If you love the concept of cash back — and, let’s face it, who doesn’t — you’ve probably considered applying for a cash back credit card.
Cash back credit cards are hardly a one-size-fits-all proposition: You’ll want to be sure the card you ultimately apply for fits your lifestyle and personal financial habits. This guide can help you make an informed selection before you apply.
How do cash back credit cards work?
A cash back credit card is one of the most popular types of rewards credit cards available. When you make qualifying purchases with your cash back credit card, you accumulate cash rewards.
Certain cash back cards offer flat-rate rewards, meaning the percentage of cash back you accrue is consistent for every purchase you make with them.
Tiered rewards cards typically offer elevated cash back rates for select spending categories, such as groceries, gas and travel, or for spending at specific retailers, along with a baseline flat-rate rewards system for other spending categories.
Some cards may also include rotating bonus categories, offering accelerated cash back for select categories. However, the categories tend to change and are offered on a limited rotating basis. Also note that cardmembers may have to enroll to take advantage of these programs. So, you may earn extra rewards for dining out in the summer, but more on department store spending during the holidays.