How to Choose The Best
Cash Back Card for You
Opening a new cash back credit card is a great way to start getting something back for the purchases you make. If used wisely, you can earn points for each dollar you spend and redeem them for cash, merchandise or travel vouchers.
If you're ready to apply for a cash back credit card, follow our quick step-by-step guide to find the right card for you.
1. Choose a card in your credit score range. With any card you apply for, make sure it's within your reach, or your credit score range, for the best chance of being approved. If you have a credit score of 620 but are applying for a rewards credit card, chances are you'll have a hard time getting approved. To help guide you, check out the average approved credit score for the card you're interested in to see if it's likely that you'll be approved.
2. Choose a card with an annual fee only if the benefits outweigh the cost. If you apply for a card with a $95 annual fee, but your cash back rewards greatly exceed $95 for the year, the fee may be worth it. While some cash back cards come with an annual fee, it's easy to find a fee-free card, like the Blue Cash Everyday Card from American Express.
3. Choose a card with a high cash back percentage. Not all cash back rewards programs are created equal. Some offer 1 percent cash back on purchases, while others, like the Discover It Card, offer more. Read all of the details of the rewards program before you choose your card.
4. Choose a card with a cash back sign-up bonus. Many cash back credit cards offer bonus cash back if you spend a specified dollar amount in the first few months of card membership. This can be a great way to maximize your cash back benefits right out of the gate. While these bonus cash back offers change from time to time, you can typically find an offer for $100 or $200 cash back after spending $500 in the first few months of card membership. The BankAmericard Cash Rewards™ Credit Card is currently offering an introductory bonus of $100, if you spend $500 in the first 90 days.
5. Choose a card with unlimited cash back capability. Some rewards cards cap the amount of cash back you're permitted to earn in a calendar year. Make sure to pick a card that will let you earn as much cash back as you like, like the Capital One QuicksilverOneSM
6. Choose a card with easy rewards redemption. Look into the redemption policy for the card you choose to make sure it's simple, quick, and straightforward. The Chase Freedom has a simple program that lets you credit your cash back earnings toward your statement balance, shop with your cash back in the Ultimate Rewards site, or receive a check for the dollar amount of the cash back you've earned.
Once you have your new cash back card, make sure to use it responsibly and keep these things in mind:
- Getting cash back for purchases could tempt you to overspend. Remember to keep your credit card balance below 30 percent of your available credit limit. This will help you limit your spending, but more importantly, it will keep your credit healthy.
- Pay attention to opt-in categories. Some cash back cards will give you additional cash back on certain categories that rotate throughout the year. However, you typically have to opt-in to receive this benefit. Set up an email or calendar alert to remind you when it's time to opt-in to each new spending category.
- Pay off your balance each month. Getting rewarded for spending can be great, but if you start using your card more frequently, don't neglect to pay it off. If you have a balance remaining on your card at the end of the month, you'll end up paying interest on that amount, which can essentially negate your cash back earnings.
- Use your cash back bonus where it counts. If your card comes with additional cash back for quarterly categories, make a note of those categories so that you know where to use your credit card. That way, you'll get a bigger cash back boost.