Update the way you use your credit cards. With cash back credit cards, you are able to earn money on your purchases. When using your card to make purchases you have already planned for, you can help to reduce your debt. The key is to select cash back reward credit cards that benefit your shopping habits. Look for cards that offer the biggest percentages in categories that count the most for your budget. Start here with three of the top picks for cash back cards based on the different types of reward credit cards currently on the market.
About Cash Back Credit Cards
Before jumping headfirst into the best reward credit cards, take a look at the benefits of these cards. One of the simplest ways to add money to your wallet is with cash back credit cards. When you utilize reward credit cards and debit cards that offer cash back for every purchase, you help reduce the cost of using the card. This cuts down on the amount you spend in annual fees and interest rates for your purchases.
Consumers prefer the cash reward program over other incentives, such as discounts on future purchases. As a result, these popular programs are available with most major credit card companies. According to Nerd Wallet, you can expect to receive anywhere from one to six percent in cash back on these reward credit cards.
Types of Cash Back Card Programs
When selecting a cash back card program, look at the way the rewards program is structured. If you are earning a flat-rate, as with the PayPal Business Debit MasterCard, you earn the same percentage or amount on all purchases at all times.
A tiered cash back card will pay you a set percentage on most purchases while giving you a better rate in certain categories. The Capital One Savor Cash Rewards Credit Card is a good example of this. When you are choosing a tiered credit card, look at the bonus categories and consider whether you will benefit.
The third type of cash back credit cards to consider is bonus category cards. These are on par with tiered cards except the categories that have higher rates change. For example, you might receive a special offer for your bonus category card that gives you 5 percent cash back on travel purchases for a limited time.
Another good example of a bonus cash back credit card is the Wells Fargo Cash Wise Visa Card. This card features a 1.8 percent cash back reward on mobile wallet purchases using Google Pay or Apple Wallet. These purchases must be made within the first 12 months of opening the account for the card. The use of mobile wallet purchases is a unique value proponent to consumers who regularly use this form of payment. This also shows how variable these bonus rewards programs can be.
Top Picks for Reward Credit Cards
Now let’s move on to the top three reward credit cards among the three categories of tiered, flat-rate, and bonus cards. Each of these cash back credit cards is produced by a separate major card company. This will give you the greatest flexibility in choosing the best card for you. For example, if you currently are a Capital One account holder, you may want to opt for the Capital One Savor card based on using the same company. On the other hand, you also want to take into account the specific features and benefits that come with each card. Choose cash back credit card that best serves your household needs for reducing your expenses.
PayPal Business Debit MasterCard Flat-Rate Cash Reward
For individuals who have a PayPal account, there are a couple of debit cards available to account holders. One of these cards provides you with a generous cash back program. The PayPal Business Debit MasterCard offers users the ability to get flat-rate cash back with benefits. You will earn an unlimited 1 percent cash back on purchases that are eligible. This includes all purchases you make that are:
- Purchases you sign for in person using MasterCard as the card vendor for processing
- Transactions you make over the telephone using MasterCard
- Online purchases made using the card via MasterCard
If you withdraw cash from your account via an ATM or take a cash advance, then you will not earn the 1 percent on these activities. However, for individuals who receive income either through online product and/or service sales, and receive payment via PayPal, this reward debit card program is excellent. In addition, the card features:
- No minimum balance requirement
- No annual fee
- No liability for unauthorized charges
One caveat, you have to earn at least $1 when receiving the one percent cash back in a month before you earn cash back. Final verdict: As long as you make MasterCard debit card purchases in stores, online, or over the phone using the card, you earn one percent in return no fees attached.
Capital One Savor Cash Rewards Credit Card
One of the best reward credit cards for receiving tiered cash back is the Capital One Savor Cash Rewards Credit Card. You earn unlimited 4 percent on purchases in the dining and entertainment category. If you use this card for grocery spending each month or to pay for all of your entertainment, then you can reap generous rewards. For reference, if you make $2,000 in dining and entertainment purchases in a single month, you would earn $80 back on your purchases.
In addition:
- Earn 2 percent at grocery stores
- Earn 1 percent for everything else
- The card offer also comes with a $500 cash back reward when you spend $3,000 in the first three months
An insider’s tip: when you use the card for dining and entertainment purchases—at that 4 percent tier—it comes with 0 percent APR for the first 15 months you have the account. Plus, right now the Capital One Savor card comes with an added perk of a Postmates Unlimited subscription good through December 2019. While this is not a direct cash back reward, if you are currently a monthly Postmates subscriber, this will save you that cost directly.
Plus, you can spend as much as you want on the card and you have no limit on the cash back rewards. A note, while there is not an annual fee for the first year, you will have to pay $95 annually beyond that. As long as you are earning more than $95 in cash back rewards, then you are going to be able to benefit from this cash back reward credit cards program.
Discover it Cash Back
The Discover it Cash Back reward credit card features 5 percent cash back, which makes this a winner among the bonus category cards. You are able to earn 5 percent on up to $1,500 in spending every quarter. The only trick is you need to choose the bonus categories that you want, i.e., Amazon, gas stations, etc., beforehand.
At the same time, this card has no annual fee. Plus, at the end of the first year of owning the card, Discover will match 100 percent all the money you earn in cash back. That means you will double your cash back with this reward credit card. It’s hard to beat a great deal like that. Then again, each of these credit cards offers a fantastic opportunity to increase your household income.
Advertiser Disclosure: Dollar-sense.com is an independent, advertising-supported comparison service. The offers that appear on this site are from companies from which dollar-wizard receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Dollar-sense does not include all companies or all offers available in the marketplace. Dollar-sense may use other proprietary factors to impact offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
