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When it comes to cash-back credit cards, it literally pays to do your homework. Using the right cash-back card strategically can earn you hundreds of dollars a year and thousands of dollars over time.
To help you find the right card, we analyzed 50 of the most popular cash-back cards 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.)
When choosing the cards in this roundup, we focused exclusively on cash-back offers, but of course there are lots of other cards to consider. Check out CNBC Select's picks of the best rewards cards for travel, online shopping, groceries and more.
Here are CNBC Select's picks for the top cash-back credit cards:
2.5% cash back on all purchases (up to $250 in cash back rewards per billing cycle)
$99, waived the first year
12.24% to 22.24% variable
Who's this for? If you're looking for a first-in-class cash-back card, then this may be the card for you. The Alliant Cashback Visa® Signature Card offers an industry-leading 2.5% cash back on all purchases (up to $250 in cash back rewards per billing cycle), which is ideal for anyone looking for an easy-to-use rewards card. There are no bonus categories or activation required, so this card is a simple way to maximize cash back on everyday spending.
This card doesn't have many of the bells and whistles that other cards on this list have, but it does offer a competitive 12.24% to 22.24% variable APR. Compared to other rewards cards, this is in the low range, which may be helpful if you happen to carry a balance month-to-month. (We recommend you always pay on time and in full.)
While this card has a strong cash-back program, it does come with a $99 annual fee (though it's waived the first year). It's not the highest when compared to other rewards cards, but you can find a range of cash-back cards with no annual fees.
You also have to become a member of Alliant Credit Union and open an account in order to qualify for this card. The easiest way to become a member is by supporting Alliant's partner charity, Foster Care to Success. You don't need to pay the charity directly — Alliant pays $5 on your behalf when you apply to join the credit union. Membership is also open to family members of current members, employees of partner organizations or those who live or work in qualifying towns and communities near Chicago's O'Hare International airport.
Overall, the numbers indicate that it's worth it to overcome these relatively minor obstacles in order to get the card's generous cash-back rate on all your purchases. If you don't want to make that trade off, though, there are a number of other strong cash-back options that don't require you to join a credit union.
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? The Citi® Double Cash Card is a solid choice if you're looking to maximize your money without having to worry about rotating reward categories. Earn 1% cash back on purchases and 1% when you pay off your bill. That makes the card's appeal almost universal, as you won't have to miss out on reward opportunities.
There's no annual fee and an easy-to-use rewards program with no activation required and no limit to how much cash back you can earn. Cardholders can redeem cash back for checks or statement credits once they've earned $25 worth of cash back. Plus, if you forget to pay your card, Citi will waive your first late fee. (Though we recommend you pay off your credit card balance on time and in full each month to avoid interest charges.)
Although this card doesn't come with a welcome bonus, the Citi® Double Cash Card offers cardholders 0% APR for the first 18 months on balance transfers (then a 13.99% to 23.99% variable APR) initiated within 4 months of opening an account.
In addition to the cash-back rewards, there are a number of special cardmember programs, including Citi Entertainment℠, which gives cardholders first access to purchase tickets for thousands of concerts and events. The card also provides access to Citi® Identity Theft Solutions, a service that will help you if you're a victim of identity theft.
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? If you're looking to earn bonus cash back during the first few months after account opening, consider the Capital One SavorOne Cash Rewards Card. This cash-back card has a generous welcome bonus with a low spending requirement: Earn a one-time $150 cash bonus once you spend $500 on purchases within the first three months from account opening. That's like earning 30% cash back.
Beyond the welcome bonus, the SavorOne Cash Rewards card has a well-rounded cash-back program offering 3% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases.
Plus, this card has no annual fee and no foreign transaction fees, which is perfect if you travel abroad. Cardholders can also benefit from insider access to premium experiences in dining, entertainment, sports and more, such as the iHeartRadio Music Festival and the Capital One JamFest.
5% cash back in different categories (gas stations, grocery stores, restaurants, Amazon and more) each quarter, up to the quarterly maximum each time you activate. Plus, earn unlimited 1% cash back on all other purchases
Discover automatically matches all the cash back you earned at the end of your first year
No credit history
*See rates and fees and our methodology, terms apply.
Who's this for? Building credit while you're in college is a great way to establish good credit by the time you graduate. A student card, like the Discover it® Student Cash Back, can help you build credit while also earning cash back and benefiting from student-centric perks. To qualify, you need to meet a few requirements: attend a two- or four-year college, be over 18 and a U.S. citizen.
The Discover it® Student Cash Back has no annual fee and, upon enrollment, provides 5% cash back on rotating categories, currently Amazon.com, Target and Walmart.com (from October 2019 to December 2019), up to a $1,500 maximum each quarter (then 1%). All other purchases earn 1% cash back.
As an incentive to maintain good grades, Discover offers an annual $20 statement credit when you maintain a 3.0 or higher GPA (valid for up to five consecutive years). Plus, there are no foreign transaction fees, which makes it a good choice for students studying abroad.
If you need to finance textbooks or dorm room essentials, you can take advantage of the 0% APR for the first six months on new purchases. After the intro period, there's a 14.49% to 23.49% variable APR. We always recommend you pay your balance on time and in full in order to avoid interest charges.
3% cash back on goods or services purchased directly from Apple (including Apple retail stores, the Apple online store, the App Store, iTunes, Apple Music and other Apple-owned properties) on Uber and UberEats, at Walgreens and Duane Reade stores, on the Walgreens app and on Walgreens.com, in T-Mobile stores and at Nike, 2% cash back on Apple Pay purchases and 1% cash back on all other purchases
12.49% to 23.49% variable
Who's this for? The Apple Card has generated a lot of buzz with its unique "Daily Cash" program and quirks of its titanium card. The card was created with the dedicated iPhone user in mind and has a cash-back program tailored to fans of Apple products and services.
You'll earn the most cash back (3%) on goods or services purchased directly from Apple (including Apple retail stores, the Apple online store, the App Store, iTunes, Apple Music and other Apple-owned properties), at Walgreens and Duane Reade stores, on the Walgreens app, on Walgreens.com, on Uber, UberEats, in T-Mobile stores, at Nike and at Exxon and Mobil stations. All purchases made with Apple Pay earn 2% cash back, and you earn 1% cash back when paying with the physical Apple Card.
One of the perks of this card is how easy it is to use the cash back you earn. Daily Cash is deposited at the end of every day, after purchases are posted to your account. Once you receive cash back, you're able to redeem it as a statement credit to your Apple Card balance, spend it like cash through Apple Pay, transfer it to a bank account or send it to friends via iMessage.
If you're attached to your iPhone and often use Apple Pay, this card lets you maximize cash back on Apple purchases. Plus, you can benefit from no fees whatsoever — no annual fees, foreign transaction fees or late payment fees. There is also a tool that shows you how much it costs to carry a balance, though we recommend you pay off your card in full and on time in order to avoid interest charges. Read our review of the Apple Card.
1.5% cash back on all purchases
Who's this for? Many of the best cash-back cards require good or excellent credit, but there are some cards for people with fair/average credit that offer good cash-back rates. Capital One® QuicksilverOne® Cash Rewards Credit Card gives consumers a competitive 1.5% cash back on all purchases, with no limit on the amount of cash back you can earn. And cash back can be redeemed at any amount, without the typical $25 minimum some other cards set.
This card has a $39 annual fee, but the average American can earn $289 a year in cash back, which is more than enough to offset the fee. After five years, you could earn $1,444.
The Capital One® QuicksilverOne® Cash Rewards Credit Card charges no foreign transaction fees and comes with travel accident insurance, auto rental collision damage waiver and 24-hour travel assistance services. Plus, you can get access to a higher credit limit after making your first five monthly payments on time.
There are many types of credit cards that offer a range of perks and rewards programs, especially when it comes to cash-back credit cards. The three main types are flat-rate, bonus rewards and rotating category.
Depending on your spending habits, you can benefit from having one or more of cash-back cards.
It can be hard to select just one cash-back card since there are so many to choose from. In order to choose the best card for your needs, you'll need to consider several factors. Here are some tips on how to choose a credit card:
1. Consider the annual fee: While many cash-back cards have no, or low annual, fees, consider if you're willing to pay for your credit card.
2. Do you want to take advantage of a 0% APR: Many cash-back cards provide an introductory 0% APR period that can save you money on interest charges. If you have large purchases coming up, or debt to refinance, consider a card with no interest for over a year, such as the SavorOne card with an intro 0% APR for the first 15 months on purchases and balance transfers (then 15.49% to 25.49% variable APR).
3. Review your spending habits. Taking the time to consider how you use your card, can help you narrow down the type of cash back you want to earn. If you spend a lot at the supermarket, consider a grocery rewards card, such as the Blue Cash Preferred® Card from American Express. But if your spending habits are unclear, stick with a flat-rate cash-back card, like the Citi Double Cash.
If you're having trouble narrowing down the best cash-back card for you, it can be helpful to compare credit cards. You should first list the benefits you're looking for and any deal breakers, such as an annual fee. Then make a list of cards that offer those benefits so you can do a side-by-side comparison. Check out our comparison table below.
For instance, if you want a flat-rate cash-back card, the Citi Double Cash and Alliant Cashback are both great choices. But if you're unwilling to pay an annual fee, the Double Cash is the better choice since it has no annual fee (Alliant charges $99, waived the first year). If the fee doesn't matter, then the Alliant card earns the most cash back (2.5% on up to $250 in cash-back rewards per billing cycle versus 2% on eligible purchases).
In order to make the most of your cash-back card, you should familiarize yourself with the various credit card benefits and fees. Review the annual fee, foreign transaction fees and the APR. Plus consider the cash-back rates and redemption options.
Once you're familiar with the terms of your card, you can begin to optimize them. Set up autopay to ensure payments are made on time and consider how you want to redeem cash back. If there's an automatic redemption option, that can be a simple way to redeem rewards.
And if you have multiple credit cards, make sure you know the best time to use each card. Let's say you have the Citi Double Cash Card and the Capital One Savor Rewards Credit Card. Use the Savor card for all your dining and entertainment expenses to earn 4% cash back, then use the Double Cash for all your other purchases to earn an effective 2% cash back.
To determine which cards will put the most money back in your pocket, CNBC Select evaluated 50 cash-back credit cards offered by the biggest banks, financial companies and credit unions that allow anyone to join. We compared each card on a range of features, including cash-back rewards, annual fee, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available.
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 cash back 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 Preferred® Card from American Express, click here.