How to Choose the Best Cash-Back Credit Card in 2024

How to Choose the Best Cash-Back Credit Card: Cash-back credit cards have become extremely popular because they give money back on everyday purchases. With so many options, finding the best cash-back card that perfectly fits your spending habits can take time and effort.

How to Choose the Best Cash-Back Credit Card

This post covers everything you need to know about choosing a cash-back rewards credit card, from types of cards to rewards rates and more.

Overview Cash-Back Credit Cards

Cash-back credit cards offer money back – cash rewards- on the purchases you make with the card. You can earn anywhere from 1-6% back or even more on specific spending categories. The cash rewards come as a statement credit, check, direct deposit into your bank account or redeemable points.

Choose the best Cash-back credit card, it provide an easy way to get extra money in your pocket while spending on your everyday purchases. The key benefit is that you earn rewards passively on expenses you’d be spending on anyway, like groceries, dining out, gas, bills, etc. It’s an automatic way to save money.

As you choose your cash-back card, focus on one that best matches your spending habits and has high rewards rates for those purchases. The right cash-back card can easily net you a few hundred dollars or more per year.

Types of Cash-Back Credit Cards

There are a few main types of cash-back rewards cards:

Flat-Rate Cards

Flat-rate cash-back cards offer the same flat rewards rate on every single purchase, typically 1-2%. It’s simple – you earn the same rate whether you’re buying groceries, paying bills or shopping on Amazon.

Pros: Easy to earn rewards without thinking about categories, good for those with diverse spending

Cons: Lower rewards rates than category cards

The Citi Double Cash card is one of the most popular flat-rate options, offering a straight 2% cash back (1% when you make a purchase and 1% when you pay it off).

Bonus Category Cards

Bonus category cards offer accelerated high rewards rates – usually 2-6% cashback or more – on certain categories of spending. Purchases outside of those categories earn a lower 1% rate. Categories may include groceries, dining, travel, gas, rotating bonuses, etc.

There are two types of bonus category cards:

  1. Fixed category cards – The bonus categories stay the same, like 5% back on groceries all year. Many cap rewards each year.
  2. Rotating category cards – The categories change every 3 months, allowing you to activate 5% bonuses that match your spending. The Discover It Cash Back card is a popular rotating category option.

Pros: Earn very high rewards rates on major spending categories

Cons: Lower rates on non-bonus purchases, more complicated

Factors to Consider When Choosing a Cash-Back Card

Keep these key factors in mind as you compare cash-back credit card options:

#1. Rewards Rates

The rewards rates are the biggest factor. Evaluate:

  • The flat rewards rate for flat-rate cards (aim for minimum 1.5% back)
  • The accelerated bonus category rewards rates (aim for 3-5% back minimum)
  • How much you spend in those bonus categories each year

Prioritize categories where you spend the most money.

#2. Sign-Up Bonus

Many cards offer a sign-up bonus if you spend a certain amount in the first 3-6 months. While nice to have, focus more on the long-term rewards rates.

#3. Annual Fee

Annual fees are uncommon on cash-back cards. Make sure any fee is easily justified by the card’s annual rewards.

#4. Redemption Minimums & Options

See how much cash back you need to redeem and how (statement credit, direct deposit, etc.). Cards with no minimums are ideal.

Best Cash Back Credit Cards of 2024

Based on your monthly expenses and the above factors, here are some of the best cash-back credit cards to consider right now:

Overall Flat-Rate Card: Citi Double Cash

  • Flat, unlimited 2% cash back (1% when you buy + 1% when you pay)
  • No annual fee
  • 0% intro APR for 18 months
  • $200 sign-up bonus after $1,500 spend in 6 months

This is one of the simplest and lucrative cash-back cards with no thinking required. You earn an easy straight 2% on every single purchase, no caps. It also has a generous sign-up bonus and an intro 0% interest offer.

Overall Bonus Category Card: Blue Cash Preferred® Card from American Express

  • 6% cash back at U.S. supermarkets (up to $6,000/year)
  • 6% cash back on select U.S. streaming services
  • 3% cash back on transit and U.S. gas stations
  • 1% cash back on other purchases
  • $0 intro annual fee for the first year, then $95
  • $250 statement credit sign-up bonus after $3,000 spend in 6 months

With 6% cash back on U.S. supermarket spending (on up to $6,000 per year, then 1%) and U.S. streaming services.

This card is perfect if you spend a lot on groceries and streaming. The gas and transit bonuses help too. Note the $95 annual fee applies after the first year.

Best No Annual Fee Category Card: Wells Fargo Active Cash Card

  • 2% cash rewards on purchases
  • No annual fee
  • $200 sign-up bonus after $1,000 spend in 3 months

For a flat 2% cash back across categories with no annual fee, the Wells Fargo Active Cash card is the way to go. It also has a $200 sign-up bonus after spending $1,000 within 3 months of account opening. Easy to maximize rewards.

Best Rotating Category Card: Discover It Cash Back

  • 5% cash back in rotating quarterly categories
  • 1% cash back on other purchases
  • Cashback Match – Discover matches all the cash back you’ve earned at the end of your first year
  • No annual fee

If you want to maximize category bonuses that shift every 3 months, the Discover It Cash Back card is ideal.

The rotating 5% cashback categories coupled with the Cashback Match make this card lucrative for strategic spenders who want to earn the most cash rewards possible without an annual fee.

How to Maximize Your Cash Back

Once you’ve chosen the best cash-back credit card for your wallet, make sure you use it strategically:

  • Use your cash-back card for as many purchases as possible
  • Focus spending bonus category purchases on your highest rewards rate card
  • Pay your balance in full each month to avoid interest charges
  • Leverage shopping portals and online discounts for additional savings on top of your cash-back rewards
  • Redeem your cash rewards at least annually for statement credits or direct deposit

Conclusion on How to Choose the Best Cash-Back Credit Card

Finding the right cash-back credit card involves comparing rewards rates, fees, redemption options and more – but this guide simplifies the process.

Focus on a flat-rate or bonus category card that aligns with your monthly budget and spending patterns.

Aim to earn at least 1.5% cash back across purchases with accelerated 3-6% bonuses in your top spending categories.

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