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.
Table Of Contents
- Types Of Cash Back Credit Cards
- Our Top Picks For Best Cash Back Cards
- Why Cash Back Cards Are A Great FI Tool
Types Of Cash Back Credit 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 (now discontinued) 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:
- Gas
- Groceries
- Dining out
- Entertainment
- Home improvement
- Amazon
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
Chase Freedom
The (now discontinued) 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.
Rewards
As I mentioned above, the Chase Freedom offers 5% on quarterly rotating categories. For example, for the second quarter of 2019 (April – June 2019) was 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.
Other Features
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 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 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.
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 cash back offer lets you earn on all of your purchases, not just specific categories.
Learn more about this card here.
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.
Rewards
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%.
Other Features
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.
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.
Check out our full review of the Citi Double Cash Card here.
Blue Cash Preferred Card By American Express
If you're looking for a card that offers the highest cash back, the Blue Cash card has you covered.
Rewards
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.
Other Features
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 nice sign-up bonus. You can earn $250 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.
Radius Bank Rewards Checking Debit Card
Are you eager to earn cash back but not so eager to own or use a credit card? We've got your solution. Radius Bank has a great product called the Rewards Checking Account. It's a checking account that is a step above other checking accounts. And it comes with rewards.
Rewards
To earn rewards you'll need to maintain an average balance of $2,500 or have direct deposit of at least $2,500 per month… but the rewards are pretty sweet and worth that small effort.
First off, the Radius Bank Rewards Checking Debit Card will give you 1% cash back on “signature-based” transactions. (So when you sign, rather than enter your PIN.) This is a nice feature when you want to use your debit card, but still want to earn rewards cash.
Other Features
Along with 1% cash back on purchases made with your debit card, the Radius Bank Rewards Checking Account offers:
- Freedom from ATM fees worldwide
- Early access to Direct Deposit monies
- No monthly fees
- 1% interest on balances between $2,500 and $99,999.
- 1.7% on balances over $100,000
- No minimum balance after the $100 account opening minimum
Who It's For
The Radius Bank Rewards Checking Cash Back Debit Card is for anyone who wants to earn cash back without having to use a credit card. Open your account here.
Check out our full review of Radius Bank here.
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.
Related Articles
- 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
Top Travel Card
If you are ready to start stashing Chase Ultimate Rewards for flexible travel, the favorite card among the FI travel rewards community is the Chase Sapphire Preferred.
Most Flexible Card
If you are looking for a card that has no Annual Fee but still earns you flexible Chase Ultimate Rewards points, this is the card to go for.
Best Business Card
If you have a side hustle, you should consider this card to earn extra Chase Ultimate Rewards points.
