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Compare Cash Back Credit Card Offers
Updated: January 12, 2018
CreditCards.com's Top Cash Back Credit Cards for January 2018
- Capital One® Quicksilver® Cash Rewards Credit Card
- Chase Freedom Unlimited®
- Blue Cash Everyday® Card from American Express
- Discover it® Cashback Match™
- Citi® Double Cash Card
- Wells Fargo Cash Wise Visa® Card
- Chase Freedom®
- Capital One® SavorSM Cash Rewards Credit Card
- HSBC Cash Rewards Mastercard® Credit Card
- U.S. Bank Cash+™ Visa Signature® Card
Cashback cards are some of the most rewarding of credit cards today. Whether you are looking for a card that gives you excellent rewards for changing quarterly categories or across-the-board rewards for all types of spending, there are myriad cashback cards to choose from. Here, we look at:
- What is a cashback credit card?
- How do you redeem cashback rewards?
- What is a statement credit?
- Are cashback rewards taxable as income?
- What are common cashback categories?
- Advantages/disadvantages of cashback credit cards
- How to compare 2 cashback credit cards
Whatever your rewards goals, we can help you make the right decision. Learn more here:
What is a cashback credit card?
A cashback credit card, a type of rewards card, allows you to earn cash for making purchases. Most require good or excellent credit, which means you need at least a FICO score of 700 before you even think about applying. FICO, the credit scoring model most used by lenders, rates on a scale of 300-850, with 850 as the best. Cashback cards are an excellent gateway card into travel cards, which can be more complicated to maneuver and typically have an annual fee. Because cashback cards often don’t have annual fees, you don’t have to worry about a minimum spend to make the card worth your while.
How do you redeem cashback rewards?
- Statement credit. The most common way to redeem your cashback earnings, a credit is put on your next bill.
- Gift cards and shopping. Through a shopping portal, some card issuers allow you to make purchases with the cash back you’ve earned on your card. Purchases can be clothing, beauty aids, even gift cards.
- Check. Some banks will issue you a check for your earnings.
- Travel. Through the Chase Ultimate Rewards portal, you can redeem your Freedom or Freedom Unlimited rewards for travel.
- Bank account. Some Bank of America cards give you 10% back when you deposit your credit in a Bank of America checking or savings account. If you have a preferred account, your cash back for deposits increases to 25% and even up to 75%.
Discover allows you to donate to some charities.
What is a statement credit?
When you earn cash back on purchases, one way you can collect the money back is through a statement credit. A credit is placed on your statement that can lower your balance that month. Banks might also allow you to earn your cash back by purchasing on a shopping portal, buying gift cards, receiving a check or having the credit deposited into a bank account with the same bank for a bonus. Some card issuers will even allow you to donate the cash back to charity.
Are cashback rewards taxable as income?
Typically, no. When you have a cashback card and you earn, say, 1.5% back on purchases, that 1.5% back isn’t considered taxable, because it’s considered a discount by the IRS. Learn more about this question here.
What are common cashback categories?
- Restaurants. Restaurants are a favorite category for cashback cards. Some cards will even occasionally offer 5% back. If you find yourself eating out a lot for lunch or trying out the newest restaurant, this might be a good choice for you.
- Groceries. This is a good option for the growing family. Some cards offer generous cash back for groceries year-round. Sometimes, with the cards that offer quarterly categories, you’ll also see drugstores.
- Amazon.com. In the past, you could potentially earn up to $150 back at the end of your first year on this category with the Discover it Cashback Match.
- Wholesale clubs. This is an increasingly popular category for cashback cards, sometimes as a quarterly category and sometimes in a limited time offer.
- Transportation. Gasoline is a popular category with many cards, but you might also see specific quarters that include parking, tolls and Amtrak purchases, perfect for the daily commuter.
- Home improvement stores. This category will pop up periodically, so keep your eyes peeled.
Advantages/disadvantages of cashback credit cards
- Earn hundreds of dollars back a year. First and foremost, cashback cards can earn you oodles of money back just for using your card to make purchases. The more you spend, the most cashback you get. Categories range from groceries and gas to home improvement and wholesale clubs. You can sometimes even get significant cashback savings on shopping at Amazon.com.
- Enjoy shopping deals. Many cashback cards also have shopping portals that offer 10%, even 20% off select retailers. You can shop for beauty aids, clothing, household items and more.
- Wide variety of cards. Cashback cards have been around for a few decades, but they have really taken off in the last 10 years. There are cards with high percentages back that offer rotating categories; cards with high percentages on select categories year-round; and general-purpose cashback cards that give you 1%-2% back on every purchase.
- Great practice for a travel card. If you have your eye on a travel, airline or hotel card, but you aren’t sure if you have the discipline yet, a cashback card is a good way to get started. Why? Because many don’t have an annual fee, unlike other rewards cards, so you can spend moderately at first and figure out how to spend and pay it off at the end of each month.
- Excellent way to build credit. By paying on time and in full each month, and by keeping the card active by using it regularly, you will see your credit score climb in no time.
- Annual fee. Some cashback cards have an annual fee, which can be a problem if you don’t plan ahead. For example, if you have an annual fee of $95, you’ll want to make sure you spend enough to recoup the annual charge.
- Carrying a balance. It’s simple: Don’t do it. If you think you are going to incur debt that carries over month to month, a cashback card isn’t the best option. There is little point in getting a rewards card for earning cash back, points or miles, then paying the card issuer interest charges each month. If you have a $3,000 balance and you pay the minimum, if will take you 126 months and you will pay $2,241 in interest fees. Yuck.
- Late payments. The easiest and fastest way to build credit is by using a credit card correctly. The easiest and fastest way to lose that great credit score? Pay your bills late. That’s because those late payments go to the credit bureaus and in turn to the credit scoring companies. If you’re going to get a card, always, always pay on time.
How to compare two cashback cards
- What credit tier is required? Most cashback cards require good or excellent credit, although there are exceptions.
- Is there a sign-up bonus? Some cashback cards offer $150 or more for signing up, provided you spend a minimum within a set amount of time, typically 3 months.
- What bonus rewards are offered? Cashback cards can offer higher percentages for specific categories, rotating categories and across-the-board percentages for most spending.
- Is there an annual fee? Many cashback cards don’t have an annual fee.
- How do you want the cash back to be redeemed? Redemption can be with credit statements, checks, a travel portal, a shopping portal, gift cards or a deposit in a bank account.
Check out our reviews
Interested in learning more about each card? We’ve reviewed several cash back credit cards – check them out in our reviews section.
Recap: Our Featured Cash Back Credit Cards for January 2018
|Card||Welcome Bonus||Bonus Requirement||Rewards Rate|
|Capital One® Quicksilver® Cash Rewards Credit Card||$150 Cash Bonus||Spend $500 on purchases within 3 months from account opening||Earn unlimited 1.5% cash back on every purchase, every day|
|Chase Freedom Unlimited®||$150 Bonus||Spend $500 on purchases in your first 3 months from account opening||Unlimited 1.5% cash back on every purchase|
|Blue Cash Everyday® Card from American Express||$150 Cash Rewards Bonus||Spend $1,000 in the first 3 months||Earn 1% cash back on every purchase, 2% at U.S. gas stations and select U.S. department stores, and 3% at U.S. supermarkets for the first $6,000 in supermarket purchases each year|
|Discover it® Cashback Match™||Discover will match all the cash back earned at the end of your first year, automatically||Automatic||Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.|
|Citi® Double Cash Card||N/A||N/A||Earn cash back twice on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases|
|Wells Fargo Cash Wise Visa® Card||$200 Cash Rewards Bonus||Spend $1,000 in the first 3 months||Earn unlimited 1.5% cash rewards on purchases|
|Chase Freedom®||$150 Bonus||Spend $500 on purchases in your first 3 months from account opening||Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate|
Unlimited 1% cash back on all other purchases
|Capital One® SavorSM Cash Rewards Credit Card||$150 Cash Bonus||Spend $500 on purchases within the first 3 months from account opening||Earn unlimited 3% cash back on dining, 2% on groceries and 1% on all other purchases|
|HSBC Cash Rewards Mastercard® Credit Card||$150 Cash Rewards Bonus||Spend $500 purchases in the first 3 months||Earn unlimited 1.5% cash rewards on all purchases|
|U.S. Bank Cash+™ Visa Signature® Card||$150 Bonus||Spend $500 in eligible net purchases in the first 90 days||5% cash back on your first $2,000 in eligible net purchases each quarter on the combined two categories you choose|
2% cash back on your choice of one everyday category, like gas or groceries
1% cash back on all other eligible net purchases
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