

5. How can I maximize my cash back earnings?

1. Use a cash back credit card: The most obvious way to maximize your cash back earnings is to use a credit card that offers cash back rewards. Look for cards that offer high cash back percentages on categories you frequently spend money on, such as groceries, gas, or dining.

2. Take advantage of sign-up bonuses: Many credit cards offer sign-up bonuses in the form of cash back. Make sure to take advantage of these offers by meeting the spending requirements and earning the bonus.

3. Use your card for everyday purchases: Use your cash back credit card for all your everyday purchases, such as groceries, gas, bills, and entertainment expenses. This will help you earn more cash back over time.

4. Optimize your spending with bonus categories: Some credit cards offer rotating bonus categories where you can earn higher cash back percentages on specific types of purchases during certain times of the year. Be sure to check which categories are eligible and plan your spending accordingly.

5. Pay off your balance in full each month: To avoid paying interest on your credit card balance, make sure to pay off your balance in full each month. Otherwise, any interest charges will negate the value of the cash back rewards you earned.

6. Utilize online shopping portals: Many credit cards offer additional cash back when you shop through their online shopping portals. Be sure to check if your card offers this feature and use it when making online purchases.

7. Refer friends and family: Some credit cards offer referral bonuses when you refer friends or family members who successfully apply for a new account. Take advantage of this opportunity to earn extra cash back.

8. Consider stacking rewards: You can maximize your savings by stacking different reward programs together. For example, you could use a store-specific loyalty program along with a credit card that offers cash back at that particular store for even more savings.

9. Keep track of rotating category calendars: If your credit card offers rotating bonus categories, make sure to keep track of the calendar to know when certain categories will earn you higher cash back percentages.

10. Use a cash back app: Consider using a cash back app that offers additional rewards on purchases made with your credit card. This can help you earn even more cash back on top of what you already earn from your credit card rewards program.

6. Does having a cash back credit card help my credit score?

Having a cash back credit card can potentially help your credit score in several ways:

1. Improving credit utilization: Credit utilization is the ratio of your credit card balance to your credit limit. A lower credit utilization is generally better for your credit score. By earning cash back rewards and paying off your balances, you may be able to keep your utilization low and improve your score.

2. Establishing a positive payment history: Paying off your cash back credit card on time every month shows responsible financial behavior and can help increase your credit score over time.

3. Increasing available credit: As you use your cash back card responsibly, the issuer may increase your credit limit, which can help improve your credit utilization ratio and boost your score.

However, it’s important to note that having a cash back credit card alone will not guarantee an improved credit score. Other factors such as timely payments, variety of types of credit accounts, and length of credit history also play a significant role in determining your score.

It’s important to use any type of credit responsibly and make timely payments in order to maintain or improve your overall credit health.

7. Are there any fees associated with a cash back credit card?

Yes, some cash back credit cards may have annual fees or foreign transaction fees. It’s important to read the terms and conditions of a cash back credit card before applying to understand any potential fees that may apply.

8. Can I earn cash back rewards for everyday purchases?

Yes, there are various credit cards and programs that offer cash back rewards for everyday purchases. These typically involve earning a percentage of the amount you spend on eligible items, which can then be redeemed for cash or used towards statement credits. Some examples of credit cards that offer cash back rewards include the Chase Freedom Unlimited, Capital One Quicksilver, and Discover it Cash Back. It’s important to compare different options and their terms and conditions to find the best fit for your spending habits and needs.

9. How do I redeem my cash back rewards?

The process for redeeming cash back rewards will vary depending on the credit card and issuer. Generally, you can redeem your cash back rewards through the following steps:

1. Log in to your online credit card account.
2. Look for the rewards section or tab.
3. Select “Cash Back” as your redemption option.
4. Choose how you want to receive your cash back (e.g. statement credit, check, direct deposit).
5. Enter the amount of cash back you want to redeem.
6. Confirm and submit your redemption.

Alternatively, some credit cards may allow you to redeem your cash back rewards over the phone or by mail. It’s best to review your credit card’s terms and conditions, or contact your credit card issuer directly for specific instructions on how to redeem your cash back rewards.

10. What are the best ways to use my cash back rewards?

1. Redeem for statement credit: You can apply your cash back rewards as a credit to your credit card statement, reducing the amount you owe.

2. Use towards purchases: Many credit card companies allow you to use your cash back rewards directly towards purchases, either online or in-store.

3. Apply towards travel expenses: If your credit card offers travel rewards and you have accumulated cash back, you can often use it to cover flight tickets, hotel stays, rental cars, and other travel expenses.

4. Donate to charity: Some credit cards offer the option to donate your cash back rewards to charitable organizations.

5. Buy gift certificates or e-gift cards: You can use your cash back rewards towards gift cards for popular retailers and restaurants, which can be a great way to save on future purchases.

6. Transfer to another account: Some credit card issuers allow you to transfer your cash back rewards to another account, such as a bank account or investment account.

7. Exchange for merchandise: If your credit card offers a rewards catalog, you may be able to trade in your cash back for merchandise such as electronics, household goods, or even experiences like concert tickets.

8. Pay off other debts: If you have multiple credit cards with balances, consider using your cash back rewards to pay down those balances and save money on interest payments.

9. Save for a rainy day: Instead of redeeming your cash back immediately, save it for unexpected expenses or build up an emergency fund.

10. Keep it as a statement credit against annual fees: If you have a credit card with an annual fee, you can use your cash back rewards as a statement credit towards that fee each year. This allows you to essentially offset the cost of the annual fee and get additional value from your rewards.

11. Does the amount of cash back I earn vary by credit card issuer?

Yes, different credit card issuers may offer varying rates of cash back for purchases made with their cards. Some issuers may also have different categories or spending limits for earning cash back. It’s important to review the terms and conditions of your specific credit card to understand the amount and rules for earning cash back.

12. Is a cash back credit card a good choice for me if I carry a balance?

Whether or not a cash back credit card is a good choice for you if you carry a balance depends on the individual details of your finances. Typically, cash back credit cards offer higher interest rates than other types of credit cards, so carrying a balance will mean paying more in interest charges. Therefore, if you have a history of carrying balances and accruing interest charges on your credit card, it may not be the best option for you.

However, if you are able to pay off your balance in full each month, then a cash back credit card could be beneficial because you can earn rewards on your purchases without paying any interest charges. Additionally, some cash back credit cards may offer 0% introductory APR periods for new cardholders, which could allow you to transfer existing balances and pay them off without accruing any additional interest.

Ultimately, it’s important to carefully consider your spending habits and ability to pay off your balance before deciding if a cash back credit card is the right choice for you if you carry a balance. It’s also wise to compare different types of credit cards and their terms in order to find one that fits your specific financial needs.

13. Do different types of purchases qualify for different levels of cash back rewards?

Yes, different types of purchases may qualify for different levels of cash back rewards depending on the credit card’s cash back program. For example, some cards may offer higher cash back percentages for gas and groceries compared to other types of purchases. It’s important to review the terms and conditions of your credit card’s rewards program to understand how your purchases will be rewarded.

14. How do rotating or limited-time offers work on cash back credit cards?

Rotating or limited-time offers on cash back credit cards typically work by offering special bonus rewards in specific categories or for a limited time period. For example, a credit card may offer 5% cash back on groceries for the first quarter of the year, then switch to offering 5% cash back on gas purchases in the second quarter. This allows cardholders to earn higher rewards in certain spending categories throughout the year. The specific details and terms of these offers may vary, so it is important for cardholders to regularly check their credit card’s website or email notifications for updates and current offers. Some credit cards may also require activation in order to receive the bonus cash back rewards.

15. Can my cash back rewards be used for travel expenses?

It depends on the credit card issuer and their redemption options. Some cash back rewards programs allow you to redeem your earnings for travel expenses, while others may only offer gift cards or statement credits. It’s important to check with your credit card issuer to see what options are available for redeeming your cash back rewards.

16. Do cash back rewards expire?

It depends on the specific rewards program and terms set by the credit card issuer. Some cash back rewards may expire after a certain amount of time, while others may not expire at all. It is important to check with your credit card issuer or read the terms and conditions of your rewards program to determine if your cash back rewards have an expiration date.

17. What are the tax implications of earning and redeeming cash back rewards?

Earning cash back rewards is typically considered income and may be subject to taxes. However, the amount of tax you owe on these rewards will depend on your individual tax situation and the specific rewards program you are enrolled in.

In most cases, if you earn more than $600 in cash back rewards from a single credit card issuer or bank in a year, you may receive a Form 1099-MISC from the issuer or bank at the end of the year. This form will report the total amount of cash back rewards you earned and may need to be reported on your tax return.

When redeeming cash back rewards for statement credits or other forms of payment, the value of the reward is generally not taxable. However, if you redeem your rewards for travel or merchandise that has a value higher than what you paid in cash back, the difference may be considered taxable income.

It’s important to keep track of your cash back rewards throughout the year and consult with a tax professional if you have questions about reporting them on your tax return.

18. Is there a minimum threshold for cashing in my rewards?

It depends on the rewards program you are participating in. Some programs may have a minimum threshold, such as requiring a certain number of points or a certain dollar amount before you can cash in your rewards. Others may not have a minimum threshold and allow you to redeem your rewards at any time. It is important to check the terms and conditions of your specific rewards program to determine if there is a minimum threshold for cashing in your rewards.

19. Are there any restrictions on earning or redeeming rewards with a cash back credit card?

Yes, there may be restrictions on earning or redeeming rewards with a cash back credit card. These can vary depending on the specific credit card and its terms and conditions. Some possible restrictions may include:

1. Minimum redemption amount: Some cash back credit cards may require you to accumulate a certain minimum amount of cash back before you can redeem it.

2. Expiration dates: Cash back rewards may have expiration dates, meaning you must redeem them before a certain date or they will no longer be available.

3. Specific categories or merchants: Certain credit cards may only offer cash back for specific categories or merchants, so the rewards cannot be earned or redeemed in other places.

4. Time limits: Some cash back rewards may have time limits for when they can be earned or redeemed, such as a limited-time offer or a limited timeframe to earn bonus cash back.

It’s important to carefully review the terms and conditions of your specific cash back credit card to understand any potential restrictions on earning and redeeming rewards.

20. Are there any other benefits to having a cash back credit card besides earning and redeeming rewards?

Yes, there are other benefits to having a cash back credit card, such as:

1. Cash back can act as a form of savings or extra disposable income: Instead of receiving rewards points or miles that may have restrictions or expiration dates, cash back can be easily redeemed and used towards everyday expenses.

2. No need to worry about travel restrictions: Unlike reward credit cards that offer points for airfare, hotels, or rental cars, cash back can be used for any type of purchase.

3. Some cash back credit cards offer 0% introductory APRs: This allows cardholders to make purchases without incurring interest charges for a certain period of time.

4. Cash back offers can help build credit: By using the card responsibly and paying off the balance each month, cardholders can improve their credit score over time.

5. Purchase protection and extended warranty coverage: Many cash back credit cards come with purchase protection that covers theft or damage to items bought with the card. Some also offer an extended warranty on eligible purchases.

6. Additional perks and benefits: Some cash back credit cards come with additional perks such as travel insurance, concierge services, access to airport lounges, and more.

7. No annual fees: While some reward credit cards come with annual fees, many cash back credit cards do not have this cost associated with them.

8. Easy redemption process: Cash back rewards are usually very straightforward and easy to redeem – often simply by requesting a statement credit or direct deposit into your bank account.