In the ChooseFI community, we talk a lot about the benefits of travel rewards cards and how they can help you travel for almost nothing. While travel rewards cards are an incredible tool, they don’t matter too much to folks who don’t travel.
That’s why cashback credit cards are just as important. They offer cashback on your most common purchases and, when used responsibly, can earn you extra cash. You can then use that extra cash to keep up with your FI goals.
Types Of Cash Back Credit Cards
When it comes to cash back credit cards, there are two primary types: rotating category cards and general cashback.
Rotating Category Cards
Rotating cash back credit cards offer extra cashback on categories that rotate quarterly.
For example, one of the cards we’re going to discuss is the Chase Freedom Flex℠. This card offers 5% on categories that change every three months.
Important Note: The information for the Chase Freedom Flex℠ has been collected independently by ChooseFI. The product details on this page have not been reviewed or provided by the bank advertiser.
The types of merchants usually included in these rotating 5% categories are:
- Gas
- Groceries
- Car Rentals
- Entertainment
- Home improvement
- Amazon
General Cash Back Cards
General cash back credit cards offer one cashback rate, making them simple and easy to use.
One example below is the Capital One QuicksilverOne Cash Rewards Credit Card. It offers 1.5% cashback on all purchases, with no limitations. This might not be as high of a redemption value as a travel redemption, but the convenience of cash that you can use for anything is sometimes hard to beat.
ChooseFI’s Top Picks for Best Cash Back Cards
Chase Freedom Flex℠
The Chase Freedom Flex℠ is my personal favorite cash back card. The 5% rotating rewards category is a generous cash back offer, and we’ve found Chase’s redemption options to be the best.
Important Note: The information for the Chase Freedom Flex℠ has been collected independently by ChooseFI. The product details on this page have not been reviewed or provided by the bank advertiser.
Rewards
As we mentioned above, Chase Freedom Flex℠ offers 5% on quarterly rotating categories. For example, for the second quarter of 2022 (April – June 2022) was 5% back at Amazon.com and select streaming services.
The 5% category is capped at $1,500 for each quarter, and you’ll need to remember to activate your card online each quarter.
In addition to the rotating categories, you’ll earn 3% on restaurants, including takeout, eligible delivery services and drugstore purchases. For all other purchases, you still earn a solid 1% cash back. The 5%, 3%, and 1% cash back rewards won’t expire as long as you keep your account open.
Other Features
There’s a lot to love about Chase Freedom Flex℠ . Not only are the rewards generous, but Chase offers a decent cash bonus of $200 when you sign up. However, you’ll need to spend $500 in your first three months. That’s not the best sign-up bonus out there, but it has a low minimum spend.
One of the best perks of Chase Freedom Flex℠ is the fact that it has no annual fee! We’re big fans of no annual fees since they often eat into rewards.
Who It’s Best For
The Chase Freedom Flex℠ is a simple cash back card, and we’d recommend it as anyone’s first cash back card.
The only thing holding it back from being a higher-end card is the fact that you can find the better sign-up bonuses with the other cards mentioned below.
Capital One QuicksilverOne Cash Rewards Credit Card
The Capital One QuicksilverOne Cash Rewards Credit Card is best for those looking for a straightforward card that doesn’t involve activating quarterly categories or paying a high annual fee.
Rewards
The Capital One QuicksilverOne Cash Rewards Credit Card offers 1.5 % Cash Back on every purchase, every day. 5 % Cash Back on hotels and rental cars booked through Capital One Travel (terms apply). It doesn’t get much simpler than that.
You can redeem your rewards for cash, gift cards, or apply them to your purchases.
Other Features
One of the perks of this card is those with average credit can qualify for it. Another perk is the low annual fee; you’ll pay just $39 a year!
Who It’s For
This card is a great card for beginners. If you don’t have perfect credit, you can still qualify, and the simple unlimited cashback offer lets you earn on all of your purchases, not just specific categories.
Learn more about Capital One QuicksilverOne Cash Rewards Credit Card
Blue Cash Preferred® Card from American Express
If you’re looking for a card that offers the highest cash back, the Blue Cash Preferred® Card from American Express has you covered.
Rewards
The Blue Cash Preferred® Card from American Express offers tons of cash back rewards in the form of a statement credit or at Amazon.com checkout (See Rates and Fees). You’ll earn:
- Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
- 6% cash back at US supermarkets (on up to $6,000 per year in purchases, then you’ll earn 1%)
- 6% cash back on US streaming subscriptions
- 3% cash back on transit (rideshares, tolls, parking meters)
- 3% cash back at US gas stations
- 1% back on other purchases
terms and conditions apply
You can also add an authorized user for anyone 13 and over, and you’ll earn cash back for their purchases as well.
Other Features
For all the cash back the Blue Cash Preferred® Card from American Express offers, the annual fee is actually fairly low. This card has a $0 intro annual fee for the first year, then $95. annual fee, but the rewards you earn for spending in bonus categories far outweigh the fee. (See Rates and Fees).
And finally, you get a nice welcome offer. Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
Who It’s For
The Blue Cash Preferred® Card from American Express is for experienced cash back users that are looking for the most cash back possible. The 6% cash back categories alone are worth the $0 intro annual fee for the first year, then $95. annual fee (See Rates and Fees).
Why Cash Back Cards Are A Great FI Tool
For those on the road to FI who prefer not to travel, cash back cards should be your go-to type of credit card. They can actually help folks on their journey to FI.
They Earn You Extra Cash
If you use your card for frequent purchases and don’t spend just to spend, cash back cards earn you extra cash that you’d never get with debit cards or cash.
Cash back cards offer more than just cash back, they also offer sign-up bonuses, which is even more cash, just for choosing the right card!
They’re Easy To Use
Cash back credit cards are also easy to use. You can opt for a card that has one rewards rate and unlimited cash back to make your spending easy, or you can opt for a rotating category card that offers more cash back. You just need to keep track of which categories earn the most.
Luckily, you can sign-up for email alerts, and your card issuer should remind you what the rewards categories are.
Final Thoughts
For folks who don’t travel and have no need for travel rewards, cash back credit cards are a godsend. If you pay off the balance in full each month and only spend on items you really need, you’re essentially earning free money!
There are cash back cards for every spending category, from groceries and gas to dining out, so there’s definitely something for everyone.
To see the rates and fees for the American Express card featured, please visit the following link: Blue Cash Preferred® Card from American Express: See Rates and Fees.
Top Travel Rewards Offers
Top Travel Card
Details: $95 annual fee | Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Most Flexible Travel Card
Details: $95 annual fee | Enjoy a one-time bonus of 75,000 Miles once you spend $4,000 on purchases within 3 months from account opening
Best Card for Side Hustlers and Business Owners
Details: $95 annual fee | Earn 100,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening.
