How to Choose the Best Cash Back Credit Card for You

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• I spotted I is likely to be lacking out on rewards by not utilizing a cash-back bank card.
• I plan to open a no-annual-fee card that provides a beneficiant welcome bonus.
• I am going to select a card that provides bonus money again within the classes the place I spend essentially the most.
• Read Insider’s guide to the best rewards credit cards.

The opposite day, I made a decision to lastly improve a number of the expertise I exploit for work and private tasks. I needed to get a brand new microphone, laptop, tripod, and monitor. Altogether, I used to be going to be spending over $2,500.

Earlier than I pressed the purchase button, my husband urged me to rethink buying these things with my JetBlue Card, which might solely give me 2,500 JetBlue factors — equal to round $35 based mostly on Insider’s points and miles valuations). As a substitute, he recommend I contemplate getting a cash-back bank card that earns 2% money again, just like the Wells Fargo Active Cash℠ Card
, which might earn $50 on this buy.

He confirmed me how his cash-back card offers him with respectable rewards each month and the way I used to be lacking out. It tempted me to contemplate getting my very first cash-back bank card earlier than, one thing I by no means thought I needed to get.

Learn extra: Guide to the best cash back credit cards

Earlier than the pandemic, I used to be a continuing traveler who banked on utilizing journey rewards factors to pay for flights and motels. Since numerous my journey has been reduce completely, it makes extra sense to get a bank card that provides me instant advantages within the type of a refund. 

Since I am beginning the method of selecting the correct bank card, listed here are 4 issues I am contemplating that may assist me make the most effective determination. 

I do not desire a card with an annual charge

One in every of my general guidelines for bank cards is to keep away from these that include an annual charge, except the advantages complement that charge or are extraordinarily price it. The vast majority of the playing cards I’m contemplating shouldn’t have an annual charge, however one which appeared interesting does — the Blue Cash Preferred® Card from American Express has an annual charge of $Zero intro for the primary 12 months, then $95 (See Rates).

Whereas the added advantages of this card embrace 6% again in your first $6,000 in U.S. grocery store spending every year (then 1% again) and 6% money again on choose U.S.

streaming

companies (money again is earned within the type of Rewards {Dollars}), it is related sufficient to the Chase Freedom Unlimited®.

Learn extra: Chase Freedom Unlimited credit card review

The Chase Freedom Unlimited® presents new cardholders 5% cash back (5x points) at grocery stores (excluding Goal and Walmart) on as much as $12,000 in spending through the first 12 months of account opening (then 1x), with no annual charge. 

In the case of

cash-back credit cards

, many choices haven’t got an annual charge, so if you happen to’re contemplating one which does, be sure the advantages included make paying that charge worthwhile.

I need to earn a welcome bonus

Whereas many travel rewards credit cards provide main bonuses for opening the cardboard and meeting a minimum spending requirement in a sure timeframe, cash-back playing cards do not at all times include those self same intro presents. For instance, one card I am not contemplating is the Capital One QuicksilverOne Money Rewards Credit score Card, which has a $39 annual charge and no present intro provide.

Learn extra: Amex Blue Cash Preferred credit card review

The perfect intro provide I used to be capable of finding was on the Blue Cash Preferred® Card from American Express — $300 assertion credit score after spending $3,000 in purchases in your new card throughout the first 6 months. Nonetheless, the Chase Freedom Unlimited® presents $200 after spending $500 on purchases within the first three months from account opening, and would not have an annual charge. At $100 much less, that welcome bonus appeared like a greater deal. 

Intro presents range by month and season. Be sure you analysis and search for up to date reward presents earlier than making your closing determination. 

I need to be rewarded for my high spending classes

One of many trickiest components of choosing a cash-back card is discovering one that gives you with a excessive cash-back charge for the classes you spend essentially the most on. Whereas some present a set cash-back proportion, irrespective of the spending class, like 2% money again on the Wells Fargo Active Cash℠ Card, some range the speed based mostly on the kind of spending you do. 

I sat down and reviewed my bank card assertion and realized the classes that matter essentially the most to me are groceries, dining, and journey. I haven’t got a automotive so rewards for buying gas don’t apply to me (this can be a widespread class for some cash-back playing cards). This lined up effectively with the Chase Freedom Unlimited®, which presents the 5% again at grocery shops for brand new cardholders (as much as spending limits), 5% again on travel purchased through Chase’s Ultimate Rewards, plus 3% again on eating and drugstores.

Learn extra: There are 4 different types of cash-back credit cards, and the best option for you depends on your spending

Nonetheless, one other viable choice is the Citi Custom Cash℠ Card, which helps you to earn 5% money again on purchases made in your high eligible spend class (eating places, fuel stations, grocery shops, choose journey, choose transit, choose streaming companies, drugstores, residence enchancment shops, health golf equipment, and reside leisure), as much as the primary $500 spent every month (then 1%).

Begin by figuring out what you spend essentially the most cash on each month after which discover a card that rewards you for spending in these classes. 

I do not need spending caps

I at all times questioned if you may make countless money again together with your bank card, solely to seek out out that many playing cards have a restrict on the bonus money again they will pay out in a billing cycle, quarter, or 12 months. 

For instance, the Chase Freedom Flex℠ presents 5% money again on as much as $1,500 in mixed spending in categories that rotate every quarter once you activate the bonus. Or the Blue Cash Preferred® Card from American Express presents 6% money again on U.S. grocery store purchases, as much as $6,000 per 12 months (then 1% again). 

Learn extra: Chase Freedom Flex vs Chase Freedom Unlimited: Which cash-back card is right for you?

In the event you do not need to fear about reaching a restrict and never with the ability to earn a excessive proportion on sure classes, you may contemplate a card just like the Wells Fargo Active Cash℠ Card, which supplies you limitless 2% money again on each greenback you spend.