Finance

Simple Guide on How Cash Back Credit Card Works

Advertisements

Some cash back credit card pays you back a certain percentage of all eligible purchases. This payback can come as a check, bank deposit or statement credit. Lets guide you through the full details.

Generally, some cards earn a flat cash back rate. That simply means you can earn the same percentage on every transaction. Take for example, the Capital One Quicksilver Cash Rewards Credit Card earns 1.5% cash back on all purchases. Compare that with the Discover it Secured Credit Card, which earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% back on all other card purchases.

What Is a Cash Back Credit Card?

This type of credit card allows you to earn a certain percentage of your cards expenditure back and redeem your rewards for checks, statement credits or bank deposit. You could get a certain amount money back on every purchase you make with your cash back card.

For instance, say your card earns 1% cash back on all purchases. That percentage might not seem like much, but it can steadily grow. For example, if you spend up to $1,000, you can get $10 back just for using your card.

Do Cash Back Cards Actually Give You Cash?

Cash back cards usually give options of redeeming your cash back rewards as a statement credit, check or a direct deposit into your bank account. now if you choose to receive your cash back rewards as a check or bank deposit, you definitely are getting cash.

Are Cash Back Credit Cards Worth It?


A cash back credit card would work for you if you are able to pay off your balance each month. As you consider your options, take a close look at annual fees, bonus category rates and sign-up bonuses available to you.

How Does a Cash Back Credit Card Work?

Cash back credit cards pay you a certain percentage of each eligible purchase. The money may come as a check, bank deposit or statement credit.

Some cards earn a flat cash back rate, meaning you earn back the same percentage on every transaction. For example, the Capital One Quicksilver Cash Rewards Credit Card earns 1.5% cash back on all purchases. Compare that with the Discover it Secured Credit Card, which earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% back on all other card purchases.

  • best cash back credit card
  • 10% cash back credit card
  • cash back credit cards with no annual fee
  • cash back with credit card at register
  • double cash back credit card
  • best rewards credit card
  • 4% cash back credit card
  • best cash back credit cards 2022

A cash back credit card could work for you if you pay off your balance each month. As you consider your options, look at annual fees, bonus category rates and sign-up bonuses.

Is it good to get cash back on a credit card?

Possibly, a cash back credit card is a great way to put your card spending to work. Notably, if you pay off your balance in full every month, thereby avoiding interest and other fees, you might be able to earn a generous number of cash back rewards each year.

FULL LIST OF EDITORIAL PICKS: BEST CASH BACK CARDS

Click the card name to read our review. Before applying, confirm details on the issuer’s website.

Wells Fargo Active Cash® Card

Our pick for: Flat-rate cash back — high ongoing rate + incentives

Citi® Double Cash Card – 18 month BT offer

Our pick for: Flat-rate cash back — high ongoing rate

PayPal Cashback Mastercard®

Our pick for: Flat-rate cash back — PayPal users 

Capital One Quicksilver Cash Rewards Credit Card

Our pick for: Flat-rate cash back — bonus offer + 0% period for purchases

Bank of America® Unlimited Cash Rewards credit card

Our pick for: Flat-rate cash back — bonus offer + incentives

Alliant Cashback Visa® Signature Credit Card

Our pick for: Flat-rate cash back — high rewards for bigger spenders

SoFi Credit Card

Our pick for: Flat-rate cash back — investors / savers / borrowers

Blue Cash Preferred® Card from American Express

Our pick for: Bonus rewards — groceries, gas, commuting, streaming

Blue Cash Everyday® Card from American Express

Our pick for: Bonus rewards — popular 3% categories + no annual fee 

Chase Freedom Unlimited®

Our pick for: Bonus rewards — 5%/3% categories + high ongoing rate

Capital One SavorOne Cash Rewards Credit Card

Our pick for: Bonus rewards — high rates on dining, at grocery stores and more

Chase Freedom Flex℠

Our pick for: Bonus rewards — quarterly categories + cash bonus 

Discover it® Cash Back

Our pick for: Bonus categories — quarterly categories + cash-back match

Citi Custom Cash℠ Card

Our pick for: Customizable rewards — 5% cash back tailored to your spending

Bank of America® Customized Cash Rewards credit card

Our pick for: Customizable rewards — 3% categories you can adjust monthly

U.S. Bank Cash+® Visa Signature® Card – NerdWallet Exclusive

Our pick for: Customizable rewards — wide selection of categories