Cash Back Credit Cards

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How to choose a cash back credit card

By: Connor Wrenn

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How to choose a cash back credit card
Cash back cards are great if you’re new to the rewards game, or if you want a low-fuss way to earn some returns on your credit spending. Instead of worrying about nebulous “points” and “miles,” you get your returns in the form of cash. Sound good? Here are some tips on choosing a cash back credit card

Rewards structure
You’ll find that credit card issuers structure cash back rewards in two ways.

Option one is the flat rewards systems, a single percentage rate cash back on all items. If you’re looking for the simplest cash back rewards, this is your go-to card. Not only is the math easy, but many of these cards have no caps on the amount of cash back can receive. Plus, with the right credit, you can maximize those rewards around 1.5-2 percent cash back.

Option two involves categories. You’ll receive a different percentage of your cash back based on where you shop. It will require some active participation on your part, but the potential rewards can be far greater. Sometimes, issuers set the categories and their percentage benefits in stone. Other times, the targets move; issuers will offer a special category that rotates once a quarter, complete with a cash back percentage as high as 5 percent, in some cases. Others even allow you to select your own personal category for cash back rewards! Those who are more rewards-savvy will find plenty of ways to maximize cash back through these offers.

Sign-up bonuses
New cardholders who spend a specific amount of money within the first few months of owning their cash back card may be eligible for a bonus of up to $200. Make sure you understand your average total spend to make sure you can hit the spending target.

Cash back caps
Some cards put caps on the amount of spending eligible to receive cash back. Others will be unlimited. Unlimited is always nice, but if you won’t ever spend close to the cap, you may stand to receive more rewards from cards with caps that offer better rates for your lifestyle.

Rewards redemption
What good is cash back if it’s hard to redeem it? Look for offers that give you multiple options to receive your rewards. For example, some cards allow you to apply the cash as a statement credit, as credit in an online shopping portal, or as a check for the dollar amount. If you can’t find a program with all three options, choose your offer based on your preferred method of receiving the cash.

Want more information?
Our cash back credit card reviews can help you make your final decision once you narrow it down to a few contenders. The details in these reviews can better inform you about which cards best fits your needs.

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