In the Choose FI 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 cash back credit cards are just as important. They offer cash back 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.Pairing the right cash back card with your everyday spending can maximize your rewards.
What Are The Different Types Of Cash Back Cards?
When it comes to cash back credit cards, there are two primary types: rotating category cards and general cash back.
Rotating Category Cards
Rotating cash back credit cards offer extra cash back on categories that rotate quarterly.
For example, one of the cards we’re going to discuss is the Chase Freedom. This card offers 5% on categories that change every few months–the category as of this writing is grocery and home improvement stores.
The merchants usually included in these 5% categories are:
- Dining out
- Home improvement
General Cash Back Cards
General cash back credit cards offer one cash back rate, making them simple and easy to use.
One example below is the Capital One QuicksilverOne Cash Rewards Credit Card. It offers 1.5% cash back on all purchases, with no limitations.
Our Top Picks For Best Cash Back Cards
To give you a quick rundown before we dive into the details of our favorite cash back cards, here’s a handy table.
|Credit Card||Rewards||Annual Fee||Sign-Up Bonus?|
|Chase Freedom||5% back on quarterly rotating categories|
1% cash back on all other purchases
|None||$150 after you spend $500 in your first three months|
|Capital One Savor Cash Rewards Credit Card||4% back on dining and entertainment|
2% at grocery stores
1% on all other purchases
|$95 ($0 the first year)||$300 cash bonus after spending $3,000 on purchases within three months|
|Capital One QuicksilverOne Cash Rewards Credit Card||1.5% cash back on all of your purchase||$39||N/A|
|Citi Double Cash Card||1% cash back when you make a purchase, and another 1% when you pay your card off||None||N/A|
|Citi Rewards+ Card||2X points at supermarkets and gas station|
1X on all other purchases
Round up to the nearest 10 points on all your purchases
|None||15,000 bonus points after you spend $1,000 within the first three months|
|Blue Cash Preferred Card by American Express||6% cash back at supermarkets and streaming subscriptions|
3% cash back on transit and gas stations
1% back on all other purchases
|$95||$300 back after you spend $1,000 in purchases in the first three months|
The Chase Freedom is my personal favorite. The 5% rotating rewards category is a generous cash back offer, and I’ve found Chase’s redemption options to be the best.
As I mentioned above, the Chase Freedom offers 5% on quarterly rotating categories. For example, for the second quarter of 2019 (April – June 2019) wass 5% back at grocery stores and home improvement stores.
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, you’ll earn 1% cash back on all other purchases. Both the 5% and 1% cash back rewards won’t expire as long as you keep your account open.
There’s a lot to love about the Chase Freedom. Not only are the rewards generous, but Chase offers a decent cash bonus of $150 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 the Chase Freedom is the fact that it has no annual fee! I’m a big fan of no annual fees since they often eat into rewards.
Who It’s Best For
The Chase Freedom is a simple cash back card, and I’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 better sign up bonuses with the other cards I’ll mention below.
Capital One Savor Cash Rewards Credit Card
For those who like to dine out frequently, the Capital One Savor Cash Rewards Credit Card is your dream card.
This card offers a whopping 4% back on dining and entertainment. Plus, it offers 2% at grocery stores and 1% on all other purchases.
The dining rewards include: restaurants, cafes, bars, lounges, fast-food chains, and bakeries, meaning nearly every kind of dining experience is included under the 4%.
In case all those rewards aren’t enough, Capital One has also partnered with Vivid Seats, an online ticket marketplace where you can buy tickets to sporting events, concerts, and theater events. This partnership with Capital One lets Savor cardholders to earn 8% cash back on all Vivid Seats ticket purchases (through May 31, 2020).
The Capital One Savor Cash Rewards Credit Card doubles the sign-up bonus of the Chase Freedom. They offer a $300 cash bonus after spending $3,000 on purchases within three months. While the bonus is doubled, you’ll need to spend significantly more to get that bonus.
Unfortunately, this card does come with an annual fee, but it’s not the highest you’ll find. The first year you won’t have to pay an annual fee at all, but it’s $95 after that.
Who It’s For
This card is perfect for those who like to spend their weekends (and maybe even some weeknights) on the town. You’ll be hard-pressed to find a better card for frequent dining, entertainment, and grocery stores.
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.
The Capital One QuicksilverOne Cash Rewards Credit Card offers 1.5% cash back on all of your purchases, with no limitations. It doesn’t get much simpler than that.
You can redeem your rewards for cash, gift cards, or apply them to your purchases.
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 cash back offer lets you earn on all of your purchases, not just specific categories.
Citi Double Cash Card
The Citi Double Cash Card offers a unique cash back system, where it offers cash back when you make a purchase and when you pay it off. But that’s not all the Citi Double Cash Card offers.
As mentioned above, Citi rewards you twice with the Citi Double Cash Card. You’ll earn 1% cash back when you make a purchase and another 1% when you pay your card off. That puts this card above the Capital One QuicksilverOne Cash Rewards Credit Card in terms of cash back, but you’ll need to keep paying off your credit card in full to get the additional 1%.
If you’re looking for a good balance transfer card, the Citi Double Cash Card offers a low APR for 18 months on all balance transfers. A quick note: There is a balance transfer fee of $5 or 3% of the amount of the transfer, whichever is greater. And the regular APR would apply after the intro period.
Another great feature of this card is the fact that it has no annual fee.
Like the Capital One Savor Cash Rewards Credit Card, Citi offers special perks when you buy event tickets with your card. The Citi Private Pass gives special access to purchase tickets to thousands of events including concerts, sporting events, dining experiences, and more.
Who It’s For
The Citi Double Cash Card is great for folks who pay off their credit card in full each month and want a simple cash back card that still earns a decent amount of cash back.
Citi Rewards+ Card
The Citi Rewards+ Card has a little bit of everything going for it. Rewards, no annual fee, and a great intro APR. (The regular APR would apply after the intro period.)
Citi does cash back a little differently. They offer ThankYou points that you can redeem for travel rewards, gift cards, and concert tickets. You can also use your points at Amazon or Best Buy.
Their point system goes as follows:
- 2X points at supermarkets and gas stations (for the first $6,000 per year and 1 point per $1 spent after)
- 1X on all other purchases
- Round up to the nearest 10 points on all your purchases, with no cap
- 10% points back for the first 100,000 ThankYou Points you redeem per year
As mentioned above, there’s no annual fee for the Citi Rewards card. There’s also a low APR for purchases and balance transfers for the first 12 months you have the card.
If you decide to use the card for a balance transfer, note that there is a balance transfer fee of $5 or 3%, whichever is greater.
Citi Rewards has a current sign-up bonus of 15,000 bonus points after you spend $1,000 within the first three months. 15,000 points can be redeemed for $150.
Who It’s For
The Citi Rewards+ Card offers the best of everything when it comes to cash back cards. If you need a cash back card with no annual fee, a low introductory APR, and plenty of rewards, look no further than the Citi Rewards+ Card.
Blue Cash Preferred Card By American Express
We saved the best for last. If you’re looking for a card that offers the highest cash back, the Blue Cash card has you covered.
The Blue Cash Preferred Card by American Express card offers tons of cash back rewards. You’ll earn:
- 6% cash back at supermarkets (on up to $6,000 per year in purchases, then you’ll earn 1%)
- 6% cash back on streaming subscriptions
- 3% cash back on transit (rideshares, tolls, parking meters)
- 3% cash back at gas stations
- 1% back on all other purchases
You can also add an authorized user for anyone 13 and over, and you’ll earn cash back for their purchases as well.
For all the cash back the Blue Cash Preferred Card By American Express offers, the annual fee is actually fairly low. At just $95, the rewards you earn far outweighs the fee.
In addition, you’ll receive a low APR on purchases and balance transfers for 12 months.
And finally, you get a decent sign-up bonus. You can earn $300 back after you spend $1,000 in purchases in the first three months. That’s actually a pretty low minimum spend.
Who It’s For
The Blue Cash Preferred Card By 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 $95 annual fee.
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.
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.
- Citi Double Cash Card Review: Earn Double Cash Back
- Travel Rewards Vs Cash Back: How To Choose
- The Best Credit Card To Book Flights: Maximize Your Travel Rewards