Cash Rewards Credit Cards: An Overview

The best cash back credit cards offer a combination of excellent rewards and simplicity. We have the list of the top cash rewards credit cards for you here.
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There are few incentives that draw people in quite like the allure of free money. Yet, that is exactly what card issuers that offer cash rewards are doing – and with only mediocre results. Despite the popularity of cash-back rewards, a recent study from Cardhub.com estimated that Americans left roughly $57 billion dollars in credit card rewards on the table in 2014 and are projected to miss out on at least $60 billion in rewards in 2015.

Considering how easy these rewards are to earn and redeem, that’s a shame. In most cases, the only requirement to earn cash back is that you use your card to make a purchase. It’s as simple as that. And if you never want to pay interest (as you shouldn’t), you don’t have to either. All you need to do is pay your bill in full before it’s due and your rewards will be free.

Most rewards credit cards offer points based on a percentage of your everyday spending – usually somewhere between 1 and 5%. However, certain cards also offer a sign-up bonus to customers who spend a certain amount of money on the card within a time period of a few months. Since sign-up bonuses can be worth anywhere from $100 – $500, and you earn them in addition to regular rewards, it’s easy to see how using a cash rewards credit card can be a lucrative endeavor.

I’m a big fan of using cash back credit cards and try to make as many purchases as possible with my cash rewards card. If you are similar, then check out the following featured credit cards which offer a variety of cash rewards. It’s important to pay attention to the rewards structure, as these cards feature different cash back rewards. Some offer a flat cash back rate, while others offer additional cash back in bonus categories, rotating categories, and more.

Best No-Hassle, No-Fee All-Around Cash Back Credit Card

Limited Time Intro Offer – Earn a $200 bonus after you spend $500 in the first 90 days from account opening. Plus, earn 5% cash back on gas station purchases on up to $6,000 spent in the first year.

Some people prefer simplicity compared to trying to maximize each penny they can save. If you are that type of person, then check out the Chase Freedom Unlimited®, which offers an automatic 1.5% cash back on all purchases, with additional cash back in bonus categories offering up to 5% cash back.

This makes it easier to maximize your rewards. You don’t have to try and remember which bonus category is effective this quarter, and you don’t have to track your spending to make sure you maximize each purchase.

Cash Back with the Chase Freedom Unlimited®:

  • 5% cash back on travel purchases made through the Chase Ultimate Rewards® platform
  • 3% cash back on drugstore purchases
  • 3% cash back on dining at restaurants (including takeout and eligible delivery services)
  • 1.5% cash back on all other purchases with no limits

All purchases automatically earn at least 1.5% cash back. There are no spending limits, no rotating categories to worry about, and no limits on the amount of cash back you can earn. There are also no minimums for redeeming your rewards. There is no annual fee, and your rewards don’t expire as long as you keep your account open.

To top it off, this card offers a 0% Intro APR for 15 months on purchases and balance transfers from the time you open your account. A variable APR of 17.24% – 25.99% will apply after that. See the website for current rates, pricing, and terms.

Additional benefits:

  • Earn a $200 bonus after you spend $500 in the first 90 days from account opening. Plus, earn 5% cash back on gas station purchases on up to $6,000 spent in the first year
  • No annual fee

Overall, this is a dependable card that offers very good rewards without having to jump through hoops.

Best All Around Cash Back Credit Card – Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express is the credit card my wife and I use for most of our daily spending. It does come with a $95 annual fee which is waived for the first year. However, it more than pays for itself with its generous rewards program, which tops off at an unheard of 6% cash back in select categories.

Here is the cash back from the Blue Cash Preferred® Card:

  • $350 welcome bonus after spending at least $3,000 within the first 6 months
  • 6% Cash Back at US supermarkets for first $6,000 per year in purchases; 1% cashback after that
  • 6% Cash Back on select US Streaming services
  • 3% Cash Back at US gas stations & on transportation services, including taxis, rideshares, parking, tolls, trains, buses, and more
  • 1% Cash Back on purchases in other categories
  • Cash Back is awarded as Reward Dollars which can be redeemed for a statement credit, gift cards, or shopping
  • Terms and limitations apply, read here
  • $95 Annual Fee, which is waived for the first year

As you can see, it’s not too difficult to earn back the $95 annual fee with those cashback rates! Just spending $500 a month on groceries will earn you $265 in rewards after paying for the annual fee. That is much better than a flat 2% cash back that some cards offer.

Add in the cash back on gas and transportation, streaming services, and other features, and this card is a winner!

Don’t want to Pay An Annual Fee? Check out the Blue Cash Everyday® Card from American Express

The Blue Cash Everyday® Card from American Express is similar to the Blue Cash Preferred® Card, however, it has lower cashback rates and does not come with an annual fee. We have a full-length comparison of these two cards here. (Spoiler, even though the Blue Cash Everyday is a great card, the Blue Cash Preferred comes out on top for many people).

Blue Cash Everyday® Card from American Express:

  • $200 statement credit after you spend $2,000 in purchases within the first 6 months
  • 3% Cash Back at US supermarkets, up to $6,000 per year in purchases (1% thereafter)
  • 3% Cash Back at US gas stations & select department stores, up to $6,000 per year (1% thereafter)
  • 1% Cash Back on all other purchases
  • Cash Back is awarded as Reward Dollars which can be redeemed for a statement credit, gift cards, or shopping
  • Terms and limitations apply
  • No Annual Fee

Navy Federal Credit Union Visa cashRewards Card – Best Rewards Card for Military Members

The Navy Federal Visa cashRewards Card offers up to 1.75% cash back on all purchases. There is no annual fee, no foreign transaction fees, and no limit to the amount of points you can earn as long as your account remains open.

  • Up to 1.75% cash back on all purchases
  • Start redeeming rewards as soon as you earn them
  • New enhanced rewards structure

For a limited time, you can also earn $100 bonus cash back when you spend at least $2,000 within the first 90 days of opening your account. Terms apply.

Different Types of Cards

It’s true that these offers can be highly profitable, but the big pay-off comes when you’re able to pick the optimal card for your needs and spending pattern. Although most cash rewards cards work the same way, several cards break the mold and offer unique perks and earning tiers. Here are a few of those unique cards, plus the most common types of cash rewards cards currently on the market:

Fixed Cash Rewards Cards

Some cards offer a fixed percentage of cash back on all of your purchases in every category – usually between 1 -2%. While these cards generally aren’t as lucrative over the long haul, some consumers prefer the simplicity of this earning strategy.

No Annual Fee Cards

No annual fee cards offer a ton of perks without charging an annual fee for use. This type of card usually works best for someone who is opposed to paying an annual fee or just wants to earn casual rewards on their everyday spending.

Rotating Rewards Cards

While some cards offer a set percentage of cash back on purchases, others offer more cash back on categories that rotate each quarter. Rotating rewards cards usually offer 1% cash-back on all purchases and up to 5% cash back on rotating “bonus categories.” Those categories change every quarter – and even from year to year.

Bonus Category Cards

While rotating rewards cards offer a higher bonus on categories that change each quarter, other cards offer bonus categories that don’t change. For example, some cards that fall under this umbrella might offer 1% cash back on everything, 2% cash back on dining and entertainment, and 3% cash back on travel. Some cards with bonus categories even let you select your own bonus category.

How to Select a Cash Rewards Credit Card

While any cash rewards credit card is better than nothing, choosing a card that is tailored to your needs will ultimately lead to more rewards. Here are some factors to consider as you narrow down your selection of cash rewards credit cards:

Consider your spending – If your spending tends to be high in areas like groceries or gas, it usually makes sense to choose a rewards card that offers more cash back in those categories. Look at the different cash rewards offers available and select the card with more earning potential where you spend the most.

Take annual fees into account – Paying an annual fee on a rewards card might make sense if you spend enough on your card each year. However, an annual fee can quickly eat away at your earnings if you don’t use your card very often. When weighing the pros and cons of choosing a card with an annual fee, always run the numbers. Only choose a card with an annual fee when you plan on earning more than enough rewards to make up for it.

Don’t forget the sign-up bonus – A card with a healthy sign-up bonus can help you earn a higher percentage of rewards over the course of a year – even when compared to a card that offers a higher percentage of cash back, but no bonus. Always do the math and make sure the sign-up bonus is a perk, not a hindrance.

Explore the rewards program – While some cash rewards cards offer several ways to redeem your points, others only allow you to redeem them for a statement credit. If you want a rewards card that lets you redeem your points for gift cards, travel rewards, merchandise, or airline miles make sure you know that ahead of time.

Know your limits – In addition to knowing the limit you can spend on your card, you also need to be aware of any limits on cash-back offers as well. These limits on “bonus category” earning can seriously diminish the rate of rewards you earn with your card. With most rotating rewards cards, for example, you only earn 5% cash-back on the first $1,500 you spend in the bonus category each quarter. That’s only $75.

Know your credit score – Almost all of the best rewards credit cards require excellent credit. If your credit score is mediocre, it might be wise to spend some time rebuilding your credit – and your score – before pursuing a card that offers rewards.

The decision to use a rewards credit card to earn cash-back on your everyday spending is almost a no-brainer. But, finding the best one? Now, that’s the hard part.

Just remember, the best cash rewards cards will provide you with a steady stream of fun rewards you can use for almost anything – and with minimal effort.


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About Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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