Best cash-back credit cards of 2020
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Sometimes you don’t need your credit cards to award you airline miles so you can fly to an exotic location in first-class. Now more than ever, non-travel redemption options are valuable and necessary for many cardholders. In general, TPGers may prefer transferable points and using your rewards to travel. But for many, cash back is king — and there’s nothing wrong with that.
Today, I want to go over the top cash-back credit cards you can use to maximize your everyday purchases.
The Points Guy’s best cash-back credit cards for 2020
- Blue Cash Preferred® Card from American Express: Best for gas, groceries, and streaming
- Citi® Double Cash Card: Best for balance transfer
- Chase Freedom Unlimited: Best for intro APR
- Capital One® Savor® Cash Rewards Credit Card: Best for dining and takeout
- Chase Freedom: Best for rotating bonus categories (No longer open to new applicants)
- Capital One® Spark® Cash for Business: Best for business cash-back
- Ink Business Cash Credit Card: Best for small business spending
- Bank of America® Cash Rewards credit card: Best for online shopping
- Blue Cash Everyday® Card from American Express: Best for beginners
- Wells Fargo Propel American Express® card: Best for commuters
Compare cash-back credit cards
|Credit Card||Sign-up Bonus/welcome offer||Annual fee||Rewards rate|
|Blue Cash Preferred Card from American Express||$250 statement credit after you spend $1,000 in purchases in your first 3 months of account opening. Terms apply.||$95 (see rates & fees)||6% cash back on purchases at U.S. supermarkets (on up to $6,000 of spending each reward year, then 1%) and on select U.S. streaming subscriptions
3% on transit and at U.S. gas stations
1% on everything else
|Citi Double Cash Card||N/A||$0||2% cash back on all purchases (1% when you make purchases, 1% when as you pay your bill)|
|Chase Freedom Unlimited||$200 bonus after spending $500 in their first three months, plus 5% back on the first $12,000 spent on groceries in your first year.||$0||1.5% cash back on other purchases|
|Capital One Savor Cash Rewards Credit Card||$300 cash bonus once you spend $3,000 on purchases within 3 months of account opening.||$95||4% cash back on dining and entertainment; 2% at grocery stores|
|Capital One Spark Cash for Business||$500 cash back after $4,500 in spending in the first 3 months||$95, waived the first year||Unlimited 2% cash back|
|Ink Business Cash Credit Card||$500 cash back after you spend $3,000 on purchases in the first 3 months||$0||5% cash back on the first $25,000 spent in combined purchases at office supply stores, on cellular phone, landline, internet and cable TV services each account anniversary year
2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
1% cash back elsewhere.
|Bank of America Cash Rewards credit card||$200 cash bonus after spending $1,000 in purchases within 90 days of account opening||$0||3% cash back on in the category of your choice monthly (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings)
2% at grocery stores and wholesale clubs (up to $2,500 in combined bonus category spend each quarter; then 1%)
1% on everything else
|Blue Cash Everyday® Card from American Express||$150 cash bonus after spending $1,000 in the first three months||$0 (see rates & fees)||3% cash back on U.S. supermarkets (up to $6,000; then 1%)
2% on U.S. gas stations and select U.S. department stores
1% on everything else
|Wells Fargo Propel American Express® card||20,000 points worth $200 with $1,000 in spending in the first 3 months of account opening.||$0||3x points on dining, travel, gas stations and select streaming services
1x on everything else
The information for the Chase Freedom Unlimited, Wells Fargo Propel Amex, Capital One Savor Cash Rewards Credit Card, and Capital One Spark Cash for Business has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Deeper dive into the best cash back credit cards
Blue Cash Preferred Card from American Express: Best for gas, groceries and streaming
Welcome offer: $250 statement credit after you spend $1,000 in purchases on your new card in your first three months of account opening.
Rewards rate: Earn 6% cash back on purchases on select U.S. streaming subscriptions and at U.S. supermarkets (on up to $6,000 of spending each reward year, then 1%), 3% cash back at U.S. gas stations and on transit and 1% cash back everywhere else. Terms apply.
Annual fee: $95 (see rates and fees).
Why we chose it: Another rewards credit card with some intriguing bonus categories is the Blue Cash Preferred Card from American Express. This is a great all-around cash-back card because it earns solid rewards on categories that don’t always get a lot of love from other cards. When Amex added streaming services and transit to this card’s bonus categories, it got a major bump in value in my mind. Just remember that it charges a 2.7% foreign transaction fee (see rates and fees), so while it’s a great option for use in the U.S., you shouldn’t use it when you’re traveling abroad.
Learn more: Blue Cash Preferred Card from American Express
Citi Double Cash Card: Best for balance transfers
Sign-up bonus: N/A
Rewards rate: Earn 2% cash back — 1% when you buy and another 1% as you pay your bill each month.
Annual fee: $0
Why we chose it: One of the simplest and most rewarding cash-back cards out there is the Citi Double Cash Card. This card gives you 1% cash back when you buy and then another 1% as you pay. You only need to make the minimum payment each month to earn the second reward, but remember that paying your balance in full is always strongly recommended. Cardholders can now convert the cash back they earn to ThankYou Points via a linked ThankYou account.
This converts into an effective 2x ThankYou Point earning rate on all purchases. TPG values ThankYou points at 1.7 cents each, meaning this card would effectively get at 3.4% return on all purchases. Unfortunately, you won’t earn a welcome bonus with this card, but the long-term value it offers still makes the card worth it in my eyes. Read our full card review.
Learn more: Citi Double Cash Card
Chase Freedom Unlimited: Best for intro APR
Sign-up bonus: Earn a $200 bonus after spending $500 in their first three months, plus earn 5% back on the first $12,000 spent at grocery stores in your first year
Rewards rate: Earn unlimited 1.5% cash back on purchases.
Annual fee: $0
Why we chose it: In addition to a solid bonus and earning structure built for everyday spending, the Chase Freedom Unlimited offers a 0% APR introductory period for 15 months on new purchases (14.99%–23.74% variable APR applies after). This way you can earn rewards while financing large purchases — just make sure you’re paying off your balance before the end of the intro APR period to avoid paying interest.
The Chase Freedom Unlimited is also a great card to pair with your existing Chase credit cards to earn rewards on non-bonus spending — in fact, it makes up one-third of the Chase Trifecta. If you have an Ultimate Rewards credit card like the Chase Sapphire Preferred Card or Chase Sapphire Reserve, you can combine rewards and take advantage of 25% to 50% Chase travel portal redemption bonuses and transfer partners. Since TPG values Ultimate Rewards points at 2 cents each, you’ll get a 3% return on all non-bonus spending when you pair the Freedom Unlimited with a Chase Ultimate Rewards card. Keep in mind, this card is also about to get a set of new bonus categories.
Learn more: Chase Freedom Unlimited review
Capital One Savor Cash Rewards Credit Card: Best for dining and takeout
Sign-up bonus: $300 bonus after you spend $3,000 on purchases in the first three months of account opening.
Rewards rate: Earn 4% cash back on dining and entertainment, 2% at grocery stores and 1% on everything else.
Annual fee: $95
Why we chose it: If you spend a lot on dining and entertainment, you can’t get much better than the Capital One Savor. Dining encompasses restaurants, cafes, bars, fast food joints, bakeries and more. Meanwhile, entertainment will earn you 4% on a long list of purchases that includes concert tickets, movie tickets, sporting events, theme parks, certain tourist attractions and more. Of course, right now you’re probably not attending many events like that but you will again once the threat of COVID-19 subsides.
Capital One Spark Cash for Business: Best for business cash-back
Sign-up bonus: $500 bonus after spending $4,500 in the first three months from account opening.
Rewards rate: 2% cash back on all purchases
Annual fee: $95, waived the first year
Why we chose it: The value in the simplicity of cash-back business cards can’t be overstated. While transferable points can be more valuable, it can be incredibly time-consuming to extract that extra value. Also, when it comes to travel credit cards, the rewards can often only be used for travel — and you might not be doing a lot of that right now. Sometimes your business might need that extra cash for other expenses.
What makes this card even better is it earns an unlimited 2% cash back on every purchase. You don’t need to juggle multiple cards as you try to maximize specific bonus categories. Simply swipe the Spark Cash and enjoy a straightforward return on every purchase.
Learn more: Capital One Spark Cash for Business
Ink Business Cash Card: Best for small business spending
Sign-up bonus: $500 cash back after you spend $3,000 on purchases in the first three months from account opening.
Rewards rate: 5% back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year. You’ll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year and you’ll get an unlimited 1% cash back on everything else.
Annual fee: $0
Why we chose it: This is a very rewarding small business credit card with a large welcome bonus and generous bonus categories — all with no annual fee. If you max out your bonus spending in both 5% and 2% categories, that ends up being $1,750 in cash-back rewards earned each year. For a no-annual-fee credit card, that’s great potential for earned rewards. Of course, if you’re pairing this card with a Chase Ultimate Rewards card (including all other Chase Ink Business cards), your rewards could be more valuable when used for travel as that $1,750 turns into $3,500 in potential travel rewards value. Though, keep in mind that Chase is currently requiring a sign-in before applying, so only existing Chase customers can currently get this card.
Learn more: Ink Business Cash review
Bank of America Cash Rewards credit card: Best for online shopping
Sign-up bonus: $200 cash-back bonus after you spend $1,000 within the first 90 days of account opening.
Rewards rate: 3% cash-back in the category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement and furnishings) and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined bonus category purchases each quarter (then 1%). You can change your 3% category once a month.
Annual fee: $0
Why we chose it: Having the option to get a 3% bonus on online shopping across a wide variety of retailers is terrific. Plus, depending on your banking relationship with Bank of America, that 3% return can go as high as 5.25% back if you qualify for the top tier of the Preferred Rewards program. If your spending habits change throughout the year, the Bank of America Cash Rewards card should definitely be on your radar.
Learn more: Bank of America Cash Rewards credit card
Blue Cash Everyday® Card from American Express: Best for beginners
Sign-up bonus: Earn $150 after spending $1,000 in the first three months
Rewards rate: Earn 3% cash back at U.S. supermarkets (up to $6,000 annually; then 1%), 2% on U.S. gas stations and U.S. department stores, 1% on everything else
Annual fee: $0 (see rates and fees)
Why we chose it: Beginners to the rewards game will appreciate the Blue Cash Everyday’s no annual fee and simple rewards structure. You’ll also get 0% intro APR on purchases for 15 months from the date of account opening, then a variable APR, 13.99% to 23.99%). While it’s certainly not as lucrative from an earning perspective as the Blue Cash Preferred, it is a great option for those just jumping into the cash back rewards game for the first time.
Learn more: Blue Cash Everyday Card review
Wells Fargo Propel: Best for commuters
Welcome bonus: Earn 20,000 points after you spend $1,000 on purchases in the first three months of account opening.
Rewards rate: Earn 3x on dining (eating out and ordering in), gas stations, transit, travel and select streaming services; 1x on everything else.
Annual fee: $0
Why we chose it: Though the Wells Fargo Propel technically earns points, not cash back, these points are redeemed at a fixed-value, making the card similar to others on this list. It’s a great card for beginners. You don’t pay an annual fee, plus you earn 3x on a number of common spending categories.
While points and miles gurus might get frustrated with points that are only worth 1 cent each, beginners won’t have to memorize award charts or research transfer partners in order to maximize a redemption.
Learn more: Wells Fargo Propel review
Cash-back credit cards that require a membership
Some credit cards have specific membership requirements. The following cards can be good options, but I’ve left them off the main “best cash-back cards” list due to their membership requirements:
- Costco Anywhere Visa® Card by Citi: 4% on eligible gas (on up to $7,000 per year; then 1% thereafter), 3% on restaurants and eligible travel purchases and 2% at Costco. The card has no annual fee if you have a paid Costco membership.
- Fidelity Rewards Visa Signature Card: 2% on all purchases with no annual fee (must have a specific Fidelity account).
- Sam’s Club Mastercard: 5% on gas (on up to $6,000 per year, then 1% thereafter) and 3% on dining and travel. The card has no annual fee (must have a Sam’s Club membership, must visit Sam’s Club location to redeem and cash back capped at $5,000 annually).
- USAA Cashback Rewards Plus American Express® Card: 5% on the first $3,000 on combined gas and U.S. military base purchases annually. Earn 2% on the first $3,000 on grocery purchases annually with no annual fee (must be a USAA member).
- Amazon Prime Rewards Visa Signature: 5% return on Amazon and Whole Foods purchases, 2% back on restaurants, gas stations and drug stores (must be an Amazon Prime member).
The information for the Fidelity Rewards Visa, Sam’s Club Mastercard, USAA Cashback Rewards Plus American Express® Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Choosing the best cash back credit card for you can take a lot of research and become really overwhelming. At TPG, we try to make the research process as simple as possible. We spend hours combing through the credit cards available from our partners and from outside our network, comparing them to see which cards offer the best return for readers. Here are a few of the factors we look at when choosing the credit cards on our best cash back cards guide:
- Rewards rates – First and foremost, we look at which cards can help you earn the most rewards in top spending categories such as groceries, gas, and everyday spending.
- Sign-up bonus – What kind of sign-up bonus cards offer is another factor we consider when choosing our cards. While having a bonus isn’t a requirement to make the list (hello, Citi® Double Cash Card), a sign-up bonus can greatly increase the overall value of a card in its first year.
- Annual fee – We make sure we include cards that have no annual fee as well as some that do come with an annual fee in exchange for higher rewards rates. Whether your budget can justify paying an annual fee or not, you’ll find a great card for you in our guide.
- 0% APR periods – Many top cash back cards come with a set period of time when new purchases, balance transfers or both come with a 0% APR intro period. For anyone looking to consolidate debt or finance a large purchase, these cards are excellent ways to earn money while saving on interest rates.
- Pairability – We also consider how these cards fit into a larger credit card strategy. Can you convert your rewards to transferable currencies within the card family? Does it compliment the spending categories of other cards? These are questions that help determine how “pairable” a card is with others.
How do cash-back credit cards work
Cash-back cards reward you a percentage (usually somewhere between 1% and 5%) of each purchase. Those rewards are pooled into an account as cash back, which you can then use as a statement credit or have deposited into your bank account. Cash back offers a more straightforward way of earning and redeeming rewards compared to points and miles.
Rather than having to keep up with point valuations and transfer partners, you always know what you’re getting with cash back in terms of value and redemption options. However, this can also mean that cash back is more limited. Points and miles can often be redeemed at a far greater value than just 1 cent per point. But if you’re looking for an easy way to earn rewards that can be used for anything, cash can be the best option.
Common types of cash-back credit cards
With so many cash-back card options, it can be hard to narrow down which card might be right for you. To start, I would take a look at which type of cash-back card you want. Here are a few common types and the advantages of each:
Flat-rate: These are cards that earn the same rewards rate across all spending. An example is the Citi Double Cash because you’re earning the same 2% across all categories (1% when you make purchases, 1% as you pay your bill). A flat-rate card is great for everyday spending because you don’t have to juggle specific bonus categories, but it does limit your earning potential on popular categories such as dining or travel.
Tiered: Similar to most travel credit cards, these cash-back cards offer higher bonus earnings for specific, static categories. For example, the Blue Cash Preferred offers 6% cash back on one set of categories, 3% on others and 1% on non-bonus spending. While these cards are excellent for maximizing rewards for categories you spend a lot on each month, you won’t necessarily earn bonus rewards on every purchase. These are best to pair with a flat-rate or complementary tiered card.
Rotating categories: Rotating category cards typically offer 5% cash back on certain categories that shift every quarter. The Chase Freedom and Discover it Cash Back are both examples. While 5% is an excellent bonus rate, keep in mind that these cards typically limit your bonus earning to $1,500 each quarter you enroll and you have to activate new categories each quarter.
Choose-your-categories: A newer cash-back category that has sprung up in recent years is the choose-your-categories cash-back card. These are cards that allow you to choose the category (or categories) that you earn your bonus rewards in each month. I personally love these cash-back cards because they allow you to customize your rewards structure in a way other cards do not. This type of card is great if your spending habits change throughout the year. The Bank of America Cash Rewards credit card is one example of such a card.
How to choose a cash-back credit card
What things should you look for when you’re comparing credit cards that offer cash back? Here are some factors to consider:
- Earning rates: How much cash back will you earn? Is it consistent across all purchases, or does the card restrict the best rates to specific types of purchases? Since cash back by definition provides you with money to go back in your wallet, there isn’t any way to truly “maximize” the points or miles you earn. Instead, be sure to evaluate the exact earning rates compared to your typical spending patterns.
- Ease of redemption: Not all cash-back cards are created equally when it comes to actually getting the cash in your hands or bank account. Some post rewards automatically to your statement, while others earn you points/miles that can then be redeemed for cash back or for statement credits to offset specific purchases. Be sure to read the terms and conditions of the rewards program carefully so you know how (and when) you’ll actually get the funds.
- Additional perks: A third factor involves the additional card perks and features. Does it incur foreign transaction fees? What about coverage and added protection for your purchases or trips? These benefits can add significant value to a card.
- Annual fee: A final aspect to consider is any possible annual fee. Some cash-back cards don’t charge an annual fee, but others do. It’s critical to crunch the numbers to see if the annual fee is offset by the earning rates on the card.
Maximizing cash-back rewards
Cash back sometimes gets a bad reputation in the travel rewards game because it’s not as easy to maximize. While you can’t redeem cash back for the same value as Chase Ultimate Rewards points or Amex Membership Rewards points, cash back is still a valuable tool for when money is tight or you just want a simple earning structure.
Cash back can also be deposited into a high-yield savings account to build up your emergency fund. You can invest your cash back for long-term gains and an early retirement nest egg. Even if you’re a frequent traveler, a cash-back card can help you build a cash fund for components of vacations that can’t be covered with airline miles.
The credit card rewards game isn’t all or nothing when it comes to earning miles or cash back. You can have a card for each, or even a card that does a little bit of both.
Cash-back cards have played an integral role in my overall credit card strategy, helping me offset the cost of travel expenses that points and miles don’t cover. Plus, there’s no doubt that earning cash back can be simpler and easier to quantify — something casual travelers and beginners can both appreciate.
Additional reporting by Katie Genter.
Featured image by Bloemenmarkt/Getty Images.
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