How to Choose the Best Cash Back Credit Card for You

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  • I realized I might be missing out on rewards by not using a cash-back credit card.
  • I plan to open a no-annual-fee card that offers a generous welcome bonus.
  • I’ll choose a card that offers bonus cash back in the categories where I spend the most.
  • Read Insider’s guide to the best rewards credit cards.

The other day, I decided to finally upgrade some of the technology I use for work and personal projects. I wanted to get a new microphone, computer, tripod, and monitor. Altogether, I was going to be spending over $2,500.

Before I pressed the buy button, my husband urged me to reconsider purchasing these items with my JetBlue Card, which would only give me 2,500 JetBlue points — equivalent to around $35 based on Insider’s points and miles valuations). Instead, he suggest I consider getting a cash-back credit card that earns 2% cash back, like the Wells Fargo Active Cash℠ Card
, which would earn $50 on this purchase.

He showed me how his cash-back card provides him with decent rewards every month and how I was missing out. It tempted me to consider getting my very first cash-back credit card before, something I never thought I wanted to get.

Read more: Guide to the best cash back credit cards

Before the pandemic, I was a constant traveler who banked on using travel rewards points to pay for flights and hotels. Since a lot of my travel has been cut back permanently, it makes more sense to get a credit card that gives me immediate benefits in the form of money back. 

Since I’m starting the process of picking the right credit card, here are four things I’m considering that will help me make the best decision. 

I don’t want a card with an annual fee

Regular APR

14.99% – 24.74% Variable APR

Credit Score

Good to Excellent

Featured Reward

$200 after spending $500 on purchases in the first three months from account opening

Intro APR

0% intro APR on purchases and balance transfers for the first 15 months

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  • Pros & Cons
  • Details

  • Pros
    • Solid flat cash-back rate
    • You can combine cash-back rewards with Ultimate Rewards points if you have an eligible card
    • No annual fee
    Cons
    • Some other cards offer a higher rate of cash back on certain types of purchases
    • $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
    • 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
    • 3% cash back on dining at restaurants, including takeout and eligible delivery services
    • 3% cash back on drugstore purchases
    • 5% on travel purchased through Chase Ultimate Rewards®
    • Unlimited 1.5% cash back on all other purchases
    • 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99% – 24.74%.
    • No annual fee.

    Read Our Review
    Read Our Review A looong arrow, pointing right

    One of my overall rules for credit cards is to avoid those that come with an annual fee, unless the benefits supplement that fee or are extremely worth it. The majority of the cards I am considering do not have an annual fee, but one that seemed appealing does — the Blue Cash Preferred® Card from American Express has an annual fee of $0 intro for the first year, then $95 (See Rates).

    While the added benefits of this card include 6% back on your first $6,000 in U.S. supermarket spending each year (then 1% back) and 6% cash back on select U.S.


    streaming

    services (cash back is earned in the form of Rewards Dollars), it’s similar enough to the Chase Freedom Unlimited®.

    Read more: Chase Freedom Unlimited credit card review

    The Chase Freedom Unlimited® offers new cardholders 5% cash back (5x points) at grocery stores (excluding Target and Walmart) on up to $12,000 in spending during the first year of account opening (then 1x), with no annual fee. 

    When it comes to


    cash-back credit cards

    , many options don’t have an annual fee, so if you’re considering one that does, make sure the benefits included make paying that fee worthwhile.

    I want to earn a welcome bonus

    While many travel rewards credit cards offer major bonuses for opening the card and meeting a minimum spending requirement in a certain timeframe, cash-back cards don’t always come with those same intro offers. For example, one card I’m not considering is the Capital One QuicksilverOne Cash Rewards Credit Card, which has a $39 annual fee and no current intro offer.

    Read more: Amex Blue Cash Preferred credit card review

    The best intro offer I was able to find was on the Blue Cash Preferred® Card from American Express — $300 statement credit after spending $3,000 in purchases on your new card within the first 6 months. However, the Chase Freedom Unlimited® offers $200 after spending $500 on purchases in the first three months from account opening, and doesn’t have an annual fee. At $100 less, that welcome bonus seemed like a better deal. 

    Intro offers vary by month and season. Be sure to research and look for updated reward offers before making your final decision. 

    I want to be rewarded for my top spending categories

    One of the trickiest parts of picking a cash-back card is finding one that provides you with a high cash-back rate for the categories you spend the most on. While some provide a fixed cash-back percentage, no matter the spending category, like 2% cash back on the Wells Fargo Active Cash℠ Card, some vary the rate based on the type of spending you do. 

    I sat down and reviewed my credit card statement and realized the categories that matter the most to me are groceries, dining, and travel. I don’t have a car so rewards for buying gas do not apply to me (this is a popular category for some cash-back cards). This lined up well with the Chase Freedom Unlimited®, which offers the 5% back at grocery stores for new cardholders (up to spending limits), 5% back on travel purchased through Chase’s Ultimate Rewards, plus 3% back on dining and drugstores.

    Read more: There are 4 different types of cash-back credit cards, and the best option for you depends on your spending

    However, another viable option is the Citi Custom Cash℠ Card, which lets you earn 5% cash back on purchases made in your top eligible spend category (restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs, and live entertainment), up to the first $500 spent each month (then 1%).

    Start by determining what you spend the most money on every month and then find a card that rewards you for spending in those categories. 

    I don’t want spending caps

    I always wondered if you can make endless cash back with your credit card, only to find out that many cards have a limit on the bonus cash back they’ll pay out in a billing cycle, quarter, or year. 

    For example, the Chase Freedom Flex℠ offers 5% cash back on up to $1,500 in combined spending in categories that rotate every quarter when you activate the bonus. Or the Blue Cash Preferred® Card from American Express offers 6% cash back on U.S. supermarket purchases, up to $6,000 per year (then 1% back). 

    Read more: Chase Freedom Flex vs Chase Freedom Unlimited: Which cash-back card is right for you?

    If you don’t want to worry about reaching a limit and not being able to earn a high percentage on certain categories, you can consider a card like the Wells Fargo Active Cash℠ Card, which gives you unlimited 2% cash back on every dollar you spend. 

    Featured cash back credit cards from our partners

    Featured Reward

    2% cash back on all purchases

    Credit Needed

    Good to Excellent

    Featured Reward

    $200 after spending $500 on purchases in the first three months from account opening

    Credit Needed

    Good to Excellent

    Featured Reward

    $200 after spending $500 on purchases in the first three months from account opening

    Credit Needed

    Good to Excellent

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