This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
Earning and redeeming points and miles can be a complex endeavor. Many of my friends and family members want to know how I travel so much, but when I start explaining the various strategies of multiple credit cards, transferable points and online shopping portals, their eyes inevitably start to glaze over. Fortunately, many card issuers provide simpler reward options, so today I want to go over the top cash-back credit cards to consider this year.
Before getting to the cards, I want to stress that the list below consists solely of products that are marketed as cash-back credit cards and that offer the best return on unrestricted cash redemptions. Many of the top travel rewards credit cards out there also allow you to earn cash back on your purchases; however, if you decide to redeem Amex Membership Rewards points for statement credits, that doesn’t exactly equate to getting maximum value from your redemption.
Many issuers also market options like the Barclaycard Arrival Plus World Elite Mastercard and Capital One Venture Rewards Credit Card as cash-back cards. However, the most valuable redemption for your miles on both of these is a statement credit that covers a travel expense. Since redeeming miles for straight-up cash back isn’t the best option, I have left these off the list.
Top Factors to Look at When Comparing Cash-Back Cards
So 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 equal 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 put your hands on the money.
- Additional perks: A third factor involves the additional perks provided on the card. 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. The majority of the cards below don’t charge an annual fee, but there are a handful of cash-back cards that do. It’s critical to crunch the numbers to see if the annual fee is offset by the earning rates on the card.
How to Know if a Cash-Back Card is a Good Fit for You
Given these factors, it can be quite challenging to determine if a card would make a good addition to your wallet. As a result, I’d recommend using the process of elimination. Start by looking at the four factors above and figure out which is most important to you. Then, start whittling away at the contenders. If you abhor annual fees, cross off cards that require an up-front investment. If you crave simplicity, ignore cards with confusing rotating bonus categories or convoluted redemption schemes. By focusing in on the perks that mean the most to you, you’ll be able to quickly narrow the list down to one or two contenders to earn a spot in your wallet.
So, which cash-back cards should be included on your initial list?
The Best Cash-Back Credit Cards:
- Chase Freedom: Best for Quarterly Bonus Cash Back
- Citi Double Cash Card: Best for Cash Back when you buy and when you pay
- Chase Freedom Unlimited: Best for flat-rate Cash Back
- Discover it: Best for 5% Bonus Cash Back on quarterly categories
- Capital One Quicksilver Cash Rewards Credit Card: No Foreign Transaction Fees
- Ink Business Cash Credit Card: Best for Bonus Cash Back on Business Categories
- Blue Cash Preferred Card from American Express: Best for Gas and Groceries
This card offers a standard 1% cash back on all purchases, which (obviously) isn’t that exciting. However, this earning rate jumps to 5% cash back on up to $1,500 in combined purchases at merchants in the card’s quarterly bonus categories. Previous quarters have awarded bonus points on mobile wallets, gas stations and cable purchases or Walmart and department stores, giving you a variety of options throughout the year.
The Freedom’s rewards actually accrue as points that are worth 1 cent apiece toward cash back; you can choose to deposit the cash into a bank account or apply it as a statement credit starting at 2,000 points ($20). However, this card becomes even more lucrative when it’s paired with a card that accrues Ultimate Rewards points, like the Chase Sapphire Preferred Card. If you link that card to the same Chase online account as the Chase Freedom, you can actually transfer the cash-back points from the Freedom to convert them into much more valuable (and transferable) Ultimate Rewards points. While the conversion is a manual process, it essentially means that you can earn 5 Ultimate Rewards points per dollar spent at a variety of merchants throughout the year.
Since the bonus categories are capped at $1,500 each quarter, here’s a comparison of how much you can earn if you max out purchases at these merchants each year:
- With an Ultimate Rewards card: $1,500 per quarter x 4 quarters x 5 points per dollar = 30,000 Ultimate Rewards points (worth $630 based on TPG’s most recent valuations)
- Without an Ultimate Rewards card: $1,500 per quarter x 4 quarters x 5% cash back = $300
As you can see, holding a card that earns Ultimate Rewards points more than doubles your return.
The Chase Freedom card is currently offering a sign-up bonus of $150 cash back after you spend $500 on purchases in your first three months from account opening. You’ll also earn an additional $25 bonus after you add your first authorized user and make a purchase within the same three-month period. The rewards never expire as long as your account is open and active, and the card carries no annual fee.
If all of that sounds like too much effort, one of the simplest and most rewarding cash-back cards out there is the Citi Double Cash Card. This card essentially gives you two opportunities to earn cash back: 1% 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 (and was #1 on my list of 10 commandments for travel rewards credit cards).
That’s it. There are no categories to keep track of and no bonuses to sign up for. You use the card and get 1% when you buy, 1% as you pay, and it also has no annual fee.
To actually get your hands on the cash, you have to wait until your cash rewards balance reaches $25. You then have four options:
- Request a check for at least $25 up to the total cash rewards balance at the time you redeem.
- Redeem for a statement credit to your card account for at least $25 up to the total cash rewards balance at the time you redeem.
- Redeem for a gift card in set denominations from the available inventory.
- Redeem for a credit to your linked Citi savings or checking account or to a checking account from which you have paid a Citi Credit Card bill at least two times.
Unfortunately, one of the biggest drawbacks of the card is a lack of a sign-up bonus, and it also charges a 3% foreign transaction fee. Still, cash back on everyday purchases with no limits can be a pretty solid value proposition (not to mention a very simple way to get started in the points and miles hobby).
If you’d prefer a combination of the first two cards on this list, consider applying for the Chase Freedom Unlimited. The card offers a consistent 1.5% cash back on every purchase you make, but like the regular Chase Freedom, the points you earn can also be converted into fully transferable Ultimate Rewards points if you also have a card like the Sapphire Preferred. Here’s how that would translate to rewards if you spend $10,000 per year on the card:
- With an Ultimate Rewards card: $10,000 x 1.5 points per dollar = 15,000 Ultimate Rewards points (worth $315)
- Without an Ultimate Rewards card: $10,000 x 1.5% cash back = $150
Once again, by using the Freedom Unlimited with an Ultimate Rewards-accruing card, you’re more than doubling your return. This also doesn’t factor in the bonus points you can earn by shopping through the Ultimate Rewards shopping portal, making this a great addition to your wallet.
4. Discover it
Another great cash-back option is the Discover it card. It (pun intended) doesn’t get a ton of press since it doesn’t have a maximization option like the Freedom, but the card does offer a standard earning rate of 1% cash back on all purchases, and it also has quarterly bonus categories that give cardholders 5% cash back on up to $1,500 in spending each quarter.
What makes this card especially appealing is the promotion for new cardholders. During your first year of cardmembership on the Discover it, you’ll enjoy double cash back on all purchases. This bumps the standard earning rate to 2% and the bonus category earning rate to 10%, though they will fall back down to the regular 1% and 5% levels after your first 12 months. This is (essentially) a sign-up bonus, though exactly how rewarding it is depends entirely on how much you spend.
You also have a number of options for putting your hands on the rewards:
- Gift cards or instant eCertificates from partners — starting at $20
- Charitable donation to select charities — starting at a penny
- Credit to your account — starting at a penny
- Electronic deposit into any account you designate — starting at a penny
- Pay with cash-back bonus at select online retailers — starting at a penny
Like the others on the list, this card carries no annual fee. However, it also imposes no foreign transaction fees on purchases made outside the US, making it a great option if you’re looking to keep earning cash-back when you travel abroad.
Another great option for traveling outside the US is the Capital One Quicksilver Cash Rewards Credit Card, as it too waives foreign transaction fees. You’ll also enjoy unlimited 1.5% cash back on every purchase, every day. The card is also offering a bonus of $150 after you spend $500 on purchases within the first three months.
The great thing about this card is the simplicity. You don’t need to worry about bonus categories or spending thresholds. It’s just a 1.5% return on all your spending. You also have the flexibility of getting your cash back as a statement credit or check, and you can do this on demand or on a specific schedule that you dictate.
If you’re looking for a business card that offers solid value from a cash-back standpoint, the Ink Cash is a terrific option. You’ll earn 5% cash 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 year. You’ll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account year plus 1% cash back everywhere else.
All of this is available without an annual fee, though there is a 3% foreign transaction fee for purchases made abroad. However, this card also works like the Chase Freedom. If you have the Ink Plus (no longer accepting new applicants), Ink Business Preferred Credit Card, Chase Sapphire Reserve or Sapphire Preferred, you can actually convert the cash-back points from the Ink Cash to much more valuable Ultimate Rewards points. This would essentially double the value you’d get from your spending, as TPG pegs these points at 2.1 cents apiece.
The card currently comes with a sign-up bonus of $500 cash back after you spend $3,000 on purchases in the first three months after account opening.
Another card with some intriguing bonus categories is the Blue Cash Preferred Card from American Express. You’ll get 6% cash back on purchases at US supermarkets (on up to $6,000 of spending each reward year, then 1%) plus 3% cash back at US gas stations, and 1% cash back everywhere else. These earnings accumulate as reward dollars and can be redeemed for statement credits when you have a rewards balance of at least $25.
The card has a $95 annual fee. It also includes a sign-up bonus of $200 back after you spend $1,000 in purchases on your new card in your first three months. It also charges a 2.7% foreign transaction fee, so while it’s a great option for use in the US, you’d be better off with some of the other options if you frequently travel outside the country.
Bottom Line: Best Cash-Back Credit Cards 2018
|Card||Bonus Rates||Flat Cash-Back Rate||Annual Fee|
|Chase Freedom||5% quarterly bonus on up to $1,500||1%||$0|
|Citi Double Cash Card||1% when you pay your bill||1%||$0|
|Chase Freedom Unlimited||Cash back points can be converted to Ultimate Rewards w/ Sapphire Preffered||1.5%||$0|
|Discover it||5% quarterly bonus on up to $1,500; double cash-back for first year||1%||$0|
|Capital One Quicksilver Cash Rewards Credit Card||–||1.5%||$0|
|Ink Business Cash Credit Card||5% at office supply stores*; 2% on gas and restaurants**||1%||$0|
|Blue Cash Preferred Card from American Express||6% at US supermarkets***; 3% on US gas stations and department stores||1%||$95|
*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 year.
**On the first $25,000 spent in combined purchases at gas stations and restaurants each account year.
***On up to $6,000 of spending each reward year, then 1%
My mother-in-law believes that “cash is king” and doesn’t want to waste her time with travel rewards programs. While I do disagree with her immediate dismissal of the points and miles world, there’s no doubting that earning cash back on your credit card can be simpler and easier to quantify. Hopefully this list has given you some food for thought if you’re just getting started in the hobby or plan on adding a cash-back card to your wallet.
All credit card photos by Eric Helgas for The Points Guy