“Cash back” is one of the three main rewards currencies, along with points and miles. When you have a credit card with cash back, a certain percentage of each purchase you make is returned to you via check, statement credit or gift card. The main advantage of cash back rewards is that they earned and redeemed in terms of dollars (and not points and miles that must be converted into corresponding amounts of specific goods or services). As a result, cashback rewards are not only the easiest to understand, but perhaps more importantly, cannot be devalued and can be used for any type of purchase. On the other hand, points and miles may allow you to get more bang for your buck IF you redeem often and toward the card’s intended purpose (e.g. if you have a Starwood Hotels Credit Card, you’ll get significantly more value on points redeemed for Starwood nights than, say, an iPad).
Cash back credit cards refund a certain percentage of your purchases in the form of a statement credit or via check, thereby lowering the effective cost of your expenses. Cash back is also considered to be the most straightforward, dependable rewards currency since it cannot be devalued by credit card companies. Unlike with cash, credit card companies can always reduce the value of points or miles by increasing the amount needed for redemption. According to WalletHub data, the average cash back credit card provides roughly 1% in earnings for each dollar you spend, so your goal in searching for a card should be to exceed that amount. We also recommend focusing on cards with constant earning rates, rather than those fluctuating based on expense category or amount spent, as the former are far more straightforward and tend to be a better value. Furthermore, it’s important to note that some credit card companies – including Barclays and Chase – distribute cash back earnings in the form of points. As a result, it’s crucial that you check a particular issuer’s cash back redemption rates before applying for one of its cards. Last but not least, it’s important to remember that paying an annual fee isn’t always a bad thing. Many of the market’s best cash back cards charge annual fees, but they also enable users to earn back far more than they pay. Check out the credit offers below (some of which are issued by WalletHub partners).… show moreshow less