How to choose the best cash back card

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How to choose the best cash back card

Opening a new cash back credit card is a great way to start getting something back for the purchases you make. If used wisely, you can earn points for each dollar you spend and redeem them for cash, merchandise or travel vouchers.

If you're looking for credit cards with rewards, follow our quick step-by-step guide to find the right card for you and review some suggestions from our partners.

1. Choose a card in your credit score range.

With any card you apply for, make sure it's within your reach, or your credit score range, for the best chance of being approved. If you have a credit score of 620 but are applying for a rewards credit card, chances are you'll have a hard time getting approved. To help guide you, check out the average approved credit score for the card you're interested in to see if it's likely that you'll be approved.

2. Choose a card with an annual fee only if the benefits outweigh the cost.

If you apply for a rewards card with a $95 annual fee, but your cash back rewards greatly exceed $95 for the year, the fee may be worth it. While some cash back cards come with an annual fee, it's easy to find a fee-free card, like the Blue Cash Everyday® Card from American Express, Credit Karma's advertising partner.

3. Choose a card with a high cash back percentage.

Not all cash back rewards programs are created equal. Some offer 1 percent cash back on purchases, while others, like the Discover It®, offer more. Read all of the details of the rewards program before you choose your card.

4. Choose a card with a cash back sign-up bonus.

Many cash back credit cards offer bonus cash back if you spend a specified dollar amount in the first few months of card membership. This can be a great way to maximize your cash back benefits right out of the gate. While these bonus cash back offers change from time to time, you can typically find an offer for $100 or $200 cash back after spending $500 in the first few months of card membership. The BankAmericard Cash Rewards™ credit card is currently offering an introductory bonus of $100, if you spend $500 in the first 90 days.

5. Choose a card with unlimited cash back capability.

Some rewards cards cap the amount of cash back you're permitted to earn in a calendar year. Make sure to pick a card with rewards that will let you earn as much cash back as you like, like the Capital One® QuicksilverOne® Cash Rewards Credit Card.

6. Choose a card with easy rewards redemption.

Look into the redemption policy for the card you choose to make sure it's simple, quick and straightforward. The Chase Freedom® has a simple program that lets you credit your cash back earnings toward your statement balance, shop with your cash back in the Ultimate Rewards site or receive a check for the dollar amount of the cash back you've earned.

Once you have your new cash back card, make sure to use it responsibly and keep these things in mind:

  • Getting cash back for purchases could tempt you to overspend. Remember to keep your credit card balance below 30 percent of your available credit limit. This will help you limit your spending, but more importantly, it will keep your credit healthy.
  • Pay attention to opt-in categories. Some cash back cards will give you additional cash back on certain categories that rotate throughout the year. However, you typically have to opt-in to receive this benefit. Set up an email or calendar alert to remind you when it's time to opt-in to each new spending category.
  • Pay off your balance each month. Getting rewarded for spending can be great, but if you start using your card more frequently, don't neglect to pay it off. If you have a balance remaining on your card at the end of the month, you'll end up paying interest on that amount, which can essentially negate your cash back earnings.
  • Use your cash back bonus where it counts. If your card comes with additional cash back for quarterly categories, make a note of those categories so that you know where to use your credit card. That way, you'll get a bigger cash back boost.

Want to see more? Check out the best cash back credit cards - compare reviews and apply online.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

All Comments

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1 Contribution
37 People Helped

Helpful to 37 out of 38 people

Try to keep it simple in your wallet/purse:  Few cards--each having a purpose--but only keep 2 or 3 on your person.  

I never get cards with an annual fee because my usage changes over time, and I would be left paying a fee for a card that I might stop using.  The top three that I used the past 3 years have been 

* Amex Blue Sky (effectively gives 1.333% if and only if you redeem from some travel-related expense on a previous statement), 

* Chase Freedom (5% on specific categories that change every 3 months), and 

* Citibank's Double Cash 2%.  

I keep two in my wallet.  If I'm paying something in the category (restaurants or gasoline, for example), then I use the 5% card.  All else is the 2%.  By keeping it simple, I have fewer things (categories & payments) to "keep track of," enjoy about a 2.6% - 2.8% overall (over $1,000) per year in "free" money, and maintain an 800 +/- 10 credit score.

None of my current cards have a foreign transaction fee benefit.  Those were both unexpected and unpleasant when I moved/traveled overseas a long time ago.  If I plan any significant overseas trip, I will apply for a card with such a benefit, such as Capital One's Quicksilver.  At 1.5% back, I think it is the second-best percent overall that I'm aware of with big banks.

1 Contribution
28 People Helped

Helpful to 28 out of 28 people

The American Express Blue Cash Back Everyday was great so I decided to go one up for higher percentages and get the preferred card ( which adds a $75 annual fee )

BIG MISTAKE.  Their descriptions sound great, BUT there are so many exclusions of stores that I shop at, that the card change was a waste of money.

My Kroger gas station-NOT COVERED ( part of grocery store ). Wallmart Groceries NOT COVERED ( super store ) Sams ( NOT COVERED ) Costco ( NOT COVERED ) and the list goes on.  Just about everything that is covered, falls under the 1% cash back area

If you can navigate through all the super fine print, you may be able to locate the few places that are covered for the misleading higher percentages and oh yes the high 6% grocery store cash backs are capped at $6000 / year. This was added after I already had the card in my possession and was a change in the terms.

They show obscure particular retail locations with a higher cash back percentage that I have never even heard of; at least in this geographical region.  I really feel the pay blue card is a scam - waste of money - not to mention also that more and more merchants are declining to accept the card.

I changed to the all the time CITI 2% cash back ( no exclusions anywhere ). AMex will soon go away from my list.  That was my option then, and it is my choice to be soon. Just a heads up...

2 Contributions
47 People Helped

Helpful to 47 out of 50 people

I'd be mindful of the big banks--any big bank that offers a card.  Look closely enough and you'll find the catches.  Do yourseld a fvor and choose a good federal credit union credit card.  Everything is available including non-confiscatory interest rates and rewards if you really want them--with no surprises.

1 Contribution
22 People Helped

Helpful to 22 out of 25 people

I love my cash back credit cards. However, I ran into the problem of having too many. Right now I have 9 of them (which is a lot) but every once in a while I find a new one that would allow me to fill in the gaps that the other 9 don't cover; yes I have become a rewards card nerd. Even though I have a score of 753, never carried a balance or missed a payment on anything, I am being denied on new credit card applications most likely because of the number of hard inquiries on my report from the previous credit card applications. Is there a way to get around this and get approved for new credit? Or will I just have to wait for these inquiries to go away?

Top Contributor

Reply by
CKCharmaine

512 Contributions
1065 People Helped
Helpful to 19 out of 22 people

You probably want to wait until it's been two years and your inquiries drop off. Lenders will wonder why you need so many credit cards.

Reply by
charliehc

1 Contribution
28 People Helped
Helpful to 28 out of 30 people

You need to get rid of the useless ones.  Go Chase Freedom and it probably does most of what you want.  Wal Mart offers Master Card and gives $.15 a gallon discount on gasoline.   Stay away from Discover and AMEX as both are misleading.   You might get Lowes and Home Depot both of whom give 5% on all charges.  If you are a Vet and pay cash, Lowes gives 10%.  I also pay everyting and have 5 cards but my score is higher.  

2 Contributions
2 People Helped

Helpful to 2 out of 2 people

I have 3 credit cards in my wallet, 2 of them change rewards item every quarter (5% cash back), while the other one offers 1.5% all year around (I use it for everything that doesn't fall into the 5% categories)

Every quarter I write down the card and shop categories that gives me 5% and keep a note in my wallet. So, when I am in a store I always know which cards to use.  I don't carry any cash, and don't shop in stores that don't accept CC (believe it or not, there are still few of them).

This way, I maximize the use of cash rewards. As a personal preference, I choose to get a check in the mail for the cash back (some credit cards can do this automatically).

Credit Karma Team
Top Contributor
2949 Contributions
4612 People Helped

Thank you for sharing! Great way to keep track of rotating reward categories.

2 Contributions
62 People Helped

Helpful to 9 out of 12 people

I am curious why the Blue Cash Preferred Card from American Express is not showing up anywhere. It used to be a reccomended card for me?

Top Contributor

Reply by
cmc304

23 Contributions
279 People Helped
Helpful to 24 out of 25 people

"Reccomended' for you doesn't mean it's for you.  It's suggested by your data.  As much as I love Credit Karma, they make reccomendations that have no potential benefit for me.  

If you check once a year to review your card benefits choose one or two to use, pay it off weekly and build rewards.  Never, ever carry a balance or be late.  If you have good payment record and miss a payment like I did when my dad died, I called the credit card company and told them of the death and the distractions.  They and my mortgage company saw I had never been late before and they waived the late fees for that month. 

Top Contributor

Reply by
quincy95971

20 Contributions
25 People Helped
Helpful to 6 out of 7 people

I have to agree with the other person who replied to this question.  "Recommended" for you doesn't mean it's for you.  I recently needed to add a credit card.  According to Credit Karma, I was recommended several large bank and financial institutions that were 'best' for me (with the resultant high interest rates ranging from 15.9% to 25.99%).  After much research I selected (and was approved) from a local credit union - BECU at 10.9%.  No where on any list or information Credit Karma suggested for me.  Yet, BECU is right here in my own back yard with the best rate of them all.  So, don't assume that what's recommended for you is best for you.

1 Contribution
2 People Helped

Helpful to 2 out of 5 people

DOES ANYONE KNOW WHAT HAPPENED TO VICTORIA SECRET CARD?

ITS USED TO BE AVAILABLE FOR APPLYING.

6 Contributions
2 People Helped

Helpful to 0 out of 1 people

I have two cards that neither cost me any thing.  One has a high limit but that's for emergencies or small purchases only.  All get paid off at the end of the month.  No extra bucks out that way for interest.

1 Contribution
1 Person Helped

Helpful to 1 out of 12 people

can any of these cards give yu  cash if you  want to?

Top Contributor

Reply by
CKCharmaine

512 Contributions
1065 People Helped
Helpful to 16 out of 20 people

Yup. The BankAmericard has an introductory sign-up bonus, and the Discover It card offers 5% cash back on rotating categories and 1% on the rest of your purchases.

Reply by
Champion2211

6 Contributions
2 People Helped
Helpful to 0 out of 1 people

Enter Your Reply   Yes if you qualify for it.  The Discover Card.  Good luck.

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