Best Cashback Credit Cards in the US: A Comprehensive Guide

Cashback credit cards are an excellent choice for anyone looking to make the most out of their everyday purchases. These cards offer a percentage of your spending back as a reward, helping you save money while shopping. In this blog, we’ll cover:

1. How cashback credit cards work
2. Advantages and disadvantages
3. Top cashback credit cards in the US
4. Steps to apply for a cashback credit card

Let’s dive in!

How Cashback Credit Cards Work

Cashback credit cards reward you by returning a percentage of the money you spend on eligible purchases. This cashback can be:

1. Flat-rate cashback: A fixed percentage (e.g., 1.5%) on all purchases.
2. Tiered cashback: Different rates depending on the spending category, such as groceries, gas, or travel.
3. Rotating categories: Higher cashback rates (e.g., 5%) on specific categories that change quarterly.

Example

If you have a card offering 2% cashback on groceries and you spend $500, you’ll earn $10 back. Cashback is typically credited to your account as:

• A statement credit
• A direct deposit to your bank account
• Points you can redeem for rewards

Advantages of Cashback Credit Cards

1. Savings on Everyday Expenses
You earn money back on routine purchases like groceries, gas, and dining.

2. Simple Rewards Structure
Unlike other rewards cards, cashback is straightforward – you know exactly how much you’re earning.

3. Flexibility
Cashback can often be redeemed in multiple ways, including direct cash, gift cards, or account credits.

4. No Special Requirements
Unlike airline miles or hotel points, you don’t need to track complicated redemption systems.

Disadvantages of Cashback Credit Cards

1. Limited Earnings Potential
Some cards cap the cashback you can earn, particularly in high-rate categories.

2. High Interest Rates
If you carry a balance, the interest charges can outweigh the cashback rewards.

3. Annual Fees
Premium cashback cards often come with fees, which may not be worth it if you don’t spend enough.

Top Cashback Credit Cards in the US (2024)

1. Chase Freedom Unlimited
   • Cashback: 1.5% on all purchases; 5% on travel booked through Chase.
   • Annual Fee: $0
   • Additional Perks: Introductory 0% APR on purchases for 15 months.
2. Citi Custom Cash Card
   • Cashback: 5% on your highest spending category (up to $500/month); 1% on other purchases.
   • Annual Fee: $0
   • Best For: Maximizing rewards in a single category, like dining or travel.
3. Discover it® Cash Back
   • Cashback: 5% on rotating categories (up to $1,500/quarter); 1% on other purchases.
   • Annual Fee: $0
   • Unique Perk: First-year cashback match – Discover doubles all the cashback you earn in your first year.
4. American Express Blue Cash Preferred
   • Cashback: 6% on groceries (up to $6,000/year), 3% on transit, and 1% on everything else.
   • Annual Fee: $95 (waived for the first year)
   • Best For: Families with high grocery and transit spending.

Steps to Apply for a Cashback Credit Card

Step 1: Assess Your Spending Habits

• Identify categories where you spend the most (groceries, dining, travel).
• Choose a card that offers the highest cashback in those categories.

Step 2: Check Your Credit Score

• Most cashback credit cards require a good to excellent credit score (670 or higher).
• Use free tools like Credit Karma to check your credit score.

Step 3: Compare Card Offers

• Visit official card websites or use comparison tools like NerdWallet.
• Look for promotional offers such as signup bonuses or 0% APR periods.

Step 4: Submit an Application

• Apply online through the card issuer’s website.
• Provide required details such as income, Social Security number, and employment information.

Step 5: Approval and Card Activation

• Once approved, the card will arrive in 7–10 business days.
• Activate the card using the issuer’s app or phone service.

Tips for Maximizing Cashback Rewards

When using cashback credit cards, the goal is to get the most rewards while avoiding unnecessary costs. Here’s how you can use your cashback credit card smartly and efficiently:

1. Use the Card Strategically

What does this mean?
Focus your spending on categories where your credit card gives the highest cashback.

Example:

• If your card offers 3% cashback on dining and 1% on groceries, use it at restaurants and cafes for dining.
• For grocery shopping, you can use another card that gives higher cashback on groceries.

How to plan:

• Look at your credit card’s benefits.
• Know which categories (like groceries, dining, or gas) earn the most cashback.
• Use the card specifically for those types of purchases to maximize your rewards.

2. Avoid Interest Charges

Why is this important?
Credit cards charge high interest if you don’t pay the full balance on time. This can cancel out any cashback you’ve earned.

Example:

• Let’s say you earned $20 in cashback rewards, but if you don’t pay your balance, the credit card charges $25 in interest. You’re now losing money instead of saving it.

What to do:

• Pay the total amount (called your balance) shown on your statement by the due date every month.
• Set up automatic payments to avoid forgetting and getting charged interest.

3. Monitor Spending Categories

What are rotating categories?
Some credit cards offer higher cashback (like 5%) on specific categories that change every three months (quarterly). These are called “rotating categories.”

Example:

• January–March: 5% cashback on groceries.
• April–June: 5% cashback on gas stations.

How to manage this:

• Check your credit card’s calendar to see which categories are active each quarter.
• Adjust your spending to use the card more in those categories.
  • If groceries are the current category, buy groceries with the card.
  • When gas is the category, use the card for filling up your car.

Helpful Tip:
Set reminders in your phone to check the cashback categories every three months so you don’t miss out.

4. Combine Cashback Cards

Why use more than one card?
Different credit cards offer higher cashback in different categories. By using multiple cards, you can maximize the cashback you earn across all your purchases.

Example:

• Card A: 5% cashback on groceries.
• Card B: 3% cashback on dining.
• Card C: 2% cashback on all purchases.

When shopping for groceries, use Card A. When eating out, use Card B. For everything else, use Card C. This way, you’re always earning the maximum cashback possible.

How to manage multiple cards:

• Keep a small list of which card to use for each type of purchase (or make a note in your phone).
• Pay off the balances on all your cards every month to avoid interest charges.

Simple Example of Using All These Tips Together

Let’s say you have two cashback cards:

• Card 1: 5% cashback on groceries and gas (rotates categories every quarter).
• Card 2: 1.5% cashback on all purchases.

January to March

• Card 1’s category: Groceries
  • Use it for grocery shopping.
  • Pay the full balance to avoid interest.
• Use Card 2 for all other purchases.

April to June

• Card 1’s category: Gas
  • Use it at gas stations.
  • Use Card 2 for groceries and dining.

By keeping track of your cards’ benefits and paying your balance in full, you’ll maximize your cashback and avoid unnecessary costs.

Top 4 Credit Cards

1. Chase Freedom Unlimited

Best For: Those looking for a simple cashback card with no annual fee and a strong base rate for all purchases.

Key Features:

• Cashback Rate:
  • 1.5% on all purchases
  • 5% on travel purchased through Chase Ultimate Rewards
  • 3% on dining, including takeout and eligible delivery services
  • 3% on drugstore purchases
• Sign-up Bonus:
  • $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
• Annual Fee:
  • $0
• Intro APR Offer:
  • 0% APR on purchases for the first 15 months (then a variable APR of 20.24%–28.99%).

Advantages:

• No annual fee, making it great for those who want to maximize cashback without extra charges.
• 3% cashback on dining is competitive for food lovers or those who frequently order out.
• Introductory 0% APR is helpful for large purchases or balance transfers.

Disadvantages:

• Cashback is limited to certain categories (5% and 3%) and the rest is at a standard 1.5%.
• No bonus category for rotating categories, so if you’re looking for more specific category rewards, this card might fall short.

Who Should Apply:

• People who want a versatile, no-hassle cashback card that offers high rewards on travel, dining, and drugstore purchases without an annual fee.

2. Discover it® Cash Back

Best For: People who are willing to keep track of rotating categories and want a no-annual-fee card with a solid first-year cashback match.

Key Features:

• Cashback Rate:
  • 5% cashback on rotating quarterly categories (up to $1,500 per quarter, then 1%)
  • 1% on all other purchases
• Sign-up Bonus:
  • Cashback match: All the cashback earned in your first year is doubled by Discover.
• Annual Fee:
  • $0
• Intro APR Offer:
  • 0% APR for the first 14 months on purchases and balance transfers (then a variable APR of 17.24%–28.24%).

Advantages:

• The cashback match for your first year is a standout feature, effectively doubling your rewards.
• Rotating categories offer 5% cashback on categories like gas stations, grocery stores, and Amazon (you need to activate each quarter).
• No annual fee and a long 0% APR on balance transfers.

Disadvantages:

• You must keep track of the quarterly categories and activate them to get the 5% rate.
• The maximum limit of $1,500 per quarter in rotating categories means you may need other cards for purchases beyond that.

Who Should Apply:

• Those who are organized enough to track rotating categories and want to take advantage of the first-year cashback match to boost their rewards.

3. Citi Custom Cash Card

Best For: People who want a flexible card that automatically adjusts to their highest spending category each month.

Key Features:

• Cashback Rate:
  • 5% on your highest eligible spend category (up to $500 per month)
  • 1% on all other purchases
• Sign-up Bonus:
  • $200 after spending $750 on purchases in the first 3 months.
• Annual Fee:
  • $0
• Intro APR Offer:
  • 0% APR on purchases for the first 15 months (then a variable APR of 19.24%–29.24%).

Advantages:

• Automatic cashback maximization: The card automatically gives you 5% on the category you spend the most on, so you don’t have to worry about rotating categories or manually selecting.
• No annual fee and a solid introductory APR for those who need to finance big purchases.
• Offers a relatively high $200 sign-up bonus after minimal spending.

Disadvantages:

• The $500 cap on the 5% cashback per month means you may hit the limit quickly if you spend a lot in your top category.
• You only earn 1% on all other purchases, which is relatively low compared to other cards that offer higher rates for common categories.

Who Should Apply:

• People who have one or two categories where they spend a lot, like dining, gas, or groceries, and want to get 5% cashback on those purchases automatically.

4. American Express Blue Cash Preferred® Card

Best For: Families who spend a lot on groceries, and anyone looking to earn 6% cashback in that category.

Key Features:

• Cashback Rate:
  • 6% cashback on groceries (up to $6,000 per year, then 1%)
  • 3% on transit (including taxis, rideshares, and parking)
  • 1% on all other purchases
• Sign-up Bonus:
  • $350 statement credit after spending $3,000 in purchases in the first 6 months.
• Annual Fee:
  • $95 (waived for the first year)
• Intro APR Offer:
  • 0% APR on purchases for the first 12 months (then a variable APR of 20.24%–28.24%).

Advantages:

• 6% cashback on groceries is exceptional, especially for families or people who do a lot of their shopping at large grocery chains.
• 3% cashback on transit is great for commuters and those using ride-sharing services.
• The sign-up bonus is generous, especially for the level of cashback this card provides.

Disadvantages:

• $95 annual fee after the first year might not be worth it if you don’t spend enough in the high-reward categories.
• It doesn’t offer 5% on rotating categories like some other cards, so you might need additional cards to earn top rewards in other categories.

Who Should Apply:

• Families, commuters, and anyone who spends a lot on groceries and transit should consider this card, especially if you can take full advantage of the cashback categories.

Which Card is Right for You?

• Chase Freedom Unlimited is ideal if you want a straightforward, flexible cashback card with no annual fee and decent rewards across many categories.
• Discover it® Cash Back is perfect for people who can keep track of rotating categories and want to earn a lot in their first year thanks to the cashback match.
• Citi Custom Cash Card is a great option for those who want their card to automatically earn the highest cashback on their most frequent category.
• American Express Blue Cash Preferred® is best for families or people who spend a lot on groceries and transit and are willing to pay an annual fee for better rewards in these categories.

Conclusion

Cashback credit cards are an excellent way to make your money work harder for you. Whether you’re shopping for groceries, dining out, or traveling, these cards offer valuable rewards on everyday expenses. By understanding your spending habits and choosing the right card, you can enjoy significant savings.

If you’re ready to apply, start by assessing your needs and checking your credit score. With the right card in your wallet, you’ll be earning cashback in no time!