Cash-back credit cards can be a great way to make money off your normal spending, but if you don't want to pay an annual fee in order to reap rewards, there are plenty of options without a yearly charge.
To help you get the right card for your needs, we analyzed 44 popular cash-back cards without an annual fee using an average American's annual spending budget and digging into each card's perks and drawbacks to find the best of the best based on your consumer habits. (See our methodology for more information on how we choose the best cards.)
It's no wonder these cards are the most popular choice among credit cardholders: Based on our calculations, you could earn more than $2,000 over five years if you choose one of the cards on this list.
Here are CNBC Select's top five cash-back credit cards with no-annual-fee:
2% cash back: 1% on all purchases and an additional 1% after you pay your credit card bill
No current offer
0% for the first 18 months on balance transfers; N/A for purchases
13.99% - 23.99% variable on purchases and balance transfers
3%, minimum $5
Who's this for? Cardholders who want to earn cash back without a lot of fuss should consider the Citi® Double Cash Card. This card set the standard for flat-rate cash-back cards when it hit the market in 2014 and is still one of the best on the market.
You can earn 2% cash back on all purchases — 1% when you make a purchase and an additional 1% when you pay your credit card bill. Cardholders can redeem the cash back for statement credits or checks once they've earned $25 worth of points.
The card is also good for anyone looking to consolidate their debt: The Citi® Double Cash Card offers an introductory 0% APR for the first 18 months on balance transfers (then 13.99% to 23.99% variable APR). There is a 3% balance transfer fee (minimum $5), and if you have debt on another Citi-branded card, you can't transfer it to the Double Cash card.
This card isn't so great for travelers, as it comes with a 3% fee on all foreign transactions and cash back can't be redeemed for travel purchases.
1.5% cash back on all purchases, 2% cash back on all purchases for PenFed Honors Advantage members
$100 statement credit when you spend $1,500 in the first 90 days from account opening
0% promotional rate for the first 12 months on balance transfers
14.99% to 17.99% variable on purchases; 17.99% non-variable on balance transfers
Who's this for? If you don't mind doing a little extra work, the PenFed Power Cash Rewards Visa Signature® Card can net you $100 more in cash back than the Citi® Double Cash Card in the first year thanks to its welcome bonus. Cardholders get 1.5% cash back on all purchases, but that increases to 2% cash back on every purchase if you're a PenFed Honors Advantage member (which requires a qualifying checking account or military affiliation).
PenFed is a credit union, so membership is required to open a card. Anyone can join by applying, opening a savings account with a $5 deposit and maintaining a $5 account balance.
To earn the higher cash-back rate, you need to become an Honors Advantage member in one of several ways: be in an active military service status, a member of the Reserves or National Guard, an honorably discharged U.S. military veteran or retired from such service; be the primary owner on both the credit card and checking accounts of any existing open PenFed product (excluding PenCheck Limited accounts); or open a new Access America checking account (which requires a daily balance or monthly direct deposit of $500 or more to waive the $10 monthly service fee).
Cardholders can redeem their cash back for statement credits, deposit it into their PenFed account or transfer it to another financial institution.
This card offers the same amount of cash back as two other cards on this list, but it comes out ahead in year one by also offering a welcome bonus: Earn a $100 statement credit when you spend $1,500 in the first 90 days from account opening. However, since you have to jump through a few extra hoops to earn 2% cash back, this card ranks behind the Citi® Double Cash Card.
2% cash back on all purchases
21.49% to 28.49% variable
Who's this for? Fans of PayPal and frequent online shoppers will want to check out the PayPal Cashback Mastercard®. It's another 2% cash-back card that lets you earn the same amount of rewards on all purchases. A PayPal account is required to open this card, but if you don't have one yet, no worries — accounts are free.
This card links to your PayPal account, which is great if you're a fan of the platform since your rewards can be applied directly to your PayPal balance. But this may be a hassle for people who don't like PayPal or want other cash-back redemption options, such as gift cards and travel rewards. On the other hand, it's great for fans of online shopping, as PayPal is accepted at 19 million online retailers.
While the PayPal Cashback Mastercard® cash-back program is competitive and earns you the same amount of rewards as the Citi® Double Cash Card, this card doesn't offer any welcome bonus or introductory 0% APR offers, which is why it comes behind the Citi® Double Cash Card and the PenFed Power Cash Rewards Visa Signature® Card.
3% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
Earn a one-time $150 cash bonus once you spend $500 on purchases within the first 3 months from account opening
0% introductory APR for the first 15 months that your account is open
15.49% to 25.49% variable
3% for promotional APR offers; none for balances transferred at regular APR
Who's this for? Foodies and entertainment junkies can maximize rewards with the Capital One® SavorOne® Cash Rewards Credit Card, which provides one of the highest cash-back rates on dining and entertainment purchases at 3%.
Plus, this card has one of the best welcome bonuses on the market: If cardholders spend $500 within the first three months of account opening, they earn a $150 bonus — that's like earning 30% cash back.
Additionally, cardholders who need to finance upcoming purchases or refinance debt can benefit from 15 months of no interest (after it's a 15.74% to 25.74% variable APR). Capital One notes on its site that this is a card for people with excellent credit. While there isn't a specific score given, excellent credit is usually 800 or above. (Read more about credit scores here.)
The Capital One® SavorOne® Cash Rewards Credit Card also offers a slew of other perks, such as access to exclusive entertainment events (concerts, food experiences, sporting events) and no foreign transaction fees (which is not a typical perk for a no-annual-fee cash-back card).
3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), 2% cash back at U.S. gas stations and select U.S. department stores, 1% cash back on other purchases
Earn back $150 after you spend $1,000 in purchases on your new card in your first 3 months from account opening
0% for the first 15 months on purchases, N/A for balance transfers
13.99% to 23.99% variable
Who's this for? The Blue Cash Everyday® Card from American Express is a competitive no-annual-fee card for grocery shoppers. You earn 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).
You can also earn unlimited 2% cash back at U.S. gas stations and select U.S. department stores. This is a nice added bonus since all other purchases earn a standard 1% cash back.
This card comes with access to Amex Offers, which provides statement credits or a chance to receive additional rewards when shopping at select retailers. A recent offer, for example, gave cardholders $20 back when they spent $75 or more at Boxed. These limited-time offers are location-based and additional terms apply.
You can also use this card to finance new purchases thanks to the introductory 0% APR for the first 15 months from account opening. Once the intro period ends, a 13.99% to 23.99% variable APR applies.
This card is also a good no-annual-fee alternative to its counterpart, the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) — but with a $95 annual fee. *See rates and fees.)
To determine which cards offer the best value, CNBC Select analyzed over 44 of the most popular cash-back credit cards available in the U.S. that don't come with an annual fee. We excluded cards that have no annual fee but require a membership fee.
We compared each card on a range of features, including cash-back rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also considered additional perks, application process and how easy it is for the consumer to redeem points.
CNBC Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
CNBC Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.
It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)
Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.
While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.
For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.