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How to Find the Best Cash Back Credit Card

Published March 15, 2022
5 min read

There’s no overall best cash back credit card — the best card will depend on your specific situation. However, you can narrow down the options by looking at the main distinguishing features of each card and considering your preferences and financial situation.

Understand the different rewards styles

Cash back credit cards generally use one of three rewards structures:

  • Fixed-rate rewards. Fixed-rate rewards cards will give you the same cash back rewards rate on every eligible purchase.
  • Tiered rewards. Cards with a tiered-rewards structure offer a different cash back rewards rate depending on where you shop. Often, there’s a fixed rate for everyday purchases and a higher rate for purchases in bonus categories.
  • Rotating rewards. Some cash back credit cards have tiered rewards with one tier that rotates throughout the year. Often, you can earn bonus rewards on up to a certain amount, such as $1,500, in combined purchases each quarter.

You might earn the most cash back with a tiered- or rotating-rewards card if the bonus categories align with your usual spending. But a fixed-rate cash back card could be best if you don’t always shop at the same stores or don’t want to think about different bonus categories.

Compare the cards’ features and fees

When looking for a new cash back rewards credit card, consider how the cards’ benefits and fees can impact how much you can earn overall.

Features

Look into how you can redeem your rewards, what other benefits the card offers and if there are any other introductory offers that could be useful.

  • Redeeming your rewards. There may be limitations on how and when you can redeem your cash back rewards. Look for a minimum redemption requirement, and whether you can redeem cash back rewards in different ways, such as for a statement credit, gift card, or transfer to a checking or savings account.
  • Statement credits. A credit you’ll receive after making an eligible purchase. These can be helpful if you were going to make the purchase anyway, but cards that will give you a statement credit also tend to have an annual fee.
  • Purchase benefits. Perks when you use your card to buy something, such as extended warranties, insurance, or protections on a qualifying purchase.
  • Intro APR financing. Some cards offer an introductory 0% annual percentage rate (APR) for purchases or balance transfers. These may be beneficial if you have a large purchase coming up or want to transfer a balance from a different credit card.
  • Cardholder benefits. Any additional benefits that you might receive as a cardholder. Some of these may depend on the credit card network, card issuer or the specific card.

Fees

Some fees can’t be avoided if you decide to open the card. Others depend on how you use it.

  • Annual fee. A fee to open and keep your credit card. You may have to pay this each year, even if you rarely use your card.
  • Foreign exchange fee. For transactions made outside the U.S. or in a foreign currency.
  • Balance transfer fee. For transferring balances to the card.
  • Cash advance fee. For using the card to withdraw cash and for certain cash-like purchases.
  • Late payment fee. For when you don’t make at least the minimum payment by the due date. Some cards don’t have this fee, or waive it the first time you’re late.

Simply looking for a cash back card that offers a high rewards rate right might not be the best approach. For example, if there’s a large annual fee, you’ll need to earn a lot of cash back before you break even for the year. Or if a card offers 2% cash back but has a 3% foreign transaction fee, it won’t be a good fit if you plan to travel abroad.

Consider how you’ll use the card

With the types of cards, features, and fees in mind, also consider how you plan to use the credit card. A cash back rewards credit card that offers a large sign up bonus and an intro 0% APR offer on purchases might be a good fit if you have an especially large purchase planned.

However, if you want a card that will continue to offer great rewards on everyday purchases throughout the year, consider the long-term value. Discover’s cash back cards have the unlimited Discover® Cashback Match benefit, where  Discover will automatically match all the cash back you’ve earned at the end of your first year.1 There is no limit to how much Discover will match. Plus, none of Discover’s rewards cards have an annual fee or foreign transaction fee.

Check your credit score

Your credit score can impact your ability to get a credit card and the offers and rates you receive. You can use different services to check your credit score for free.

Knowing your score could help you determine which cards you’ll likely qualify for prior to applying. For example, some credit cards may require excellent credit, while others might be options even if you have fair credit.

If you’re new to credit or rebuilding your credit, you may have fewer options. But there are secured credit cards that offer cash back rewards. Responsibly using these cards may positively influence your credit score.

Apply for your cash back credit card

Applying for cash back credit cards isn’t any different than applying for other types of credit cards. But before applying, look to see if the card issuer can pre-approve you for different cards. Then, apply for the card that makes the most sense for you right now.

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