Cashback credit cards are now a must-have for smart shoppers who want to earn rewards on stuff they buy every day.
Table of Content
- Best cashback credit cards for groceries in 2024
- How to maximize cashback rewards on dining out
- Top cashback credit cards for travel expenses
- Cashback rewards vs. points: which is better?
- How to redeem cashback rewards effectively
- Avoiding common pitfalls with cashback credit cards
- Best cashback credit cards for online shopping
- Cashback rewards for gas and transportation costs
- How cashback rewards impact your credit score
- Cashback rewards for utility bills and subscriptions
- Combining cashback rewards with other discounts
- Best no-annual-fee cashback credit cards available
- Strategies to earn more cashback rewards monthly
No matter if you spend mostly on groceries, travel, or other things, knowing how to get the most from cashback rewards can really help your wallet. With options like the Bank of America® Customized Cash Rewards and U.
S. Bank Cash ® Visa Signature® Card offering tailored rewards, it’s essential to choose a card that aligns with your spending habits. Here are 12 important things about cashback credit cards to help you make smart choices and save more.
Best cashback credit cards for groceries in 2024
Since most families spend a lot on groceries each month, it’s a great way to earn cashback.
Some cards, like Bank of America’s Customized Cash Rewards, give you 6% back on groceries (or other categories you pick) for the first year. Other options, such as the American Express Blue Cash Preferred®, provide 6% cashback at U.
S. supermarkets (up to $6,000 per year, then 1%). Before picking a card, think about yearly fees, spending caps, and how rewards work. The Blue Cash Preferred costs $95 a year but gives better rewards than free cards. Pick a card that fits your grocery habits, and you could save big in the long run.
How to maximize cashback rewards on dining out
Eating out is another great way to earn cashback.
Lots of cards give extra rewards for restaurants – usually 3-5% back. The U.
S. Bank Cash ® Visa Signature® Card allows you to select dining as one of your 5% cashback categories each quarter. Cards like Capital One SavorOne give 3% back on all dining and entertainment spending. For even more savings, use your card with restaurant loyalty programs or food delivery apps. Hook up your card to Uber Eats or DoorDash to get cashback plus any other deals. Keep an eye out for special categories or time-limited deals that can help you earn more.
Top cashback credit cards for travel expenses
Though many travelers go for miles cards, cashback cards can work well for travel costs too.
Bank of America’s Travel Rewards card gives 1.5% back on everything – flights, hotels, and car rentals included.
For higher rewards, the Chase Freedom Flex℠ includes travel as a rotating 5% cashback category during certain quarters. For travel abroad, pick cards that don’t charge extra fees on foreign purchases. Some cards also give travel perks like rental car insurance, which is nice on top of cashback. Compare these extras to find the best travel card for you.
Cashback rewards vs. points: which is better?
Whether cashback or points are better depends on how you spend and what you want.
Cashback is simple – you get money back on what you buy, either as account credit, checks, or bank deposits. Points programs (like Chase or Amex) take more work but can be worth more for travel or airline miles.
1% cashback means 1 cent per dollar, but points might get you 1.5 cents or more if you use them right. If you want things easy, cashback cards are probably best. But if you don’t mind putting in work, points cards could pay off more.
How to redeem cashback rewards effectively
How you cash in your rewards can really affect how much they’re worth.
You can usually choose to get your rewards as account credit, bank deposits, or gift cards. Using rewards to lower your bill is like getting a discount.
Putting cashback in your bank gives you spending money, while gift cards sometimes give you extra (like $55 for $50 in rewards). Cards like Citi Double Cash let you cash out rewards whenever you want, no minimum needed. Some make you save up a certain amount first. Pick a card with redemption choices that fit how you handle money.
Avoiding common pitfalls with cashback credit cards
Cashback rewards are great, but watch out for these mistakes.
If you don’t pay your bill in full, interest can wipe out your rewards fast. For example, if you earn 2% cashback but pay 18% APR on carried balances, the math doesn’t work in your favor.
Some cards have special categories that change every few months – you need to activate them to get bonus rewards. Forget to activate? You’re missing out on free money. Watch out for yearly fees – make sure the rewards are worth it. Finally, beware of overspending just to earn rewards; the key is to use the card for purchases you’d make anyway. Avoid these traps, and you can enjoy cashback without hurting your finances.
Best cashback credit cards for online shopping
Since more people shop online now, there are cards made just for that.
Amazon’s card gives 5% back at Amazon and Whole Foods – perfect for Amazon addicts.
PayPal’s card gives 2% back on everything you buy online, no yearly fee. Discover it sometimes makes online shopping a 5% cashback category. Use shopping portals to get even more cashback when you buy online. Use these tricks together to save more when shopping online.
Cashback rewards for gas and transportation costs
If you drive a lot, gas rewards can really pile up.
Costco’s card gives 4% back on gas (on the first $7,000 each year). PenFed’s card gives 5% back on gas anywhere.
If you use public transportation or ride-sharing services, cards like the Wells Fargo Autograph℠ Card offer 3% cashback on transit, including taxis, rideshares, and tolls. Before picking a gas card, see if rewards work everywhere or just certain places. Also look for extras like roadside help or rental car deals.
How cashback rewards impact your credit score
Using cashback cards the right way can help your credit.
Paying on time (35% of your score) and not using too much credit (30%) matter most. Pay your bill in full every month and try to use less than 30% (10% is even better) of your credit limit.
But applying for too many cards at once can hurt your score temporarily. Apply for cards slowly and only get ones you really want. Having different types of credit (like cards and loans) can help your credit in the long run. Use cashback cards smartly to earn rewards and keep good credit.
Cashback rewards for utility bills and subscriptions
People often forget they can get cashback on bills and subscriptions.
Some cards, such as the U.S.
Bank Cash ® Visa Signature® Card, allow you to select utilities as a 5% cashback category. Amex Blue Cash Preferred gives 6% back on streaming services like Netflix. Put your bills on autopay with your cashback card to earn more. Just ensure you’re not incurring convenience fees that outweigh the rewards. Some cards, like Amex Platinum, even pay you back for streaming – up to $20 a month. Use these benefits to save on regular bills.
Combining cashback rewards with other discounts
Combine cashback with other deals to save even more.
For instance, using a cashback card through a shopping portal like Rakuten or Honey can earn you additional percentage back on purchases. Coupon codes and store promotions can further reduce costs before applying cashback.
During sales events like Black Friday or Amazon Prime Day, this strategy becomes even more powerful. Some cards also offer limited-time partnerships with retailers—Chase Freedom Flex℠ has previously included PayPal and Walmart as 5% categories. Always check for overlapping opportunities, but remember to prioritize needs over wants to avoid unnecessary spending. With careful planning, combining discounts and cashback can lead to significant financial benefits.
Best no-annual-fee cashback credit cards available
No-annual-fee cashback credit cards are ideal for those who want rewards without extra costs.
The Citi® Double Cash Card offers 2% cashback—1% when you buy and 1% when you pay—with no annual fee. The Chase Freedom Unlimited® provides 1.
5% cashback on all purchases plus 5% on travel booked through Chase. For rotating categories, the Discover it® Cash Back gives 5% cashback in quarterly areas (up to $1,500 in purchases, then 1%) and matches all cashback earned in the first year. These cards are excellent for beginners or those who prefer simplicity. While they may lack premium perks like travel insurance, their value lies in accessible rewards that don’t require offsetting fees.
Strategies to earn more cashback rewards monthly
To consistently earn more cashback rewards, adopt strategic spending habits.
Start by using the right card for each purchase category—for example, one card for groceries, another for gas, and a third for general spending. Track rotating categories and activate them promptly to avoid missing out.
Pay attention to sign-up bonuses; many cards offer $150–$200 after spending a certain amount within the first few months. Refer friends if your card offers referral bonuses. Finally, consider adding authorized users to increase collective spending (and rewards), provided everyone manages balances responsibly. By tailoring card usage to your lifestyle and staying organized, you can steadily increase monthly cashback earnings without changing your budget.
In conclusion, cashback credit cards offer versatile opportunities to earn rewards on everyday spending. From groceries and dining to travel and online shopping, selecting the right cards and using them strategically can lead to substantial savings.
Remember to pay balances in full, avoid unnecessary fees, and leverage stacking opportunities where possible. Whether you prefer no-annual-fee options or premium cards with higher rewards rates, there’s a cashback solution for every financial situation. Start optimizing your spending today by applying for a card that matches your habits—your wallet will thank you.
