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Best Cash Back Credit Cards of March 2020

| Money Rates Columnist
min read
The specifics of cash-back-rewards programs vary from card to card and can be complex. Compare top cash-back credit cards and learn how to maximize their benefits.

family-groceries-credit-cardHow would you like to get a rebate on every purchase you make?

Cash-back credit cards do exactly that.

Regardless of what you buy or where you shop, these rewards cards put money back into your pocket each month.

However, not all cards are created equal.

Some may limit how much cash back you can earn while others may only provide their highest level of rewards on specific categories of purchases.

The best cash-back credit card for you depends on individual preferences such as whether you like rewards that never change or want to maximize money back with bonus categories.

Keep reading for the top cash-back cards currently available and what makes them stand out from the rest. (Plus, we've got tips on how to maximize your benefits, insight into the credit score you'll need to qualify and more.)


Best Flat-Rate Cash-Back Credit Card - Chase Freedom Unlimited®

If you're new to cash-back credit cards, a flat-rate card can be the simplest way to get started.

These cards offer the same percentage of cash back on all purchases. Often, rewards on these cards are unlimited and don't expire so long as your account remains open.

Flat-rate cash-back credit cards are best for those who don't want to worry about spending tiers and bonus categories.

No matter what you buy or how much you spend, you always know exactly how much cash back is coming your way.

The following are our five top picks for the best flat-rate cash-back credit cards. All are solid choices, but a larger welcome bonus takes Chase Freedom Unlimited® to the top of the list.


Chase Freedom Unlimited®

The Basics: With an annual fee of $0 and other benefits like purchase protection, Chase Freedom Unlimited® is a solid card even before you consider that you can earn unlimited 1.5% cash back on all purchases.

The Chase Freedom Unlimited® card offers flexible redemption options including statement credits, direct deposits, gift cards and travel.

Thanks to a welcome offer for new cardholders, there isn't a better flat-rate cash-back card on the market right now in our opinion.

Chase Freedom Unlimited®

Rewards Rate: You can earn unlimited 1.5% cash back on all purchases.

Bonus: For new cardholders, there's a generous welcome offer of $150 cash back after spending $500 within 3 months from account-opening.

Annual Fee: $0

Credit Needed: Excellent, Good


Wells Fargo Cash Wise Visa® card

The Basics: This card is a good pick for anyone who banks with Wells Fargo.

Among its cash-back redemption options is the opportunity to redeem for cash in $20 increments at Wells Fargo ATMs or apply a credit toward a Wells Fargo mortgage principal balance.

The Wells Fargo Cash Wise Visa® card should also be a top choice for anyone who uses Apple Pay or Google Pay since it offers an increased cash back rate on those purchases at first.

Wells Fargo Cash Wise Visa® card

Rewards Rate: You can earn 1.8% cash rewards on qualified digital wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from account opening unlimited cash back on purchases. Cash rewards on qualified digital wallet purchases during the first 12 months from account-opening is 1.8%.

Bonus: There's a bonus of $150 cash back after spending $500 within 3 months from account-opening.

Annual Fee: $0

Credit Needed: Excellent, Good


American Express Cash Magnet® Card

The Basics: In addition to cash back, the American Express Cash Magnet® Card gives its users benefits such as free two-day shipping though ShopRunner, a global-assist hotline for use in the event of a travel emergency and car rental loss and damage insurance.

Rewards earned with this card can be redeemed for statement credits, gift cards or merchandise.

While the card offers a welcome bonus, note its spending requirement is double that of the other cards on this list.

American Express Cash Magnet® Card

Rewards Rate: You can earn unlimited 1.5% cash back on your purchases.

Bonus: The bonus is a $150 statement credit after spending $1,000 within 3 months from account-opening.

Annual Fee: $0

Credit Needed: Good, Excellent



>>Pro Tip: Interest charges can quickly outweigh the value of any cash back you earn. If you have to carry a balance, choose a card like Chase Freedom Unlimited® which offers an introductory 0% APR.


Best Tiered Cash-Back Credit Card - Blue Cash Preferred® Card from American Express

Tiered cash-back credit cards pay out different levels of rewards depending on what is purchased. For instance, you may get 4% cash back when you eat out at a restaurant but only 2% cash back when you shop at the supermarket.

These cards are great for those who spend a significant amount of money in a specific category.

Some people apply for several tiered cards so they can get the highest earning rates possible in several categories, such as dining or gas.

Keep in mind that the default earning rate for purchases outside these special categories is usually 1%. That means that, if you aren't spending in the top-tiered categories, you may be earning less than what you'd get with a flat-rate cash-back card.

We think the Blue Cash Preferred® Card from American Express is hands-down the best tiered cash-back credit card, thanks to its impressive 6% earning rate at grocery stores and on select U.S. streaming services. However, the best card for you will be the one that maximizes rewards on the spending you do most.


Blue Cash Preferred® Card from American Express

The Basics: You pay an annual fee for this card, but you'll easily cover that expense with your cash back if you spend at least $150 a month in groceries.

The Blue Cash Preferred® Card from American Express gives its members a hefty cash back in purchases at U.S. supermarkets, that could result in up to $360 annually in cash back.

Plus, there is plenty of other earning potential for streaming services, gas and transit purchases.

The current welcome offer only sweetens the deal and makes this card hard to beat.

Blue Cash Preferred® Card from American Express

Rewards Rate: Earn 1% cash back on other purchases.

Gas - You can earn 3% at U.S. gas stations.

Groceries - You earn 6% at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).

Entertainment - 6% Cash Back on select U.S. streaming subscriptions.

Transportation - There's 3% cash back on transit purchases such as parking and rideshares.

Bonus: Get $250 as a statement credit after spending $1,000 within 3 months from account-opening.

Annual Fee: $95

Credit Needed: Good, Excellent


Blue Cash Everyday® Card from American Express

The Basics: The Blue Cash Everyday® Card from American Express is another good option for those who want to skip an annual fee.

This card has a competitive welcome bonus and offers higher levels of cash back for purchases at U.S. supermarkets and gas stations, which are common expenses in many households.

What's more, you get car rental loss and damage insurance and access to a global-assist hotline while traveling.

Blue Cash Everyday® Card from American Express

Rewards Rate: You earn 1% cash back on other purchases.

Gas - You get 2% Cash Back at U.S. gas stations.

Groceries - For your grocery shopping, you earn 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).

Bonus: The bonus offer is a $150 statement credit after spending $500 on purchases within 3 months from account-opening.

Annual Fee: $0

Credit Needed: Good, Excellent


>>Pro Tip: Before you select a card based on its cash back for groceries, check which stores qualify. Many credit card issuers don't consider Walmart or Target to be supermarkets.


Best Cash-Back Credit Card for Rotating Categories - Chase Freedom®

While tiered cash-back credit cards can boost your earnings by providing extra rewards for specific spending, you're locked into the same categories all year long. For more flexibility, consider a cash-back credit card with rotating categories.

These cards switch up the categories that get extra cash back each quarter. So you might get 5% cash back for groceries during the first three months of the year and then 5% cash back at Amazon during the last three months.

Each credit card issuer sets its own categories. Some reveal the entire cash-back calendar at the start of the year, and others only share bonus categories as they become available. In most cases, cardholders have to activate the bonus category which can usually be done by clicking a link within your card's online account.


Chase Freedom®

The Basics: Chase Freedom® is our top pick for a cash-back credit card with rotating categories. It offers a competitive cash-back rate, a 0% introductory APR and a generous welcome offer.

Chase Freedom®

Rewards Rate: Earn 5% cash back on up to $1,500 in combined purchases in bonus categories every 3 months you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.

Bonus: You earn $150 cash back after spending $500 within 3 months from account-opening.

Annual Fee: $0

Credit Needed: Excellent, Good


>>Pro Tip: Keep track of quarterly categories by writing them on a small removable label and affixing it to the front of your card. At the end of the quarter, remove the label and affix a new one with the updated categories.


Best Cash-Back Credit Card for Cardholder's Choice Categories - U.S. Bank Cash+™ Visa Signature® Card

Some cards allow you to select the rotating category for each quarter. This gives you freedom to select department stores for the quarter in which you know you'll be back-to-school shopping and utilities for those times of year when your energy bill is highest, for example.

The downside to selecting your own bonus categories is that you need to remember to make a choice before the next quarter starts. Otherwise, you could miss out on valuable cash-back savings. So these cards are best for those who feel confident in their ability to remember when new quarters start and choose their bonus categories in a timely manner.


U.S. Bank Cash+™ Visa Signature® Card

The Basics: We love the U.S. Bank Cash+™ Visa Signature® Card for the number of choices it gives users.

Each quarter, cardholders can select two categories for cash back. The 12 available options include TV, internet and streaming services, fast food, electronics stores and home utilities.

U.S. Bank also lets customers select an additional category for lower cash-back rate, and the choices here are between grocery stores, gas stations and restaurants.

U.S. Bank Cash+™ Visa Signature® Card

Rewards Rate: 1-5% cash back on cardholder-selected categories including grocery stores, gas stations or restaurants.

Bonus: You can earn $150 after spending $500 within 90 days from account-opening.

Annual Fee: $0*

Credit Needed: Good,Excellent


>>Pro Tip: Create an event on your phone or computer's calendar to remind you three days before the quarter starts to select new categories.


Types of Cash-Back Credit Cards

The specifics of cash-back-rewards programs -- what's offered and how they work -- vary from card to card and can be complex. However, they can be broken down into the following categories:

  • Flat-rate cash-back credit cards

    These cards have the simplest rewards structure. They award the same amount of cash back on all purchases. Obviously, the higher the rate, the more cash you get back.

    If, for example, you earn 2% on all purchases and you charge $10,000 to the card in one year, you'd accrue $200 in cash back. Credit card companies can modify those rates at any time, however.

  • Tiered cash-back credit cards

    Other cards offer higher percentages on purchases in certain categories such as groceries, drugstore items and gasoline, or for purchases from selected merchants. Some even feature bonuses for the first purchase or bonuses for spending a certain amount in a year. These are known as tiered cash-back credit cards.

  • Cash-back credit cards with rotating categories

    These cards are a type of tiered cash-back credit card. However, rather than having permanent categories for higher cash-back rewards, these cards rotate through different bonus categories throughout the year. Typically, card issuers will change the categories each quarter.

  • Cash-back credit cards with cardholder-choice categories

    The final type of cash-back credit card also uses rotating categories, but it lets cardholders choose the category rather than leaving that choice to the card issuer. This provides for the most flexibility possible to maximize cash-back rewards.


How Cash-Back Credit Cards Work

To make the most of cash-back credit cards, you need to understand the ins and outs of how they work. That means knowing what fine print to read and the best ways to redeem your cash back once it's earned.

Cash-Back Credit Card Limitations

Most of these rewards cards have rules concerning usage and redemption. Here are a few to know:

  • Cap limitations

    Some of these cards have a limit on the cash back you can get monthly, annually or both. For instance, an annual cap may mean you can't earn any more than $600 per year. However, many of the best cash-back credit cards don't have caps.

  • Redemption minimums

    Sometimes you have to charge a certain amount on the card before your reward takes effect or before you can redeem your reward. With some cards, you may redeem your reward each time you meet the minimum; with others, redemptions can be done monthly or annually.

  • Expiration dates

    Expiration dates on the rewards themselves are not uncommon. On cards with a rewards expiration date, if you don't retrieve your cash back by that time, you lose it. For instance, on the Citi Double Cash Card, a cash-back balance will expire if no new cash back has been earned in 12 months. You also could forfeit your rewards in other ways, such as defaulting on the account.

Cash-Back Credit Card Fees

Cash-back rewards cards often have higher interest rates than cards without rewards, so it's best to pay any balance off in its entirety every month. Otherwise, interest will eat away at your cash rewards and you won't reap any true benefits.

Also, as with any credit card, check for the following fees and see which terms apply to them:

  • Annual fee

    It's not unusual for rewards credit cards to have annual fees. Before you pay an annual fee, make sure the value of the cash back you expect to receive will offset the cost.

  • Balance transfer fee

    Some credit cards offer a 0% introductory APR on purchases and balance transfers. You won't earn cash back on a balance transfer, and you could be charged a fee equal to 3-5% of the transferred amount. So make sure the interest savings will be enough to justify paying the balance transfer fee.

  • Foreign transaction fees

    If you travel frequently, look for a card that doesn't charge foreign transaction fees. Otherwise, you could be charged a 3% fee every time you buy something in a foreign currency and that will quickly negate any cash back you earn on those purchases.

Cash-Back Credit Card Redemptions

Obviously, your rewards with a cash-back credit card will most likely come in the form of cash. How you get that cash can depend on your card. Generally, you'll have one or more of these options:

  • Statement credit
  • Paper check
  • Automatic deposit to bank account
  • Use of cash-back rewards to make purchases on partnering sites such as Amazon
  • Gift cards
  • Travel
  • Merchandise

Most of these methods result in a dollar-for-dollar redemption. In other words, if you have one dollar of cash back in your account, you get one dollar for a statement credit or one dollar off your Amazon order.

Travel and merchandise can be a little tricky, though, since it's hard to know sometimes if you're getting the best value for your money. As a general rule, redeeming your cash back for cash rather than merchandise is the best advice.


Strategy: Getting the Most Out of Your Cash-Back Credit Card

Now we come to the nitty gritty.

How exactly do you get the most out of a cash-back credit card?

Well, it starts by not having just one cash-back credit card. You'll probably want two or even three to get the most money back.

If that sounds overwhelming, don't worry. We have the process broken down into eight easy steps:

1. Select your cards

Start by selecting an everyday card. This will be a flat-rate cash-back card that is used for all your purchases except those covered by a tiered card's bonus categories.

Then, look for one or two tiered cash-back cards or cards with rotating or customer-choice categories. You'll want to find cards that offer the most cash back for the categories you shop most frequently, such as groceries or gas. However, don't apply for any cards just yet.

2. Apply for your cards strategically

Now that you have cards selected, you need a strategy for when to apply.

Why? Because you want to be able to comfortably spend enough to earn each card's welcome bonus and pay off the balance before any interest starts.

That means looking at your expected spending patterns and deciding when a particular card might be a good fit. Do you have any big expenses coming up that would help meet that requirement? If so, time your application for the card a month before the purchase will be made.

Also take into consideration whether a card's welcome bonus is higher than usual. For instance, Chase Freedom® and Chase Freedom Unlimited® sometimes offer a $200 welcome bonus instead of the $150 they usually offer. We don't know how long offers will last, so it's best to apply right away if a card has an enhanced bonus available.

Keep in mind that a rash of applications can have a negative impact on your credit score. They could also raise a red flag to card issuers who might think you're in a financial crisis and desperate for money.

To improve the odds of having applications approved, some people recommend applying for 2-3 cards on the same day and then waiting 3-4 months before applying for any additional cards. Others suggest applying for only one card every 6 months. However, there is no magic number for how long to wait between applications since each card issuer has its own evaluation standards.

If you have excellent credit and a stellar on-time payment history, waiting between applications probably isn't as important as it is for those with lower credit scores.

3. Separate cards in your wallet

As you receive and begin to use your cards, have a designated place in your wallet for each one. Storing them together increases the chances of pulling out the wrong one if you're in a rush in the store. Then, you'll have earned only 1.5% cash back on your groceries instead of the 6% you could have gotten if you'd pulled out the Blue Cash Preferred® Card from American Express.

Using a removable label to note the card's cash-back rate on the card itself can also be helpful. Whichever system you use, just be sure it makes it easy to quickly pull out the right card for each purchase.

4. Use cash-back cards for all your monthly bills

One way to maximize cash-back is to use cards for monthly expenses in addition to everyday purchases. That means, for instance, setting up payments from your Chase Freedom® card for your phone and internet bills or using your U.S. Bank Cash+™ Visa Signature® Card for utility bills if you've selected utilities as one of your choice categories.

It doesn't make sense, though, to use a cash-back card if a provider charges a fee for credit-card payments. There's no reason to pay a 3% processing fee in order to get 1.5% cash back. The only exception might be to earn a welcome bonus. In that case, it might be worthwhile to pay a fee if you'll earn $150 or $300 as a result. However, always do the math first to be sure.

5. Change cards when you hit spending limits

Once you hit the spending limit for a particular category, switch to a new card. Otherwise, you could miss out on valuable cash back.

For example, let's say you have a large family and charge $750 worth of groceries to your Blue Cash Preferred® Card from American Express each month. This gives you 6% cash back on your purchases. However, by September, you will hit the $6,000 spending cap for the category. After that, groceries will only earn 1% cash back, and it's time to switch to a new card.

You could move to the Blue Cash Everyday® Card from American Express to earn 3% cash back or use one of the many flat-rate credit cards offering 1.5% cash back.

6. Create category and payment alerts

To ensure you don't miss the opportunity to activate or choose categories, set a calendar reminder on your phone or computer. You can also set up payment alerts through most credit-card accounts, and these will issue reminders of upcoming due dates. Don't forget that, with some cards, a missing or late payment could mean forfeiting some or all of your cash back.

7. Pay off your balance every month

Only charge expenses you can comfortably pay off each month. Once interest starts to accrue on an account, even the best cash-back credit card will cost more money than it earns in rewards. If you're having trouble making payments, stop using the card until you have paid off the balance and determined what caused the problem.

8. Regularly reevaluate your current cards

Cash-back credit cards are constantly evolving. Terms change, rates and fees fluctuate and welcome offers come and go. It's always smart to keep an eye open on what else is available for cash-back rewards. We also recommend doing a full evaluation of your cards once a year. Make sure they still align with your spending patterns and decide whether any annual fees you're paying are worth the rewards you're reaping.


Credit Score You Need for a Cash-Back Credit Card

In general, rewards credit cards require applicants to have good or excellent credit scores.

While the number can vary by issuer, a credit score at or above 700 is usually considered good, according to the credit reporting company Experian. Some cards are available to those with lower credit scores - but they may charge an annual fee or offer fewer rewards than those provided by other cards.

If your score is lower than 700, consider taking some time to improve your credit before applying for a cash-back credit card.


Methodology

This list of cash-back credit cards featured in this article is certainly not exhaustive. There are plenty of other cards out there to consider. However, to make it easier for you to review your options, we took a select group of popular cash-back cards and analyzed them, giving weight to factors in this order:

  • Percentage of cash back offered
  • Value of welcome bonus
  • Cost of annual fee
  • Bonus category options (greater weight given to cards with broad, rather than niche, categories)
  • Redemption options
  • Other card perks and benefits
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