Best Cash Back Credit Cards

Michelle Brooks

Michelle Brooks

Financial Advisor

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One of the most popular types of credit cards comes in the form of a ‘cash back’ credit card. Cash back credit cards rebate a percentage of every purchase you make onto your credit card statement. For example, if you have a 1% cash back credit card, every $100 you spend on that particular card will result in $1 being rebated onto your credit card balance at the end of the month. This is seen as a great way to recoup some of your spending. Certain cash back cards work with any purchase that you make, while others work with only certain types of purchases (i.e. gasoline). Some cards even have different cash back percentages depending on the type or purchase you make.

Assessing which types of cash-back cards are best for you will help you ensure you get the most value out of your credit card. It’s important to understand your spending habits, as well as your debt payment habits, if you’re to get as much value as possible out of your cash-back card.

Cash back cards are particularly good for people who are responsible with their credit cards. If you use your card frequently, but pay off your balance in full at the end of the month, a cash back card can be a great way to get some back some of the money you spend. But if you’re someone who carries a large balance at all times, the interest you’re paying on the balance will offset any major benefit you get from a cash back card. This isn’t to say it is completely useless, as you will still be receiving statement credits, but it shouldn’t cloud your judgement when deciding which credit card is best for you.

In this article, we will outline what you should look for when deciding on a cash back credit card, as well as some of the advantages and disadvantages of this particular type of card.

What to Look For

When deciding on a cash back credit card, there are a few vital things to look at prior to making a decision: cash back percentage, cash back purchase categories, and promotional periods. It’s the combination of these three items that will help you determine the best card for you.

  • Cash Back Percentage – This is probably the most important factor of any cashback card. You’ll want to have a look at the percentage of money you will receive in cash back, as well as if there is an upper limit on this percentage. A good cash back percentage is considered to be anything between one and two percent – it probably isn’t worth your time if it’s anything less.
  • Cash Back Purchase Categories – Cash back purchase categories are the types of purchases that you get cash back on. Many popular cards allow cash back on any form of credit card purchase aside from a cash advance. Others may be store credit cards where you only get cash back on purchases within their network. Some cards also have varying rates depending on the purchase category.
  • Promotional Periods – Often lenders will offer promotional periods in which cash back is doubled or boosted to some degree. This is a great way to take extra advantage of your cash back card. But make sure not to apply for just the promotional period, as cancelling a credit card can impact your credit score.

As with any credit card, it is also important to have a look at the interest rates applicable to the specific card. This is especially important if you believe you will be carrying a balance on the card.



The main advantages lie in the amount of cash back you can receive. If you’re someone who regularly uses your credit card but pays the balance in full, this is a great way to save some money. In addition, there may be a store specific credit card that gives you cash back on purchases. If you are a regular customer at this store (for example, Amazon has a cash back store card), then you will be able to save considerable money.



The disadvantages of a cash back card lie in the interest rates. Like any rewards credit card, interest rates are higher to offset the costs of the lender. If you don’t carry a balance this won’t impact you, but if you do it will offset your cash back advantages. Don’t be sucked in by cash back enticements if you know you will likely be paying interest on your card.

Annual Fee is Crucial

The annual fee that you pay on the cash back card is a crucial component in deciding which one is best for you. As with any card, the one with the lowest annual fee is normally the one with the most value. There are obvious exceptions to this rule, but it’s safe to say that cash back cards are more suited to low annual fees.

You need to take a look at the annual fee of the card and see if the amount of money you plan to spend will result in your coming out on top. If your card gives cash back, but you only spend a small amount of money on it, there’s not much point using it. Cash back cards are best for people who are planning on spending a lot of money on the card, this is especially true if the annual fee on the card is high.

Make a concerted effort to determine your current level of expenditure on your card and use this as a benchmark to see how much you would be able to receive in cash back every year.


Planning on Carrying a Balance? Interest Matters

If you do plan on carrying a balance, the interest rate that you’ll receive matters a lot. As we have mentioned in this article, we don’t suggest that you use a cash back card to carry a balance on. Interest rates are too high to justify carrying a large balance.

But if you do plan on carrying a balance, you might be trying to offset your interest rate with the cash back rate that you’ve been offered. You should compare the interest rate with the cash back rate directly. Determine which one is best in comparison.

It’s worth noting that if you’re going to carry a balance and offset the interest rate with the cash back rate, you might as well look at some other credit cards that offer overall interest rates that are better. You’ll most likely find that low-interest cards have better interest rates, even when you factor in the cash back amount that you will receive.


Other Perks to Look Out For

Modern credit cards come with a range of features that help provide benefits to those who use them. But many of these features aren’t advertised – the issuers prefer that you see the cash back or rewards offers that they provide, as it is a more tempting offer. But the other benefits that you can receive with a standard credit card are sometimes just as important.

For example, credit cards are much safer to use, especially if you don’t do all your shopping in person. This is because lenders are worried that you won’t authorize a charge on a card if you haven’t done it yourself. Most lenders operate a zero-liability policy that ensures that you don’t have to pay for anything that you don’t spend – fraud won’t damage you if you become a victim.

This also separates your cash from your credit – fraudsters won’t be able to drain your bank account if they steal your credit card number. If you’re travelling or shopping online, it can be much safer to use your credit card instead of your debit card. Getting stolen money back from a debit card can end up taking considerable time.

Another benefit that you might expect to see in the best cash back cards is a zero foreign transactions fee feature. Most debit and credit cards will charge you a commission on every transaction that you conduct overseas – this is normally around 3%. And while this might not seem like a lot, it can add up quickly if you go on a big trip. Some of the best cash back cards allow you to avoid paying these fees while you’re overseas – it’s a perfect feature for those who travel a lot.

These are just two examples of features that we’ve seen in some of the best cash back cards on the market, but there are many others hidden in the fine print of cards on offer from a range of issuers. Make sure to check if there’s anything else that you’re afforded as a card holder.


General Over Specific

It’s safe to say that you should prioritize general cash back cards over ones that have specific spending requirements attached to them. Unless your someone who spends all your money on one specific type of item, it can be fairly fruitless having a cash back card that specifies certain purchases for cash back.

There are obvious exceptions to this rule, if you constantly shop at a retailer that offers a cash back card, it might be worth signing up for it. But these cards will leave you with less benefit than a card that offers a similar cash back rate at every retailer in the country. There are now plenty of cards that offer substantial cash back rates for general purchases. We recommend that you prioritize these types of cards unless there is a specific offer that you know you can benefit from.


Don’t Alter Your Spending Habits

As with any rewards based credit card, it’s important to not change your spending habits simply because you have incentive to do so through your card. Many consumers make the mistake of spending money that they don’t need to in order to accumulate additional points or miles. The same goes for cash back cards, especially ones specifying certain categories for spending.

Individuals may end up shopping for different types of items or preferring certain distributors over others. The value in this is truly limited, and can end up resulting in you over consuming products that you don’t need. In order to get solid value out of a cash back credit card, you need to make sure that you don’t change your habits, it’s the easiest way to overspend what you would get back from your cards cash back function.



Cash back credit cards can be the perfect way to get more value out of your credit card. Make sure to compare the cash back percentage available with the interest rate. Also, use your cash back card as a credit card that you pay off every month, not a card that you carry a balance on. The last thing you want to do is get tricked into racking up debt on a high interest card just to get a few dollars back for your purchases – it’s not worth it.

Cash back cards can be suitable for anyone, but they’re particularly good for people who have high expenditure levels. Otherwise, you might not be getting any value out of the card, especially if you have to pay a high annual fee every year.

Finding the best cash back card seems a lot simpler than some of the other reward based cards. It’s quite easy to see the exact amount of return you can expect to receive by spending money on the card. But there are a range of other features that differentiate cards from one another. We’ve done research to determine which of the cash back cards truly offer you the best value. Check out some our favorite cards before you start doing your research.

Remember, make sure to not to apply to multiple cards at once. Lenders don’t look kindly on those who are applying for a range of different lending products. You should approach your cash back credit card application seriously – it’s the best way to get approved.