“Advertiser Disclosure: Just Start Investing LLC is part of an affiliate sales network and receives compensation for sending traffic to credit card partner sites. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers.”
Using a cash back card is easy and straight-forward. Though, not all cards that offer cash back are created equal. Below is a list of the 10 best cash back credit cards of 2021.
Some cards offer a flat rate of cash back, and others offer more complex and tiered rewards. You can compare and review the various cash back cards available to you below.
You can also apply for the best cash back cards here:
What is a Cash Back Credit Card?
A cash back credit card is a very straight-forward type of credit card. You get rewarded whenever you use your card on a percentage basis.
Cash back credit cards are simple – they allow you to earn cash when you spend money with your card.
For example, lets say you have a cash back card that offers 1.5% cash back. If you spend $1,000 in one month, you will also earn $15 in cash rewards. It’s like buying everything at a slight discount.
10 Best Cash Back Credit Cards of 2021
1. Chase Freedom Unlimited
- Cash Back Rewards: 1.5% cash back on all purchases
- Sign-Up Bonus: $200 after you spend $500 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: None
- Other Perks: Free credit score, trip cancellation insurance, extended warranty
The Chase Freedom Unlimited card is the standard cash back card.
It’s a flat rate credit card that offers an unlimited 1.5% cash back rate on every purchase. Plus, the card evolved in 2020, and now offers better rewards in new categories, including travel, dining, drugstores, and grocery stores (not including Walmart or Target, on up to $12,000 in spending in your first year).
It also has a large welcome bonus considering it’s a no annual fee card. For these reasons, it tops the list of the best cash back credit cards.
2. Chase Freedom Flex
- Cash Back Rewards: 5% cash back on rotating categories that you must activate each quarter (up to $1,500 per quarter), 1% cash back on everything else
- Sign-Up Bonus: $200 after you spend $500 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: 3%
- Other Perks: Free credit score, trip cancellation insurance, extended warranty
The Chase Freedom Flex card is very similar to the Chase Freedom Unlimited in terms of the secondary perks it offers. However, they have one clear difference, and that’s their rewards structure.
The Chase Freedom Unlimited card offers 1.5% on every purchase, while the Chase Freedom Flex offers 1% on every purchase, but has a different category every quarter in which it offers 5% cash back. For example, the Chase Freedom Flex card might offer 5% at all gas stations one quarter, and 5% off at Amazon the next quarter.
The Chase Freedom Flex actually replaced the Chase Freedom card in 2020 within Chase’s credit card lineup. Now, similar to the Chase Freedom Unlimited Card, the Chase Freedom Flex offers better rewards in new categories, including travel, dining, drugstores, and grocery stores (not including Walmart or Target, on up to $12,000 in spending in your first year).
3. Citi Double Cash Card
- Cash Back Rewards: 2% cash back (1% cash back on general purchases, excluding gift cards, and 1% additional cash back as you pay off those purchases)
- Sign-Up Bonus: None
- Annual Fee: $0
- Foreign Transaction Fee: 3%
- Other Perks: Purchase protection, free concierge service
The Citi Double Cash Card has one of the highest cash back rates among no annual fee credit cards currently available. This makes it a great option to use in combination with a rotating rewards card to maximize your cash back earnings. For example, combining it with the Chase Freedom Flex card above, you could earn 5% back on rotating categories and 2% back on everything else (instead of 1%).
The offset to having such a high rewards rate is that this card does not offer any sign-up bonus.
4. Blue Cash Preferred® Card from American Express
- Cash Back Rewards: 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit, 1% cash back on everything else (cash back in earned in the form of a statement credit)
- Welcome Bonus: Up to $350 back – earn 20% back on Amazon.com purchases on the Card within the first 6 months of Card Membership, up to $200 back; plus, earn $150 back after you spend $3,000 in purchases on the Card within the first 6 months of Card Membership
- Annual Fee: $95 (waived the first year)
- Foreign Transaction Fee: None
- Other Perks: Purchase protection, return protection, entertainment access
- *terms apply; rates and fees
American Express is known for offering premium credit cards, and this cash back card is no different.
It’s one of the few cards that made the list of best cash back credit cards that has an annual fee, but with that annual fee it also offers high cash back rates. If you frequently shopping at grocery stores, you will be hard pressed to find a better rate than the 6% that this card offers.
5. Blue Cash Everyday® Card from American Express
- Cash Back Rewards: 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 everything else (cash back in earned in the form of a statement credit)
- Welcome Bonus: Up to $250 back – earn 20% back on Amazon.com purchases on the Card in the first 6 months of Card membership, up to $150 back; plus, earn $100 back after you spend $2,000 in purchases on your new Card within the first 6 months of card membership
- Annual Fee: $0
- Foreign Transaction Fee: 2.7%
- Other Perks: Purchase protection
- *terms apply; rates and fees
The Blue Cash Everyday® Card from American Express is a pared-back, basic version of the Blue Cash Preferred® Card from American Express.
It offers a similar cash back structure, with high rewards on U.S. supermarkets, but the cash back percentage is much smaller. To accompany the smaller rewards, this card does not charge an annual fee.
6. American Express Cash Magnet Card
- Cash Back Rewards: 1.5% cash back on all purchases
- Welcome Bonus: $150 after you spend $1,000 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: 2.7%
- Other Perks: purchase protection
The American Express Cash Magnet Card is the AMEX take on a standard cash back credit card.
Like the Chase Freedom Unlimited card, it’s a great option for anyone looking for their first cash back credit card.
7. Capital One Quicksilver Cash Rewards Credit Card
- Cash Back Rewards: 1.5% cash back on all purchases
- Sign-Up Bonus: $150 after you spend $500 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: None
- Other Perks: Purchase protection, travel accident insurance, concierge perks
The Capital One Quicksilver Cash Rewards Credit Card is another great, but standard cash back credit card option.
The 1.5% cash back rate is nothing new, but like with most Capital One cards, there are no foreign transaction fees. That makes this card a great travel companion if you are planning to go abroad.
8. Capital One Savor Cash Rewards Credit Card
- Cash Back Rewards: 4% cash back on dining and entertainment, 2% cash back at grocery stores, 1% cash back on everything else
- Sign-Up Bonus: $300 after you spend $3,000 in the first three months
- Annual Fee: $95 (waived the first year)
- Foreign Transaction Fee: None
- Other Perks: Purchase protection, travel accident insurance, concierge perks
The Capital One Savor Cash Rewards Card is one of the most premium credit cards on the list of best cash back credit cards of 2021.
For those who spend a lot of money every month on dining out and entertainment, this is likely the best credit card for you. Plus, the annual fee is waived the first year and they offer a $300 welcome bonus, so if used responsibly, you’ll reap a lot of rewards from this card in year one.
Bonus: Check out the Capital One SavorOne Cash Rewards Credit Card for a no annual fee version of this credit card.
9. Bank of America Cash Rewards
- Cash Back Rewards: 3% cash back on a category of choice, 2% cash back on grocery store and wholesale club purchases, 1% cash back on everything else
- Sign-Up Bonus: $200 after you spend $1,000 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: 3%
- Other Perks: Purchase protection, free FICO score monitoring
The Bank of America Cash Rewards credit card is one of the most unique cards on the list. To start, you get to choose one category in which you earn 3% cash back. You can choose from gas, online shopping, dining, travel, drug stores, or home improvements and furnishings. The only catch is that you are limited to a $2,500 combined limit on the 2% and 3% categories each quarter.
Still, the ability to earn 3% cash back on a category of your choosing with a no annual fee cash back card is an amazing benefit.
10. U.S. Bank Cash Plus Visa Signature Card
- Cash Back Rewards: 5% cash back on 2 categories of your choice, 2% cash back on your choice of one everyday category, 1% cash back on everything else
- Sign-Up Bonus: $150 after you spend $500 in the first three months
- Annual Fee: $0
- Foreign Transaction Fee: 2-3%
- Other Perks: Purchase protection, travel discounts
The U.S. Bank Cash+ Visa Signature Card is similar to the Bank of America Cash Rewards card in that you can choose categories to earn higher rewards in.
In this case, you choose two categories in which you earn 5% cash back in, and one category in which you earn 2% cash back. You make your selections every quarter, and are limited to $2,000 worth of purchases every quarter for these bonus categories.
Apply Today:
There are plenty of great cash back rewards cards available. Apply for your favorite, and start earning cash back today:
How do Cash Back Credit Cards Work?
Cash back credit cards are a simple rewards credit card.
Using a cash back credit card is like buying everything on sale – you get a discount off everything you purchase.
Generally, there are two major steps to how a cash back credit card works:
- You earn cash back
- You redeem cash back
Step 1: You earn cash back every time you make a purchase. For example, if you have the Chase Freedom Unlimited Card, you will earn 1.5% on every purchase you make. If you buy a $50 sweater, you earn $0.75. If you pay for a $100 dinner, you earn $1.50.
Step 2: At the end of the month, you receive all the cash back you earned the month prior. Depending on what card you have, you can then put your cash back towards your next bill, or redeem them in a different manner.
Types of Cash Back Credit Cards
There are four major types of cash back credit cards. Understanding these options can help ensure that you shop in the right card category for you.
1. Flat Rate
A flat rate credit card is the most basic cash back credit card. With these cards, you earn a flat rate on everything you purchase. Typically, this rate will be 1.5%, but some cards do offer more.
Flat Rate Card Examples:
- Chase Freedom Unlimited: Earn 1.5% cash back on everything you purchase.
- Citi Double Cash Card: Earn 2% cash back on everything you purchase. You earn 1% at the time of paying for the item or service, and the other 1% as you pay off your credit card balance.
2. Tiered
A tiered credit card or multi-tier credit card offers different cash back rates depending on what category you purchase. The most common example is offering 3-6% cash back on a specific category, like groceries, and then 1% cash back on everything else.
Tiered Card Examples:
- Blue Cash Preferred® Card from American Express: Earn 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and on transit, and 1% cash back on everything else.
- Blue Cash Everday Card from American Express: Earn 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, and 1% cash back on everything else.
3. Rotating Categories
Rotating category cards, or bonus category cards, are very similar to tiered cash back cards. In this case, you earn a higher cash back percentage, typically around 5%, in a category that rotates every quarter. Usually you’ll earn 1% cash back year round on everything not in that category.
It’s important to note that you need to opt in to the rotating category in order to get the higher rewards.
Rotating Category Card Examples:
- Chase Freedom Flex: Earn 5% cash back on rotating categories that you must activate each quarter (up to $1,500 per quarter), and 1% cash back on everything else.
4. Customizable Categories
Last, there are some cards that allow you to customize categories in which you can earn higher rewards. The customization is a huge perk, and usually you can change your bonus category once a year, if not more frequently.
Customizeable Category Card Examples:
- Bank of America Cash Rewards: Earn 3% cash back on a category of choice, 2% cash back on grocery store and wholesale club purchases, and 1% cash back on everything else.
- U.S. Bank Cash Plus Visa Signature Card: Earn 5% cash back on 2 categories of your choice, 2% cash back on your choice of one everyday category, and 1% cash back on everything else.
How to Pick a Cash Back Credit Card
Choosing a cash back credit card is all about finding the right fit for you. There are a few factors that you should look for in order to properly compare and choose the best credit card.
Annual Fee
Most cash back credit cards have no annual fee, but not all of them.
Cards with annual fees typically have better rewards, and sometimes will even waive the fee in the first year.
Though, keep in mind, if a card has an annual fee, you either have to continue to pay it year after year, or cancel the card eventually and lose out on the credit history you build with it.
Cash Back Type
There are four different types of cash back cards:
- Flat Rate Cards
- Tiered Cards
- Rotating Category Cards
- Customizable Category Cards
It’s important to understand your spending and budget to help determine which type of card is best for you.
Secondary Perks
Credit cards usually offer secondary perks that don’t always have a direct monetary benefit – like cash back. Here is a list of other card benefits to consider:
- Fraud Protection
- Purchase Insurance
- 24/7 Customer Service
- Extended Warranties
- Concierge Service
- Travel Insurance
- Airport Lounge Access
- TSA Pre-Check Credit
- Free Checked Bags When Flying
- And More
Foreign Transaction Fee
If you will be using a cash back credit card abroad, you’ll want to ensure it does have not have any foreign transaction fee. If it does, you might get caught paying an additional 3% fee on everything you purchase.
Sign-up Bonus
A sign-up bonus, or welcome bonus, is a common offering from premium credit cards to attract new users. Most cash back credit cards offer a sign-up bonus, usually between $100 – $300. The catch is that you need to spend a certain amount of money in the first 2-3 months after opening the card in order to get it.
The sign-up bonuses are smaller than what you would see from some premium travel rewards cards, but a couple hundred dollars is definitely a nice perk to take advantage of if you can.
Cash Back Redemption Options
Most cash back cards offer similar redemption options:
- Statement credit
- Check
- Bank deposit
- Gift cards
- Charitable donation
You should ensure that the card you choose has a redemption option that you want to use.
Regular APR
An annual percentage rate (APR) is the interest that you pay on any overdue balance on a card. Ideally, you will never have to deal with an APR if you pay your card back on time and in full every month.
However, if you do have to pay an APR, the lower it is, the better.
Keep in mind: Some cards do offer a 0% intro APR for new cardholders or with a balance transfer, which in some cases can come in handy.
Explore Your Cash Back Options and Apply:
How to Maximize Your Cash Back Credit Card
Getting a cash back credit card is a great first step, here’s what you can do to maximize your card rewards:
Use Your Card
A cash back credit card can only benefit you if you use it. It’s a much better option than using a debit card or cash, where you won’t get any rewards.
Just remember, only spend on your card what you can afford to pay. If you carry a balance and have to pay the high interest rates that most credit cards charge, you will lose out on any benefits that the card was providing.
Pay Your Card On Time
As mentioned, you need to pay your card back on time and in full every month.
Yes, most cash back credit cards offer amazing rewards and great secondary perks. However, these can quickly be cancelled out if you have to pay interest and late fees every month.
Use a Multiple Card Strategy
Using a multiple card strategy can be a great way to maximize rewards.
For example, if you pair a rotating category credit card with a flat rate credit card, you could earn 5% cash back in the category of the quarter and 1.5% to 2% back on everything else if you use the cards appropriately.
Just be sure you apply for credit cards wisely so that you don’t ding your credit score in the short term by signing up for too many cards.
Earn the Sign-up Bonus
Of course, if your card offers a sign-up bonus you should do what you can to earn it. Typically, these sign-up bonuses come with a caveat of needing to spend anywhere from $500 to $3,000 in a two or three month period after account opening.
To be clear, that does not mean breaking your budget and going on a shopping spree to hit the sign-up bonus amount.
If you will not naturally obtain the bonus through your normal expenses, there are strategic things you can do to hit the bonus. Like pre-paying rent or gym memberships, or stocking up on dry goods next time your at the grocery store.
Again, you want to ensure you can pay back whatever you charge on the card in full at the end of the month.
Avoid Fees
Last but not least, you should avoid fees.
Whether it’s the APR, late fees, or foreign transaction fees, keeping these costs to a minimum will help ensure you maximize your card benefits.
Learn More About Credit Card Benefits:
Ways to Redeem Your Cash Back
Cash back credit cards are the simplest type of rewards card when it comes to redeeming benefits.
Unlike like general rewards cards and travel rewards cards, where transferring points to maximize their value can seem like a full-time job, redeeming your cash back is easy.
Here are the common options you have when redeeming cash back rewards:
- Receive a statement credit
- Have a check sent in the mail
- Deposit to a checking or savings account
- Redeem as gift cards
- Charitable donation
- Convert to points
- Use when shopping online (i.e. with Amazon)
Not all options above are supported by all cash back cards. Check a card’s redemption options before applying.
Are Cash Back Credit Cards Worth It: Pros and Cons
Is a cash back credit card right for you?
Below are some of the pros and cons of this type of credit card to help you decide if a cash back credit card is worth it.
Cash Back Credit Card Pros
Simple Rewards: The simple rewards structure that most cash back cards offer make them easy to use and maximize.
Sign-up Bonuses: The are usually small, but most cash back cards offer a sign-up bonus.
Usually No Annual Fee: Most cash back cards do not charge an annual fee. This makes them a great option for someone’s first rewards credit card.
Builds Credit: Since most cash back cards don’t have an annual fee, they are good options to hold onto over a long period of time to build credit.
Cash Back Credit Card Cons
Limited Perks and Travel Benefits: Cash back credit cards are simple cards that don’t offer a ton of secondary perks that you might find on premium travel cards.
Need a Good Credit Score: Most cash back credit cards require a good credit score in order to get approved.
Penalized with Monthly Balance: Like most credit cards, if you carry a balance on a cash back credit card, you will get penalized.
Cash Back Credit Cards Frequently Asked Questions (FAQ)
Question: How do cash back credit cards work?
Cash back credit cards reward you on a percentage basis every time you use them. For example, they will give you 1.5% cash back on every purchase, and you can redeem this cash back in a variety of ways. Note, some cards vary their cash back rewards depending on what category you spend in.
Question: Do cash back credit cards actually give you cash?
You won’t literally get a bunch of dollar bills sent to your home by using a cash back card. Instead, you are given options on how to use the “cash back” that you earn, such as getting a statement credit off your next bill, or depositing the money to a bank account.
Question: What is the highest paying cash back credit card?
This depends on what card category you are looking into. Most flat rate cards offer 1.5% cash back, but some may go as high as 2% or 2.5%. When looking at category cards, it’s not uncommon to see cash rewards in the 5% or 6% range.
Question: Is cash from a cash back card taxable?
Generally speaking, most cash back rewards are viewed as a rebate or discount off a purchase, and not as income. If that is the case, you do not need to pay taxes on your cash back.
Question: What are other types of credit cards?
There are many types of credit cards besides cash back credit cards, the most common include: premium credit cards, travel credit cards, hotel credit cards, airline credit cards, no annual fee credit cards, student credit cards, and secured credit cards. Some of these categories do overlap.
Question: Which is better, cash back or points?
At a high level, cash back is much easier to manage compared to reward points. However, rewards points can sometime be more valuable than straight cash back.
Question: What are the best business credit cards?
There are many cash back business card offerings. Some popular ones include the Ink Business Cash Back Card, the Capital One Spark Cash for Business, and the American Express Blue Business Cash Card.
Final Word: 10 Best Cash Back Credit Cards of 2021
The best cash back credit cards offer great rewards, are easy-to-use, and don’t charge many fees. They are a good solution for most consumers to start getting rewarded on their everyday spending.
Apply today and get your own cash back credit card:
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Just Start Investing is a personal finance website that makes investing easy. Learn the simple strategies to start investing today, as well as ways to optimize your credit cards, banking, and budget. Just Start Investing has been featured on Business Insider, Forbes, and US News & World Report, among other major publications for its easy-to-follow writing.
This is a great list. I already have a Chase Freedom sadly so can’t take advantage of the nice new bonus but will share! Our go to card has been the Sapphire b/c we travel a lot but we’ll have to revisit that after this year if travel is still restricted to a lot of places.
I also enjoy the Sapphire because of the great travel benefits, as well as dining!