In today’s ever-expanding world of credit card options, finding the perfect combination to maximize your cashback rewards can be both exciting and daunting. Among the plethora of choices available, one of the simplest and most rewarding setups is a no-annual-fee cash-back credit card configuration. In this comprehensive guide, we will unveil what we believe to be the Best Cash Back Credit Cards in 2023. While there are numerous credit cards to choose from, we will primarily focus on credit cards from major banks, although some credit unions may also offer generous cashback incentives depending on your specific circumstances.
1. Wells Fargo Active Cash Card
Our journey begins with the Wells Fargo Active Cash Card. This card boasts a lucrative sign-up bonus of 20,000 bonus points (equivalent to $200) after spending $1,000 within the first three months. However, the true gem of this card lies in its broad spectrum of multiplier categories. Cardholders enjoy an impressive 3x points return on expenditures at restaurants, travel expenses, gas, transit, popular streaming services, and phone plans, with 1x points on all other purchases. Notably, it also offers cell phone protection, providing up to $600 of coverage against damage or theft, with a $25 deductible and a limit of two paid claims per 12-month period. Additionally, this card is devoid of foreign transaction fees, making it an excellent choice for international use.
2. Capital One SavorOne Card
While the Wells Fargo Active Cash Card covers many popular categories, one significant gap in its offerings is the grocery category. This is where the Capital One SavorOne Card shines. With a sign-up bonus of $200 after spending $500 within the first three months, this card provides an unbeatable 3% cashback on dining, entertainment, popular streaming services, and groceries. Moreover, when you book entertainment and travel through the Capital One portal, you can earn an impressive 8% cashback on entertainment and 5% on hotels and rental cars. Complimenting this, the card comes with no foreign transaction fees and offers a complimentary Uber One membership through November 2024.
3. Citi Custom Cash Card
To further expand our cashback coverage, the Citi Custom Cash Card takes the spotlight. With a sign-up bonus of 20,000 bonus points or $200 after spending $1,500 on purchases in the first six months, this card offers a dynamic 5% cash back on purchases within your chosen top eligible spend category (up to the first $500 spent each billing cycle). Notably, it covers an array of categories, including drugstores, home improvement stores, and fitness clubs, adding versatility to your cashback setup. While there are other noteworthy 5% cashback cards, the Citi Custom Cash Card allows you to tailor your rewards, making it an excellent choice for those seeking customization.
4. PayPal Mastercard
If online shopping is a significant part of your spending, consider adding the PayPal Mastercard to your lineup. This card offers 3% cashback on PayPal purchases in addition to a 2% cashback on all other purchases. Given PayPal’s widespread acceptance as a payment option with many online merchants, this extra 1% can accumulate rapidly, making it an appealing choice for avid online shoppers.
5. Bank of America Customized Cash Rewards Card
If you prefer a card with an online shopping focus, the Bank of America Customized Cash Rewards Card offers a compelling option. Depending on your preferred reward status with Bank of America, you can earn between 3% and 5.25% cashback on online shopping. However, these multipliers are capped at $2,500 per quarter, making this card suitable for those with moderate online shopping habits.
6. Chase Amazon Prime Visa Card
For those who frequently shop on Amazon, the Chase Amazon Prime Visa Card is an excellent addition to your cashback setup. With a 5% cashback rate on Amazon.com and at physical Amazon stores, this card is tailored for Amazon enthusiasts. It also provides 5% back at Whole Foods, 2% cash back at restaurants and gas stations, and 1% cash back on all other purchases. While it technically requires an Amazon Prime membership (with a $139 annual fee), the card offers an immediate $100 Amazon gift card upon approval, effectively offsetting the membership cost. Alternatively, you can opt for the Amazon card, which offers 3% cashback on Amazon and at Whole Foods without the need for a Prime membership.
With these carefully selected cards, you can create an optimal cashback setup for 2023. Here’s a quick summary of the key features:
- Wells Fargo Active Cash Card: 3x points on various categories, no foreign transaction fees, and cell phone protection.
- Capital One SavorOne Card: 3% cashback on dining, entertainment, streaming, and groceries, with great travel rewards.
- Citi Custom Cash Card: 5% cashback on a customizable top category.
- PayPal Mastercard: 3% cashback on PayPal purchases and 2% on all other purchases.
- Bank of America Customized Cash Rewards Card: 3%-5.25% cashback on online shopping (capped).
- Chase Amazon Prime Visa Card: 5% cashback on Amazon and Whole Foods, plus other rewards.
While these five cards offer comprehensive cashback coverage, remember that there are numerous other options to explore in the world of credit cards. Your choice ultimately depends on your specific spending habits and preferences. These no-annual fee cards not only provide lucrative cashback rewards but also contribute positively to your credit history, ensuring long-term financial benefits. you can also try credit cards that have high limits.
Frequently Asked Questions (FAQs)
What is a cashback credit card?
A cashback credit card is a type of credit card that rewards cardholders with a percentage of their purchases as cashback or statement credits. This means that you can earn money back on your everyday spending, making it a popular choice for those looking to save on their expenses.
How do cashback credit cards work?
Cashback credit cards work by offering a certain percentage of cashback on eligible purchases. For example, if a card offers 2% cashback and you make a $100 purchase, you would receive $2 as cashback rewards. These rewards can accumulate and be redeemed as statement credits, checks, or sometimes as gift cards or discounts on future purchases.
What types of cashback credit cards are there?
There are various types of cashback credit cards, including:
- Flat-rate cashback cards: These offer a fixed cashback percentage on all purchases.
- Tiered cashback cards: These provide different cashback rates for specific spending categories, such as groceries, dining, or travel.
- Rotating category cards: These cards offer higher cashback rates that change periodically, often quarterly, for specific spending categories.
- Customizable cashback cards: Some cards allow you to choose or change your preferred cashback category to suit your spending habits.
Are there any annual fees associated with cashback credit cards?
Some cashback credit cards have annual fees, while others do not. It depends on the specific card and its benefits. Many card issuers offer no annual fee cashback cards to cater to a broader audience, making it possible to earn cashback without any extra cost.
How can I maximize cashback rewards with my credit card setup?
To maximize your cashback rewards, consider the following tips:
- Choose cards that align with your spending habits.
- Combine multiple cashback cards to cover various spending categories.
- Take advantage of sign-up bonuses and introductory offers.
- Pay your credit card balance in full each month to avoid interest charges.
- Keep an eye out for special promotions and bonus cashback offers from card issuers.
Can I redeem cashback rewards for anything I want?
Redemption options for cashback rewards vary by the card issuer. Common redemption methods include statement credits, checks, bank deposits, gift cards, and sometimes merchandise or travel bookings. Check your card’s terms and conditions to understand your specific redemption options.
Are cashback credit cards the same as rewards credit cards?
While cashback credit cards are a type of rewards credit card, they focus specifically on providing cashback rewards to cardholders. Rewards credit cards, on the other hand, can offer various types of rewards, such as travel points, miles, or merchandise, in addition to cashback.
Are there any drawbacks to using cashback credit cards?
While cashback credit cards offer many benefits, there are some potential drawbacks to consider:
- High-interest rates: If you carry a balance on your card, interest charges can negate the cashback benefits.
- Annual fees: Some cashback cards have annual fees that could offset the cashback earnings.
- Spending temptation: Cardholders may be tempted to overspend to earn more cashback, which can lead to debt if not managed responsibly.
Do cashback credit cards have foreign transaction fees?
Not all cashback credit cards have foreign transaction fees. Many no-annual fee cashback cards, especially those from major banks, come with no foreign transaction fees, making them suitable for international use. However, it’s essential to check the terms of your specific card to confirm whether foreign transaction fees apply.
How can I apply for a cashback credit card?
You can apply for a cashback credit card through the card issuer’s website or by visiting a local bank branch. The application process typically involves providing personal information, income details, and a credit check. Once approved, you will receive your card in the mail, and you can start using it to earn cashback rewards.