Which Credit Card Has the Best Cash Back?

One benefit that many credit cards offer is cash back. This is a percentage of each purchase that you make that is paid back to you via a credit to your account. Many people prefer cash back over other loyalty points options, such as airline miles, because cash back offers the most flexibility. Cash back benefits vary between credit cards, so if this benefit is essential to you, it's a good idea to shop around and find the best card for you and your family.

Evaluating Cash Back Credit Cards

Below are some things to think about when evaluating cash back credit cards and deciding which one to apply for colon

1. Interest rate: If you carry a balance on your credit cards, it is essential to understand how much interest you are paying on that balance. Any cash back benefits that you receive can be negated by what you'll pay in interest. If you are trying to decide between a low-interest card and a cashback card with higher interest rates, you'll probably save money going with the lower interest card, unless, of course, you don't ever carry a balance.

2. Fees: The next consideration is fees. Are there fees attached to your cash back card? As with interest, the fees you pay for the card may eat into any cashback benefits you receive.

3. Cash back percentage: What is the rate of cash back you receive on your purchases? Amounts can vary significantly, sometimes between different categories. For example, a cashback card may award you 1% cashback on most purchases, but may offer you 2% on gasoline purchases and up to 5% on rideshare rides. You know your spending habits best, so take them into consideration when selecting a card.

4. Comparison to other perks: in some cases, cashback may not be the best benefit for you. If you travel a lot, for example you may get a lot more value from a card that offers you airline miles. Crunch some numbers to determine which option will save you more money in the long run.

3. Cash back limitations: Some purchases may be excluded from cash back either because of the purchase itself or where you make the purchase. For example, a cashback card may offer you a 3% reimbursement on office supply purchases, but only if you purchase from one of a bank's approved office supply stores. You might also be required to sign up for a more lucrative cash back offer within a particular category. Always check a bank's policies, particularly its exclusions when evaluating a cash back program.

4. Cash back timing: When do you get your cash back? Some cards may credit your account within a few days after making a purchase, while others may make you wait until the end of your current billing cycle.

5. Other Card Benefits: Credit cards offer a range of benefits, including purchase protection, travel insurance, pricing guarantees, extended warranties, and concierge services. If these bells and whistles are important to you, you'll want to take a total-package approach to evaluating your credit cards.

The Best Credit Cards for Cash Back

Below are some cash back credit cards that are well regarded by personal finance experts. Each card has its own unique benefits, making it easy for you to find a card that best suits your needs.

Wells Fargo Active Cash℠ Card

This card by Wells Fargo is lauded by personal finance gurus for its 2% cash rewards on every purchase. There are no category exclusions. If you're somebody who regularly uses your card for everyday purchases, this card could be a good option for you. In addition, there are no annual fees, and the card offers 0% APR for the first 15 months: This 15-month interest-free offer can also apply to balance transfers.

Other benefits include a $200 sign-on bonus when you make qualifying purchases throughout the introductory period, hotel perks, and a mobile phone protection plan.

Chase Freedom Flex℠

This is a Chase card that offers generous cash back on a range of categories, some of which rotate every quarter. You will always earn at least 1% cash back, but the percentage in the rotating categories can range from 3% to 5%, including grocery, travel, and drugstore purchases. There is no annual fee, you can earn a $200 sign-on bonus if you complete a specific number of purchases within the introductory period, and you enjoy a 0% APR for your first 15 months as a card user.

Discover it® Cash Back

This card from Discover offers a few unique benefits. First of all, Discover will match your earned cash back at the end of your first year with your card. There is no limit on this cash back bonus, either! You will always earn at least 1% cash back, and can sign up for rotating categories that can earn you as much as 5% cashback. In addition, this card allows you to earn cash back when you use PayPal if the card is used as your funding source. If you use PayPal a lot, this card could be a fantastic way to save some money via Discover's cash back program.

You'll also be able to take your cash back either with the standard account credit, by donating your cash back to a qualifying charity, or you can use these rewards at Amazon check out. There's a lot of flexibility with this card. There is also no annual fee. Discover also points out that 99% of businesses that take credit cards do except Discover, so if you are worried about acceptance, you may not need to be.

Blue Cash Preferred® Card from American Express

The Blue Cash Preferred(R) Card from American Express offers 6% cashback on grocery purchases and streaming subscriptions, as well as 3% cash back on gas stations, ride shares and transit purchases. If spend a lot of money on these categories, this card may be your best option. Otherwise, you can get one percent cashback on other purchases, as well as a $300 sign on bonus when you spend at least $3000 using the card during your first six months of card membership.

There is no annual fee for your first year, but you will have to pay a $99 fee for subsequent years. In addition, you'll be offered 0% APR for your first 12 months with the card. Some analysts warn that cash advance and foreign transaction fees can be somewhat pricey, so keep that in mind if you regularly use any of these services.

However, you will also have access to American Express's usual suite of cardmember perks, which can be useful, particularly if you do a lot of domestic travel. If you travel internationally, the high foreign transaction fee may be prohibitive, and you might want to look for another American Express card option.

Final Word

As you can see, there are many options that could work for you and your family. Take time to do research, ask questions and be sure to review any FinePrint before submitting your card application.