Cash-back credit cards are a popular option for people who travel and shop frequently. However, can you get cash back from a credit card? If you are applying for a credit card for the first time, you might be pessimistic that the cash-back feature is just to trick you into applying for the card. While it is true that most credit cards offer cash back feature to tempt you into applying for the card, the cash-back rewards are the major selling points of credit cards. If you are not already using a cash-back credit card, you are losing significantly on a chance to earn from your purchases.
A popular credit card like the Quicksilver from Capital One rewards you for every purchase you make. Can you get cash back on a capital one credit card? The Quicksilver card lets you earn a flat rate of 1.5 percent on all your purchases, which is significant. You also get other benefits like a sign-up bonus and zero introductory APR.
Why Use Cash Back Credit Card?
The cash back cards will not charge you more than you already pay for your everyday shopping, but they reward you whenever you use the card to pay for your purchases. You will not even notice as the cards do not require you to do anything else to earn cash back other than using the card to pay for your purchases. They offer simplicity with a straightforward process. Nevertheless, it is necessary to note that different cash back credit cards have different terms and conditions. You may find a card that is letting you earn from all your purchases and another that offers cash-back only from select purchases. You may also come across a card with a cash back offer that is as high as five percent or as low as one percent.
When looking for a credit card to use on your day-to-day purchases, you should make sure that it offers cash-back rewards. Although most credit cards have cash-back benefits, you may not be able to get cash-back from your credit card if you choose a card that does not provide the rewards. Most credit cards that do not offer cash back are usually cards for people with poor ratings. If you have bad credit, you might struggle to get a card that provides attractive cash-back rewards. The credit cards for bad credit that offer cash-back may not be attractive as the percentage is usually very low. If your credit history prevents you from getting the top credit cards, you should apply for cash-back credit cards for people with bad credit ratings and rebuild your scores. Most of the cards will upgrade you automatically to a better cash-back reward card as your credit improves.
Types of Credit Cards That Give Cash Back Rewards
The cash-back credit cards come in three types. They are categorized based on how they give out rewards.
1. Flat-rate Based Cash Back Cards
The flat-rate based cash back cards are more straightforward as they offer the same rate on all your purchases. They do not have a limit on the amount you can earn. In this category, the cards usually offer a standard rate of one percent cash-back, with a few offering 1.5 percent standard rates on all purchases. Although the low reward rate may look unattractive in flat-rate cards, the fact that you earn for every purchase you make means that you can reap handsome rewards. The flat-rate cards are ideal if you are looking for simplicity.
Features of a Good Flat-Rate Card
- Attractive sign-up bonus of over $100
- $0 annual fees
- 5 percent or higher cash-back rate
2. Tiered Cash Back Cards
If you are willing to put more effort into maximizing your cash-back reward, the tiered cash-back cards may be more appealing. The cards in this category offer higher rates on specific groups and lower standard rates on other purchases. Some cards have a cap limiting the earning on a highly rewarding group of up to a certain amount. If your spending reaches the specified amount, you will not receive rewards on future purchases until the next cycle.
You should go for the tiered card if you are spending more on products categorized in the higher-earning grouping. The gains will be more on a tiered card than when you are using a flat rate card if the majority of your purchases are on higher rewarding categories. Therefore, before you go for the tiered cash-back credit card, you must look at the spending categorizations. If your spending is categorized in low reward earning categories, you could be better with a highly rewarding fixed credit card.
Features of an Excellent Tiered Credit Card
- High rewarding categories should match your budget areas
- The reward percentage should be 3 percent or more
- It should have a zero annual fee or elevated rewards rates
- Sign up bonus should be $100 or more
3. Bonus Category Cards
Cards in this category have a high cash-back rate on specific groups that change every few months and a low flat rate for all other purchases. These cards require more work, as you will have to opt-in or activate the bonus rewards every time. The bonus category cards are best for people willing to go the extra mile to maximize the benefits. The spending for the high rate may be capped. If you are willing to put more effort, the high bonus rate can give you a considerable amount of money. You may also get more cash-back if you pair your bonus category with a tiered and fixed-rate credit card.
Features of a Good Bonus Category Card
- It should not have an annual fee
- Bonus categories should match your spending
- You should have a minimum sign up bonus of $100
How to Get The Most Cash Back From Your Credit Card
A study by J.D Power found that about 1 in 5 credit card holders own cards with rewards and fees that do not match their spending habits. The answer to can you get cash back from a credit card depends on where and how you spend your money as well as the taste of complexity. A flat-rate card is your best bet if you like keeping things simple, but a tiered or a bonus card can help you get more cash-back if you are willing to put more thought into your card. If your goal is to maximize the rewards you can get from your cards, you should own each type of card and use them strategically.
As you seek to maximize your card returns, you should keep in mind that your efforts are only worth it if you are paying your balance in full each month. Failure to clear your balance can incur interest charges, which reduces the value of your rewards. If you are carrying a balance, you should look for a low-interest credit card.
Which Are The Best Credit Cards With High Cash Back Rewards Rate?
1. Citi Double Cash Card: The Fixed Rate Card with Amazing Rewards Rate
It is rare to find a fixed-rate credit card offering a 2 percent rewards rate, but the Citi Double card has become an exception with a combined 2 percent rewards rate. With this card, you get 1 percent whenever you use the card and another 1 percent when you make your payment. In addition to the exceptional reward rate, you also get to enjoy 18 months zero percent introductory APR on balance transfers. However, this card does not offer a sign-up bonus, but the generous reward rate makes up for the lack of welcoming gifts.
- $0 annual fee
- 0 percent on balance transfers
- Combined 2 percent rewards rate
- It has the best rewards rate
- It offers an introductory APR period
- It does not charge an annual fee
- It does not have a sign-up bonus
- It has a minimum redemption of $25
2. American Express Blue Cash Preferred : The Highest Rewarding Tiered Credit Card
If you are looking to earn serious cash-back on your everyday shopping, the American Express is your card. It has a high $95 annual fee, but if you spend more than $31 weekly in supermarkets, the card is worth the investment. Alternatively, the American Express Cash Everyday Card is a good choice as it does not have a once a year fee. The Blue Cash Preferred gives you up to 6 percent cash back on select categories like U.S. streaming subscriptions and supermarket purchases. The 6 percent on supermarket purchases is capped at $6000, after which you start earning 1 percent. The card further offers 3 percent rewards at gas stations.
- $250 statement credit
- 6 percent cash-back
- 0 percent introductory APR
- $95 annual fee
- It has mind-boggling reward rates
- It has introductory APR on purchases and balance transfers
- It has a big welcoming bonus
- It has a yearly fee
3. Chase Freedom : The Standout Bonus Category Card
With generous cash-back rewards of up to 5 percent, the Chase Freedom is an excellent choice for individuals looking to get the maximum cash-back from a credit card. The 5 percent cash back change every three months. The card also comes with an eye-catching bonus of $150 if you spend $500 in your first 90 days. This card stands out in the bonus category due to its high rewards rate on common expenses. Groups that have been featured in the past include grocery stores, gas stations, restaurants, and drugstores, among others that people visit on their day to day purchases. The card also offers a long 0-percent introduction period of up to 15 months. You can also get a Chase credit card under pre approval offer.
- $0 annual fee
- 1 to 5 percent rewards rate
- 0 percent APR on purchases and balance transfers
- $150 signing up bonus
- It does not have an annual fee
- It offers a reasonable huge welcome bonus
- It provides high 5 percent rewards on normal purchases
- You will have to activate the bonus every three months
Ways That You Can Redeem Your Cash Back From A Credit Card
When choosing the best card with exceptional cash-back rewards, you should also factor how you will redeem the amount. Your efforts will be in vain if you choose a card that does not offer flexible ways to redeem your cash-back. You should also keep an eye on the terms and conditions of the card. Some cards have a minimum amount that you can redeem while others have an expiry. Different credit cards offer different ways to redeem cash-back. You can redeem your cash-back in the following ways:
- Statement Credit: Statement credit is a straightforward way to redeem your cash-back. This method reduces the balance in your card by the amount you redeem. To redeem, you will log into your account and apply the cash-back reward to your statement. Nevertheless, you should make sure that you meet all the terms and conditions of the provider, like the minimum card payment to activate redemption.
- Bank Deposit or Check: You can make a cash transfer from your card account to your bank account. You may also claim your reward in the form of a check. However, you should make sure that you meet the minimum threshold to unlock the check redemption. With bank deposits, some card providers require you redeem to an account that you have used in the past to make a payment or through an associated bank. You can withdraw cash in the following ways:
- How to Get Cash with Just a Credit Number: For you to withdraw your cash-back through an ATM, you will need to set up a PIN with your card provider. On most occasions, you will only need to login to your credit account and create a PIN for your card. However, If you are not comfortable setting up a PIN, you will have to learn how to get cash from a credit card without pin. First, you will need to check whether your card issuer allows cash withdrawal without a pin. If yes, you will only need to walk to a local branded bank branch and present your credit card and photo ID to withdraw your cash-back without a PIN.
- How to Withdraw Money from Credit Card Online: If you are looking for a convenient way to withdraw your money online, your options are limited to the following two ways;
- Travel Purchases: Some credit cards give cardholders an option to redeem their cash back for travel purchases like airplane seat reservations and hotel reservations through their travel partners. You may find exclusive offers that give you more value.
- Gift Cards: Although the use of gift cards is a bit restrictive, it comes with additional benefits. Most providers will reward you for using a gift card, and thus, you should weigh your options to maximize the benefits. You should ensure the gift has the same value as the money you could have withdrawn.
- Pay with Points: This option lets you use your accrued points to pay for your purchases. This method only works when you are shopping online. It may also be restrictive as you can only work with retailers that accept points. Before you pay with points, you should make sure the value matches the maximum you will get if you withdraw cash.
The answer to can you get cash back from a credit card depends on many factors that range from the type of card you are using as well as your tastes and preferences. Although most credit cards offer cash-back, you can maximize your rewards by selecting the card that matches your budget and purchase habits. There is no need for you to get a card with a high reward rate if you do not manage to meet the terms and conditions of the card or even activate the reward system.