Generally, three kinds of cash-back cards rule the market: flat-rate, tiered-rate and rotating category credit cards. Show
Flat-Rate Credit CardsFlat-rate cash-back credit cards earn the same percentage back on your eligible spending, typically anywhere from 1% to 2%, without any spending caps or category restrictions. Tiered-Rate Credit CardsTiered rewards cash-back cards earn different amounts back in different areas of spending. For example, some cards offer elevated rewards on dining or travel and a lower rate on other areas of spending. Rotating Category Credit CardsWith rotating bonus category cards, you will earn higher-than-average rewards, typically about 5%, on specific areas of spending up to a quarterly maximum. After that, the rewards rate will drop to 1%. All other purchases on the card typically earn 1% cash back. Bonus categories typically change every three months. Factors to Consider When Choosing a Cash-Back CardThe best cash-back credit card is the one that best fits your lifestyle and spending habits. The right cash-back card for someone else may not be the right cash-back card for you. Forbes Advisor aims to help you by identifying what each cash-back card is best for, but you should always do the math yourself and consider not only how much cash back you could earn but also how you might use the other card benefits. After you’ve identified how much you spend in different areas and what other card features could benefit you, you’re ready to compare credit cards and shop for the best one for you. As you compare cards and credit card issuers, there are some things that you should incorporate into your evaluations.
How To Get Cash Back From a Credit CardCashing in on cash back you’ve earned from all those laborious swipes, taps and chip inserts will vary from issuer to issuer, but typically to redeem cash back you’ll make a request using an issuer’s app or website after you’ve logged into the mobile or online banking system. Some accounts redeem cash back automatically. You may be able to choose how your cash back is redeemed: as a statement credit, as a deposit to a qualifying bank account or as a check the issuer will mail to you. Some cash-back cards also allow you to redeem cash back by applying it to purchases. Pros and Cons of Cash Back Credit CardsCash-back credit cards are an excellent way to earn rewards with every qualifying purchase on your credit card. There’s generally no learning curve required and you can claim your rewards with a few clicks in your online account—sometimes they’re even provided as a statement credit automatically. You can also easily calculate your earnings so you know precisely what to expect. One con of a cash-back credit card is that there’s an upper limit on your earnings. Some other types of credit cards may feature higher earning rates than the typical 1% to 2% on cash back cards, assuming you are willing to put in the effort to learn about the associated points or miles program. Another con of cash-back cards is that, compared to specialty rewards cards, there are usually fewer built-in benefits. Frequently, cash-back cards focus only on the rewards rather than travel benefits, statement credits toward select purchases or other perks. Finding the Best Cash Back Card for YouThere are many great cash back cards on the market, but the card that will earn you the greatest rewards depends on your spending habits. Before committing to a card, take a look at your budget and see where you spend most frequently. Then choose the card that best fits your lifestyle. How to Make the Most of Your Cash Back Credit CardLeveraging multiple cash-back cards can mean earning elevated rewards across multiple bonus categories. For instance, you could earn a card rewarding gas purchases at 3% cash back and another earning 4% cash back on groceries and yet another earning 2% cash back on all other purchases. Where the first two cards likely only reward non-bonus category spending with 1% cash back, you can pair multiple cards to reward the major spending you do across all categories. Beware: Managing multiple credit card accounts means more responsibility, including more monthly statements, more minimum payments, more fees and more risk of accrued interest. Be careful not to shoulder too much. Read More: How Many Credit Cards Should I Have? Alternatives to Cash-Back Credit CardsDepending on your preferred redemptions, other types of credit card rewards might be more valuable to you. Cash Back vs. Travel RewardsTravel rewards, such as airline miles or hotel points, can be strategically redeemed to get outsized value. Every travel program has sweet spots where a single point or mile could be worth five or ten cents each when redeemed strategically. However, this assumes you’re well-versed on the program’s strengths—and have the flexibility to take advantage of them. Cash back, on the other hand, offers stable value. You don’t have to hunt for the most valuable redemptions and don’t have to worry about getting below-average value. It’s also much simpler and doesn’t require a time investment in order to redeem rewards. Cash Back Vs. Flexible Bank PointsMany card issuers offer proprietary points instead of traditional cash back. These programs, like Chase Ultimate Rewards or Citi ThankYou points, build in flexibility. When you earn credit card points, you can redeem them as cash back (often, but not always, equivalent to 1%) or you can redeem them for other rewards through the program. A common redemption option is to book travel through the points portal to get 25% more value with every point. You may also be able to transfer points to partnering travel loyalty programs, effectively earning travel rewards. Once again, cash back is the easiest and most straightforward option. However, credit card points usually have one or more alternate redemption options that are still relatively simple yet provide a greater return. The flexibility of points is their greatest attribute. To view rates and fees for Blue Cash Preferred® Card from American Express please visit this page. *Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. **Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc. Is cashback on a credit card worth it?If you pay your credit card bill off in full every month, then cashback credit cards can be a great idea. This is because you're getting rewarded for spending money you would have spent anyway. If you don't always pay off your credit card bill in full, then cashback credit cards are not a good choice.
Is there a downside to cashback?There are a few drawbacks to a cash-back rewards card, including a higher-than-usual APR, having to wait to access your cash-back funds, and a cap on how much you can earn each year. Also, when it comes to travel rewards such as airline miles, sometimes the miles are worth more than the cash.
Can you get cash back with all credit cards?For the most part, no. Most credit cards do not offer the ability to get cash back at a register, though there are some exceptions. Otherwise, you'll need a debit card.
What credit card can hold the most money?The American Express Centurion Card is the most exclusive credit card in the world and is commonly known as the “Amex Black Card.” ... . The Centurion card is so exclusive that American Express won't release the card's full details or say how one can become a cardholder.. |