Credit Cards » Compare Credit Cards » The Best Cash Back Credit Cards of 2021
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The Best Cash Back Credit Cards of 2021

Cash back rewards credit cards can save you money every time you shop, from 1% cash back up to 6%. Find the best card for your spendings.

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When it comes to getting a credit card, you want to know that you have the best one for your personal needs and wants. One option are cards that offer a cash back perk for using your card.

Cash back cards actually pay you money for various things from making purchases and paying your bill on time. The biggest hurdle is just finding the perfect card for you and your budget.

With this being said, it actually pays to do a little bit of research before making a commitment to a card. There are so many variants in cash back cards such as some cards offering rewards for traveling, buying groceries, online shopping, car maintenance, and even more.

With all these options we can see where it would be really easy to get confused, especially when it comes to reading the terms and conditions that like to use strange phrasing and big words. That is why we have compared the best cash back cards, just to help you find the right one for you.

Here are The Smart Investor Select’s picks for the top cash back credit cards:

Amazon Prime Rewards Visa Signature

On Chase Secure Website

Amazon Prime Rewards Visa Signature

Reward details

5% at Amazon.com and Whole Foods Market, 2% cash back on restaurant, gas, and drugstores, 1% cash back on all other purchases.
1-5% cash back

Current Offer

Get a $100 Amazon Gift Card instantly upon credit card approval
$100 amazon gift

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

None

APR

14.24% – 22.24%
  • Overview
  • Card Features
  • Pros & Cons

The Amazon Prime Rewards Visa Signature Card has great benefits for people who are avid Amazon shoppers. The card is offered through Chase Bank, and there is no annual fee.

With the Amazon Prime card, you earn 5% cash back reward on all Amazon purchases invluding whole foods market, 2% cash back on restaurant, gas, and drugstores, and 1% cash back on all other purchases.

In addition, you’ll get get a $70 Amazon gift card instantly upon credit card approval.However, you have to be an Amazon Prime member to hold the Amazon Prime Rewards Visa Signature Card, which has an annual fee of $119. The 5% rewards rate on all Amazon purchases is alluring for Amazon shoppers, but there are drawbacks and limitations to the card.

  • APR: 14.24% - 22.24%
  • Annual fee: $0
  • Balance Transfer Fee: 5%
  • Foreign Transaction Fee: None
  • Rewards Plan: 5% at Amazon.com and Whole Foods Market, 2% cash back on restaurant, gas, and drugstores, 1% cash back on all other purchases.
  • Sign Up bonus: Get a $100 Amazon Gift Card instantly upon credit card approval
  • 0% APR Introductory Rate: None
  • Good Cashback Reward Points
  • Great Sign-Up Bonus
  • No Annual Fee
  • Better APR Than Other Cards
  • No Transfer Options
  • Links to Only One Amazon Account
  • Slow Processing Time and Many Fees
  • High Balance Transfer Fee

Capital One Quicksilver

Capital One Quicksilver Card review

On Capital one Secure Website

Capital One Quicksilver

Reward details

Unlimited 1.5% cash back on all purchases.
Unlimited 1.5% cash back on all purchases

Current Offer

Earn a one-time $250 cash bonus once you spend $500 on purchases within 3 months from account opening
$250

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

0% intro APR for 15 months

APR

15.49% – 25.49%
  • Overview
  • Card Features
  • Pros & Cons

The capital one quicksilver card is a very good choice for individuals that either don’t like to spend too much in just one budget category or individuals that prefer one reward rate than multiple rates. The capital One Quicksilver is among the secured credit cards that do not charge any annual fee. The Mastercard is widely accepted abroad compared to most other card brands. Some of the benefits individuals can derive from using this card include; no foreign transaction fees, travel accident insurance, secondary car rental insurance and 24-hour travel assistance services.

Capital One ranked 5th with a rating of 808, according to the J.D. Power Customer Satisfaction Study in 2020.

 

  • Rewards Plan: Unlimited 1.5% cash back on all purchases.
  • APR: 15.49% - 25.49%
  • Annual fee: $0
  • Balance Transfer Fee: 3%
  • Foreign Transaction Fee: 3%
  • Sign Up bonus: Earn a one-time $250 cash bonus once you spend $500 on purchases within 3 months from account opening
  • 0% APR Introductory Rate period: 0% intro APR for 15 months
  • Sign-Up Bonus
  • High Rewards Rate
  • No Annual Fee or Foreign Transaction fee
  • Intro APR on Purchases & Balance Transfers
  • No Bonus Rewards Categories
  • Requires Good/Excellent Credit
  • High APR

Capital One Savor Rewards

Capital One Savor Card Review

On Capital one Secure Website

Capital One Savor Rewards

Reward details

Unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
Unlimited 1-4% cash back

Current Offer

$300 cash bonus once you spend $3,000 on purchases within 3 months from account opening
$300

Credit Rating

Good – Excellent

Annual Fee

$95

0% Intro

None

APR

15.99% – 24.99%
  • Overview
  • Card Features
  • Pros & Cons

The Capital One credit card is the Savor card, which offers an increased 4% rate on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Rewards don’t expire for the life of the account, and you can redeem cash back for any amount.

In addition, there is a significant sign up bonus of one-time $300 if you spend $3,000 in first 3 months cash bonus once you spend $3,000 on purchases within 3 months, as well as $0 intro fee for the first year and no foreign transaction fee.

However, if you don’t spend enough on these types of activities then you won’t get ahead much on the rewards due to the annual $95 fee. 

 
  • Rewards Plan: Unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
  • APR: 15.99% - 24.99%
  • Annual fee: $95
  • Balance Transfer Fee: 3% 
  • Foreign Transaction Fee: None
  • Sign Up bonus: $300 cash bonus once you spend $3,000 on purchases within 3 months from account opening
  • 0% APR Introductory Rate period: None
  • $300 Sign Up Bonus
  • Unlimited 4% Cash Back
  • No Rotating Categories
  • $95 Annual Fee
  • Approval Can Be Strict

Chase Freedom Flex

Chase Freedom review

On Chase Secure Website

Chase Freedom Flex

Reward details

1-5% cash back

Current Offer

$200 Cash Back

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

15 months

APR

14.99% – 23.74%
  • Overview
  • Card Features
  • Pros & Cons

If you have a high credit score and want a card to capture your spending habits with no extra cost. It has a $0 annual fee, and only individuals with credit scores of between 690 to 850 can qualify for the card. The first 15 months attract zero interest on purchases, which is an incentive for you to spend high.

You will earn a $200 cash bonus for every $500 you spend within the first 90 days and a 5% cashback on grocery and online purchases. You will also enjoy a 5% cash back for every $1500 cumulatively spent while using the card. The card issuer has a 2020 rating of 809 from J.D. Power, which places it fourth among 11 rated card issuers.

 
  • Rewards Plan:
  • APR: 14.99% – 23.74%
  • Annual fee: $0
  • Balance Transfer Fee: $5 or 5%
  • Foreign Transaction Fee: 3%
  • Sign Up bonus:
  • 0% APR Introductory Rate period: 0% intro APR for 15 months from account opening on purchases.
  • $200 Sign Up Bonus
  • No Annual Fee
  • 0% APR on Balance Transfers and Purchases
  • Pool Points & Other Bonuses
  • Protection & Free Credit Score
  • 5% Bonuses has a Cap
  • High APR
  • Balance Transfer Fee
  • Foreign Transaction Fee

Costco Anywhere Visa

Citi-costco-anywhere-visa-credit-card review

On Citi one Secure Website

Costco Anywhere Visa

Reward details

4% cash back on gas purchases (both at Costco and other gas stations) on up to $7,000 of spending a year, then 1% back + 3% cash back on restaurants and most travel purchases, 2% cash back at Costco and Costco.com, 1% cash back on all other purchases
1-4% cash back

Current Offer

None
No Sign Up bonus

Credit Rating

Good – Excellent

Annual Fee

None ( $60 Costco membership fee)

0% Intro

None

APR

15.24%
  • Overview
  • Card Features
  • Pros & Cons

This card is an amazing choice for regular Costco shoppers who want to earn a highly competitive cashback rewards on travel, dining and gas. Costco Anywhere Card does not charge any fee on foreign transactions and does not charge any annual fee. The card offers a huge 4% cashback on gas purchases, 3% cashback on eligible restaurant and travel as well as a 2% cashback on purchases at the Costco store and a 1% cashback on all your purchases.

To enjoy all these benefits, all you need to do is pay your annual Costco membership fee to maintain your card account. Some of the limitations attached to this card usage include; limited cashback redemption option and a cap on gas rewards.

 
  • Rewards Plan: 4% cash back on gas purchases (both at Costco and other gas stations) on up to $7,000 of spending a year, then 1% back + 3% cash back on restaurants and most travel purchases, 2% cash back at Costco and Costco.com, 1% cash back on all other purchases
  • APR: 15.24%
  • Annual fee: None ( $60 Costco membership fee)
  • Balance Transfer Fee: 3% or 5$
  • Foreign Transaction Fee: None
  • Sign Up bonus: None
  • 0% APR Introductory Rate period: None
  • Cashback on Costco, Gas, Restaurants and Travel and Other Spending
  • No Annual Fee
  • No Foreign Transaction Fee
  • Extended Manufacturer Warranty, Travel Perks
  • Redemption Restrictions
  • No Sign-Up Bonus or 0% APR Introductory Rate
  • There are Better Cashback Cards
  • High APR

Citi Double Cash

Citi Double Cash Credit Card Review
On Citi Secure Website

Citi Double Cash

Reward details

Earn cash back twice on every purchase with unlimited 1% cash back when you buy + 1% as you pay for those purchases.
Up to 2X points for every $1 you spend

Current Offer

None
60,000 bonus points

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

18-month

APR

13.99% – 23.99% 
  • Overview
  • Card Features
  • Pros & Cons

Looking for a credit card issuer that offers an unrivaled flat-rate cash back rewards on all your purchases with no annual fee and a straightforward reward structure, then look nowhere else; Citi Double Cash is the best for you. You can get up to 1% cashback when you use the card plus an additional 1% whenever you make a payment. The flexible redemption options of this card make it a potentially lucrative option for its users. Some of the benefits you can get from using this card include an outstanding cashback on unlimited purchases and generous intro APR on balance transfers. However, this card does not provide a one-time offer.

Citi ranked 6th out of 11 card issuers with a score of 801, according to the 2020 J.D. Power Credit Card Customer Satisfaction Study.

  • Rewards Plan: Earn cash back twice on every purchase with unlimited 1% cash back when you buy + 1% as you pay for those purchases.
  • APR: 13.99% - 23.99% 
  • Annual fee: $0
  • Balance Transfer Fee: $5 or 3%
  • Foreign Transaction Fee: 3%
  • Sign Up bonus: None
  • 0% APR Introductory Rate period: 18 months
  • Simple and Generous Rewards System
  • Competitive Balance-Transfer Policy
  • Fee Waiver on First Late Payment
  • No Annual Fee
  • No Sign-Up Bonus
  • No Intro 0% APR on Purchases
  • Balance Transfer Fee
  • Foreign Transaction Fee

Discover It Cash Back

Discover It Cash Back review

On Citi one Secure Website

Discover It Cash Back

Reward details

5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum + 1% cash back on all other purchases
1-5% cash back

Current Offer

2x cash back with cashback match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically
Match Bonus for the first 12 months

Credit Rating

Good – Excellent

Annual Fee

$0

0% Intro

0% Intro APR for 14 months on purchases and balance transfers.

APR

11.99% – 22.99%
  • Overview
  • Card Features
  • Pros & Cons

Discover It Cash Back was awarded the 2020 U.S. News Best Credit Card for the cashback rewards card. This card offers a very high rewards rate on some categories that rotate every few months. The card gives a 5% cashback on any purchase that is up to $1,500, which is spent each quarter on the rotating bonus category. Some of the categories include; restaurant, gas station, online shopping and many more each time you activate them. However, on all other purchases, excluding the ones in the category selected, you will only receive a 1% cashback.

This card is best for individuals who want to have a high reward rate on every purchase they made and also individuals who love a more straightforward rewards program.

 
  • Rewards Plan: 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum + 1% cash back on all other purchases
  • APR: 11.99% – 22.99%
  • Annual fee: $0
  • Balance Transfer Fee: 5%
  • Foreign Transaction Fee: 3%
  • Sign Up bonus: 2x cash back with cashback match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically
  • 0% APR Introductory Rate period: 0% Intro APR for 14 months on purchases and balance transfers.
 
  • 14 Month 0% Intro APR Period
  • Balance Transfer Fee
  • 5% Cash Back for Select Spending Categories
  • Matches Cash Back in the First 12 Months
  • No Annual Fee
  • Less Merchant Acceptance
  • No Sign-Up Bonus or 0% APR Introductory Rate
  • Limit on Cash Back Spending Per Quarter
  • Keeping Track of Bonus Categories

U.S. Bank Cash+ Visa Signature

U.S. Bank Cash+ Visa Signature Card

On US Bank Secure Website

U.S. Bank Cash+ Visa Signature

Reward details

5% cash Back on your first $2,000 in combined eligible purchases each quarter on two categories you choose, 2% cash back on one everyday category, like gas stations, grocery stores or restaurants, 1% cash back on all other eligible purchases.
1-5% cash Back

Current Offer

75,000 bonus points after you spend $3,000 on purchases in the first 3 months from account opening
$200 rewards bonus

Credit Rating

Good – Excellent

Annual Fee

None

0% Intro

None

APR

13.99% – 23.99%
  • Overview
  • Card Features
  • Pros & Cons

U.S. Bank Cash+ Visa Signature Card is a Visa credit card issued through one of the largest US lending institutions, U.S. Bank.

With the U.S. Bank Cash+ Visa Signature Card you can earn 5% cash Back on your first $2,000 in combined eligible purchases each quarter on two categories you choose, 2% cash back on one everyday category, like gas stations, grocery stores or restaurants, 1% cash back on all other eligible purchases..

This card also has a generous sign-up bonus and an 12 months introductory 0% rate on balance transfers, and the card has no annual fee. U.S. Bank Cash+ Visa Signature card offers a $200 rewards bonus after you apply online and spend $500 in eligible purchases within the first 90 days of account opening.

 

  • APR: 13.99% - 23.99%
  • Annual fee: None
  • Balance Transfer Fee: $5 or 3%
  • Foreign Transaction Fee: 2-3%
  • Rewards Plan: 5% cash Back on your first $2,000 in combined eligible purchases each quarter on two categories you choose, 2% cash back on one everyday category, like gas stations, grocery stores or restaurants, 1% cash back on all other eligible purchases.
  • Sign Up bonus: $200 rewards bonus after you apply online and spend $500 in eligible purchases within the first 90 days of account opening.
  • 0% APR Introductory Rate period: None
  • Cashback Sign-Up Bonus
  • 5%,%2, %1 Cash Back
  • 0% APR Introductory Rate on Balance Transfers
  • Choose Spending Categories
  • Visa Signature Card
  • Restriction on Cash Bonuses
  • 2%-3% Foreign Transaction Fee
  • Balance Transfer Fee
  • Opt in Every Quarter
  • 0% Introductory Rate Applies Only to Balance Transfers
  • Visa Signature Card

Understand How Cashback Credit Cards Work

What is a Cashback Rewards Credit Card?

Cashback is a perk that many credit card companies bundle on some of their reward credit cards. It works by giving back a percentage of the money the cardholder spent on their credit card.

Some cards will even allow their cardholders to earn more cash back on purchases if they enroll in quarterly promotions or if they shop through their virtual shopping portals. There are three types of common cashback credit cards.

  • Flat-rate. The cardholder will receive fixed percentage cashback on their purchases regardless of the amount or spending category.
  • Tiered. The amount of cashback that the cardholders receive will vary depending on the spending category and these categories remain constant.
  • Rotating categories. This works initially like a flat-rate cashback card but they give bonus cash back on purchases from particular categories that the issuers change every quarter. 

Take note that issuers put a cap or limit to how much cashback a cardholder can earn through promotions or quarterly rewards programs. 

For example, the card may allow you to get 6% cash back on purchases at Amazon but for a maximum aggregate purchase of up to $1,500 only for the quarter. Make sure you fully understand the terms and conditions of the cashback offer so you can maximize its benefits. 

When to Consider a Cashback Rewards Card?

Cashback cards are good for you if your fit a certain cardholder profile. It’s best if you don’t carry a balance, spend at least $1,500 each month, want simplicity, and are not a fan of complex calculations.

As we said, they come in three varieties: flat-rate, tiered, and bonus category. Flat-rate cards will pay the same percentage on every purchase. Bonus category cards give a higher rate in categories that change from time to time and a flat 1% on the rest. Tiered cards give higher percentages on specific types of purchases like gas, groceries, or restaurants but 1% on others. 

If your spending budget is skewed towards certain categories such as gas or groceries, a tiered or bonus category card is most appropriate. If you want to avoid the hassle of keeping track of which of your cards have bonus categories, just go for a flat-rate card.

How to Redeem Cash Back Rewards?

Redemption of cashback is very convenient because you can do it through your online credit card account or by getting in touch with your card issuer.

Card issuers would often set a redemption minimum and $25 seems to be the most common. The method for redemptions vary but they fall more or less into one or more of the following choices:

  • Statement credit. This is probably the easiest cashback redemption method. With this, you can get a statement credit that effectively lowers your credit card bill.  To illustrate, let’s say you have built up a $400 in cashback bonus and have a current $1,000 bill on your card, you can redeem the $400 and apply it to your bill. That means you’d only have $600 left on your balance. It’s so simple and the reward value is very straightforward – that’s what makes it a very popular option.
  • Paper check or direct deposit. You can log in to your issuer’s website and pick this option to get your cash back rewards in the form of a paper check that the issuer will mail to you. Or, another option is to have them deposit the cash directly to your checking or savings account. 
  • Gift cards. There are card companies that will give you additional value for your cashback by giving you gift cards or eCertificates that you can use with popular merchants.
  • Charitable donations. Some card issuers will let you use all or some of your cashback as a donation to a charity of your choice.

 

Which Factors Should You Consider?

1. Rewards & earn rate.

Realistically, how much cash back can you earn? Is the rate uniform across all purchases? Or does your card offer better rates for specific types of purchases? By definition, cashback should provide you with money that will add to your funds but there isn't really a hard and fast way to maximize the points or miles your earn.

What you can do is evaluate your exact earning rates concerning your habitual spending patterns. And make sure you review the extra perks that your card gives out.

Do they charge or waive foreign transaction fees? Do you get added protection for your purchases and travels? Benefits like these make your card even more valuable.

2. Fees. If you can pay off your balance each month, you won't have to worry about interest charges. You can focus on improving your credit in the meantime – and then ask your card company to lower your interest rate later on.

Each card company will have its own set of charges. But there's no need to read all the fine prints from end to end to know all these charges. Most credit cards will list their most common fees in a prominent area in their marketing materials. Some of the fees worth looking into more closely are:

  • Annual fee. The annual fee is what you pay for the convenience of being able to use a credit card. Some cashback rewards credit cards do not collect an annual fee.
  • Balance transfer fee. You have to pay this fee when you do a balance transfer which is a transaction that lets you transfer your balance from your old card to your new one. The fee is a percentage of the balance that you are transferring and it usually runs from 3% of the transaction amount or $5, whichever is higher. So, the more balance you transfer, the higher the transfer fee you need to pay.
  • Cash advance fee. You have to pay this fee when you make a cash advance or an equivalent transaction. Take note that overdraft protection and credit card convenience checks are also part of cash advance transactions.
  • Foreign transaction fee. When you make a purchase in foreign currency, you will have to pay this fee. Remember that your issuer can charge you this fee wherever your location is as long as your transaction is in a currency other than U.S. dollars.

Your Credit Limit Matters

The ideal credit limit should provide you with the flexibility you need but it should not be so high that it would plunge you into credit card debt. If you are a college student, set your eyes on a low-limit card because you are just learning to use your card for the first time.

After you graduate, you can ask for a higher limit because your monthly expenses may rise. Having a higher limit would help you build your credit over time because spending a lower percentage of your credit limit every month will do wonders for your score. 

But know your capacity. If you have not been very responsible with credit in the past, don’t go for a high-limit credit card because it may tempt you to take on more debt than you can comfortably handle.

Benefits 

It is obvious what the big advantage of a cashback credit card is – you can save (even a little) on every item that you buy. This might not be a big deal now, but in some cases, they will put all these rebates together and return them to you in a single annual payment.

So, if you spend around $20,000 a year on your cashback credit card, your total annual rebate could add up to some $1,000. Some issuers would add a cash bonus if you spend a certain amount within a specific time. The additional $50 to $200 they offer means more spending money for you.

Most cashback credit cards would have sign-up bonuses that give you additional benefits when you first apply for your card. 

However, they often require that you spend X amount in a set period to get the bonus points. However, it’s a simple way to give your points balance a good head start. Just make sure that the spending requirement does not mess up your budget.

This is another important benefit of a cashback rewards card. You can get cash for all sorts of things. You can spend in almost any category, or choose the relevant categories for your lifestyle and still get cashback for your regular purchases. 

Also, many cards will have a simple accumulation method that won’t require complicated computations. 

One good thing about these rewards credit cards is that they often come with many additional features that add value to your account. 

You can get Price Match Guarantees, Purchase Protection Insurance, Complimentary International Travel Insurance, or access to airport lounges.

Drawbacks 

Here are the most important cons you should consider before applying:

Most of these cards will collect an annual fee. It would be good to do the math and see if you what you’ll be getting back in rewards is more than the yearly fee. 

Remember this rule: An annual fee is only worth it if you’re getting in rewards more than what you pay. And of course, more than you would if it was a no-fee card.

You’ll notice that many of the cashback rewards credit cards will charge as high as 26% APR.

This interest can build up materially and may cause serious financial injury to the cardholder.

Some card companies may set a maximum amount that a cardholder can get in cashback rewards per year. 

Remember that earnings in bonus categories are not automatic; there is usually an online enrollment process every quarter to qualify for them.

Requirements

The bad news is, most issuers will approve cashback rewards credit cards only to those with good or excellent credit. Consumers with the best credit scores benefit more because they can get the best cashback reward programs.

If your credit score isn’t so ideal, you may not qualify for any reward credit cards. Many of the good cashback credit cards are exclusive to a “prime” credit score of at least 630 points. It would be wise to not apply for any credit cards if you have a poor credit score and you can’t pay your bills on time. 

How to Maximize Your Cashback Rewards

1. Combine cards for optimum rewards

If switching among cards to maximize your rewards is not an issue with you, get cards that complement one another’s rewards systems.

For example, you can apply for a card that offers cash back for dining, another that gives you bonuses for shopping at Amazon, and a third one that gives a premium for gas and groceries. If your cashback card categories overlap, you’ll end up with a few useless ones in your wallet.

2. Track how you earn cashback

The trick in getting the most of your cashback credit card and earning the most miles of points possible is in taking advantage of every available bonus opportunity. For some cards, it will require you to track your spending and using your card to pay for every purchase that will give you cashback benefits.

3. Take advantage of rotating bonus categories

If your card offers rotating cashback bonus categories, don’t forget to activate or opt into the categories every quarter. This would entitle you to get 5% cashback on featured categories such as restaurants, gas stations, wholesale clubs, groceries, and more.

4. Look for sign-up bonuses

Some cards will have bonus miles that you can get if you spend a certain amount within the first few months of opening your new credit card. These sign-up bonuses are a great tool to get momentum in your point rewards buildup.

 5. Shop around for the best card for your needs

You should look for a credit card whose cashback rewards fit your spending patterns. Do you have a large, hungry family? Maybe a credit card that has a cashback on groceries will be good for you. Do you drive a lot because of work? A card that offers cash back on gas would be nice. If your all-around spending is about even, a simple flat-rate cashback credit card will do the trick.

Cashback Rewards Card Mistakes You Should Avoid

  • Not paying your bill in full at end of each month

Cashback cards are pretty worthless if you’re keeping a balance on them because they will cost you money in the long run. Every month, you will pay interest on that balance and often, the 26% APR will just eat up the 1% cashback that you’re getting.

Credit card companies know how to exploit your weakness of being a fund revolver when you rack up a balance. Try not to be weak because you’ll be sinking your money in the vaults of these bankers.

  • Buying things you wouldn’t buy if you had the cash.

The technique to profit from cashback credit cards is to not make unplanned purchases. Use the card to make normal, necessary everyday purchases that fit your overall budget.

  • Maxing out your credit card limit

It’s always financially risky to max out your credit cards. For one, the more you charge, the more difficult it gets to pay off the balance. Even if you just use 95% of your credit limit, it may not be enough to get you out of trouble in case a sudden emergency expense crops up. Plus, maxing out your credit card increases your credit utilization ratio as well.

Your credit utilization ratio tells bankers how fast you accrue your credit card debt and a high ratio is bad for your credit score. Lenders will rather stay away from borrowers with a utilization ratio above 30%. So, if you max out all your credit cards, it’s almost a safe statement to say that you are beyond the 30% benchmark.

Bottom Line

Not all cashback cards are the same. Don’t stop at the right card for you but rather, look for the best card for your situation. Try to get one with the highest potential cashback reward value compared to other cards. If you have this data, you can make a very intelligent decision on which cash back rewards credit card you should apply for.

Credit Card Reviews Methodology

In order to determine the best possible credit cards, we look at things like fees, interest rates and rewards. We do this with companies that are associated with us as partners as well as other offerings. From there, we make a decision about what the best card is related to different categories and needs. We focus on interest rate cost & fees, especially the cost of carrying a balance, rewards – cards accumulate rewards in different currencies—points, miles, cash back—and their values vary widely usability – cards that accept a wide range of credit profiles and offer simple solutions for things like checking your credit score or contacting. We also consider customer reviews.

We look at cards related to good or excellent credit ratings that will then provide a range of different benefits and improvements for someone who has these scores. We also look at low fees when it comes to those who have lower credit scores.