How do you find the best cash back credit card?
It’s much simpler to compare cash back credit cards than cards offering points or miles because everyone knows how much cash is worth. So you can pretty easily determine how much you’re likely to earn with any given card. You just need to know how much you spend each month, what you spend it on and whether you plan to pay your monthly bills in full. If you approach the following tips armed with that information, you’ll find the best cash back credit card for your needs in no time.
5 Tips for Finding the Best Cash Back Credit Card
- Check your credit score. This will tell you which tier of cash back credit cards to consider, saving you from wasted time and effort as well as possible rejection. Make sure to check your latest credit score, too, because your rating might have changed since the last time you saw it.
- Crunch the numbers. Apply the terms of every card you’re seriously considering to your actual spending habits in order to estimate how much you will earn over the first year or so of use. This will give you a clear metric by which to compare offers, while forcing you to consider how relevant certain perks will actually prove to be.
- Don’t Forget Fees. You should neither overlook fees when calculating expected card earnings, nor dismiss cards that charge annual fees. Sometimes, paying an annual fee can help you earn more than you would otherwise. You just need to make an informed choice.
- Use the Island Approach. This means using multiple credit cards, each for a specific type of transaction. It’s a great way to get the best terms for each of your financial needs, and it will save you from trying to find a single card that can do anything.
- Beware of rotating bonus categories. Some cash back credit cards offer an eye-catching maximum earning rate that applies to a certain purchase category, which rotates on a quarterly basis. We’re not big fans of this framework because you have to sign up every few months and there’s no guarantee the bonus categories will match your biggest expenses.
Alternatively, if you want to make things easy on yourself, you can simply focus on WalletHub’s picks for the best cash back credit cards on the market right now.
Here’s a quick recap of 2017’s best cash back credit cards:
Finally, if you’d like to make things really easy, you can simply sign up for a free WalletHub account
and get a personalized credit card recommendation based on your latest credit score and your specific financial needs.
How do the best cash back credit cards compare to the best travel rewards cards?
Comparing the best cash back credit cards to the best travel rewards cards
is kind of like choosing between an apple and an orange. They have a lot in common, but they’re also quite different.
For example, cash back credit cards are known for their flexibility because you can use cash for anything. Travel rewards, on the other hand, often limit redemption to specific airlines, hotels, travel booking sites, etc. But the best travel rewards cards are also known for hefty initial bonuses and extra-generous earning rates, at least on certain types of travel expenses. And while the best cash back credit cards are very rewarding in their own right, they’re characterized more by stable, straightforward earning rates than maximum upside potential.
To help clarify the differences between the best cash back credit cards and the best travel rewards cards, WalletHub’s editors compared their top picks in each category based on a few key terms. Here’s how they stack up, on average:
||Best Cash Back Credit Cards
||Best Travel Rewards Cards
|Base Rewards Rate
|Max Rewards Rate
Finally, it’s worth noting that the best cash back and travel rewards cards aren’t mutually exclusive. It’s common to use a cash rewards card for everyday expenses and supplement it with a travel rewards card for travel-related spending. Of course, such a strategy makes the most sense for frequent travelers.
How often do the best cash back credit cards change?
Credit card offers change on a regular basis, as terms are adjusted, new cards are introduced and old cards are discontinued. But WalletHub keeps close tabs on 1,000+ cards and carefully evaluates each notable newcomer. And our editors update their picks for the best cash back credit cards whenever it’s warranted.
There is no specific timetable for this, however. Credit card companies alter offers at their own discretion based on a variety of factors.
How does cash back work on a credit card?
Cash back is the simplest credit card rewards currency, as there is no question about what it’s worth, unlike with points and miles. You simply get back a percentage of what you spend in the form of a statement credit, check or bank account deposit. For example, if you spend $5,000 with a credit card offering 2% cash back, you would earn $100.
The one thing you need to watch out for is cards that advertise cash back but really provide points or miles. After all, points and miles can be devalued if the issuer increases the number needed to redeem for a particular dollar amount. That is not an issue with a true cash back credit card.
Do the best cash back credit cards make rewards redemption easier?
Rewards redemption is very simple with all cash back credit cards. You earn rewards in terms of cash, which you receive in the form of checks or statement credits. There are no blackout dates, no risk of devaluation, no loopholes, no point benchmarks to reach, just a clear cash earning rate. The best cash back cards simply heighten the benefits provided by your typical cash back credit card.
What does 1% cash back mean?
To put it simply, 1% cash back means that you earn $1 in rewards for every $100 that you spend. More specifically, you get 1% of each purchase back in the form of a statement credit, check or bank account deposit.
One percent cash back is roughly what the average cash back credit card offers, according to WalletHub's latest Credit Card Landscape Report
. Many rewards cards offer 1% back as their base earning rate, while giving you the ability to earn more in specific spending categories.