Best Cash Back Credit Cards in January 2025

10 top credit cards with cash back

• Winner / best cash back credit card: Capital One Savor Cash Rewards Credit Card
• Best 2% cash back credit card: Wells Fargo Active Cash^® Card
• Best 5% cash back credit card: Chase Freedom Flex℠
• Best cash back business card: Capital One Spark Cash Plus
• Best cash back business credit card with no annual fee: Capital One Spark Cash Select (see rates & fees)
• Best cash back credit card for gas: Citi Custom Cash^® Card
• Best cash back credit card for groceries: Blue Cash Preferred^® Card from American Express*
• Best restaurant cash back credit card: Chase Freedom Unlimited^®
• Best cash back credit card for students: Capital One Savor Student Cash Rewards Credit Card
• Best cash back credit card for bad credit: Discover it^® Secured Credit Card

Flat-rate cash back credit cards earn cash back at the same rate on every purchase. The rewards rate is typically between 1% and 2%. The Wells Fargo Active Cash^® Card and Citi Double Cash^® Card give a set amount of cash back on all purchases.

Many cards offer tiered reward categories. This means you earn bonus cash back on specific categories of spend and 1% cash back on everything else. It’s common to find cards that offer 3% or higher cash back on groceries, gas, dining and more.

Examples of tiered category cards include the Capital One Savor Cash Rewards Credit Card and Blue Cash Preferred^® Card from American Express.

Some cash back cards offer elevated cash back rates that rotate on a monthly or quarterly basis. There’s typically a cap on how much you can earn for these categories, and you earn the regular cash back rate after meeting the cap.

Rotating cash back card examples include the Chase Freedom Flex℠ and Discover it^® Cash Back credit cards.

Store credit cards help you earn cash back at a specific store and might limit you to purchases with that retailer. These cards usually have higher APRs, so make sure to pay off your card balance each month. The Costco Anywhere Visa^® Card by Citi and the Prime Visa are store credit cards.

Your credit score is the primary factor in determining which cash back credit cards you can qualify for. Most of the best cash back cards require good to excellent credit — that is, a FICO Score of 670 or greater.

Ultimately, you’ll want to maximize your rewards rate, and that means tailoring your credit cards with cash back rewards to your spending.

For example you might use the Blue Cash Preferred^® Card from American Express for U.S. supermarket and U.S. streaming services, the Citi Custom Cash^® Card for a category you spend heavily in like fuel, home improvement or travel and the Wells Fargo Active Cash^® Card for everything else. This ensures you earn at least 2% on all your spending, with some expenses netting you an extra 6% cash back.

Once you’ve narrowed down the card choices, you’ll want to do a comparison. Take into account the various bonus categories and how much you typically spend in each either monthly or yearly.

Yes, you can get cash back with a credit card depending on its rewards rate. Rewards are not earned as cold, hard cash but are accrued on your account until you select a redemption method. Many people like to apply for their cash back as a statement credit, but others redeem it for gift cards or have it sent to their savings account.

Yes, you can earn cash back on credit cards that you use at gas stations. The Citi Custom Cash^® Card is a flexible cash rewards gas credit card that lets you earn 5% on your first $500 in purchases in your top spending category each month.

The best cash back credit card is the one that gives you rewards on the items you buy most — and this varies for everyone. For example, a college student who lives on campus and has a meal plan would be better off with a flat-rate cash back card. Meanwhile, a couple who commutes to work might want to consider a tiered cash back card that earns a higher cash back rate on gas or transit purchases.

Typically, cash back earned on a credit card won’t be taxable, since the IRS considers it a rebate on what you’ve spent. However, if you receive a bonus without having to do any spending to earn it, that’s considered taxable income.

Credit cards provide cash back rewards to incentivize card usage and customer loyalty. Cardholders receive a percentage of their purchases back as a cash reward, reducing their overall expenses. In the meantime, credit card companies aim to increase spending and profits through interest charges. This creates a win-win relationship for consumers and card issuers.

Yes, cash back rewards can expire. Rules vary between card issuers, with banks like Wells Fargo and Capital One allowing you to keep rewards stashed away until your account closes. Cash back rewards from U.S. Bank, on the other hand, expire after 36 months — even if your account is open.

Duong "Katie" Pham, Ph.D. Associate Professor of Finance, Georgia Southern University

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
Yes, cash back is a great additional benefit for credit card users. The purpose of using credit cards responsibly is to build a history of excellent credit so you can tap into the larger loan markets. The cash back feature is an added benefit that helps users save money while using credit cards.

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
These words motivate the consumers in making decisions. The consumers themselves when wanting to purchase something have an internal desire to do so. However, they are oftentimes bounded by budget and opportunity costs. These words help create external motivation that makes it easier for the consumers to make decisions by adding one more item on the benefit side of their decision-making chart.

What are a few sensible ways in which consumers can utilize their cash back rewards?
The best way to utilize cash back rewards is to use the cash back balance and apply towards payments of the credit card balance. Credit card users can also ask for a paper check or ask for the cash reward to be deposited directly to their bank account. Another great way to utilize cash back rewards is to convert them into gift cards to use at other stores.

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
Cash back rewards program works well at keeping customers loyal. Customers love to accumulate points or rewards so seeing their rewards adding up will discourage them from finding an alternative option. Many times the fear of losing what they have accumulated overtime is what keeps customers from parting with a business, a brand or a product. For a business, the cost of giving away rewards to keep their current customers is much cheaper than the cost of acquiring new customers.

Charles Lindsey, Ph.D. Associate Professor of Marketing, University at Buffalo

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
It really depends on the individual circumstances of the person. There are so many “so-called” loyalty cards out there: cash back, flexible cash back, rewards, airline, etc. My recommendation as to the specific type of loyalty credit-card would depend on the person’s spending patterns. One needs to also take into account the annual-fee, from a cost-benefit standpoint. That said, cash is fungible (vs. other more specific loyalty cards like airlines).

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
Those are charged words when it comes to the “psychology of consumption.” Similar to the word “sale” or “free,” these terms often function like a neon flashing sign in the minds of consumers. Hence, consumers can engage in a kind of faulty mental calculus where they overweight the value of these benefits relative to the costs. For example, when someone drives across town to get the lowest price per gallon on gas but winds up actually paying more per gallon than had they gone to the corner gas station nearest their home (when you factor in fuel and time to drive across town). So, the danger is when these terms cause consumers to “chase” the rewards or reward tiers by spending more than they typically would.

What are a few sensible ways in which consumers can utilize their cash back rewards?
Don’t spend any more than you would otherwise spend in a given month just because you are getting cash back on purchases in general (or on certain categories of purchases). Use the cash back to pay off your credit card (or to pay down your credit card balance). Given credit-card interest rates, that’s a pretty great “reward” or “deal” in and of itself!

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
They definitely move the loyalty needle. Otherwise, we wouldn’t have seen the proliferation of such cards over the past decade plus. However, with so many of these cards nowadays, it’s becoming less of a “point of differentiation” for financial institutions and more of a “point of parity.” It’s almost expected now by consumers that the differentiators in this space offer percentage of cash back, flexibility, etc.

Mark Alpert Professor of Marketing, The University of Texas at Austin

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
Yes, I would recommend a cash back credit card, provided it pays at least 2% on all purchases. Some cards pay only 1.5%, which is perhaps not as valuable as frequent flier miles or hotel points, depending on one’s activity and status with these travel partners. These days, frequent flier miles are worth only about 1% of what you’ve spent; so 2% is definitely more valuable.

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
These tend to be “buzz words,” and their impact likely depends on the perceived value of the “bonus” or “reward.” The “devil is in the details,” implying that in order to be effective, the “bonus” and/or “rewards” should be meaningful and valuable to the consumers, and, ideally, designed with knowledge of the specific consumers’ habits and preferences.

What are a few sensible ways in which consumers can utilize their cash back rewards?
Most important, pay the entire balance due on your credit cards each period (I recommend “auto pay” in which the credit card company draws funds on your bank account to pay the entire balance on the date that payment is due). Now that you are getting cash back and not paying in credit card interest, you can spend or invest the cash rewards on products or services, or as accumulated, investments that will provide good returns

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
As long as the cash back is worth more than other incentives offered by competitors’ programs (or credit cards), consumers will continue to favor using the credit cards that give them valuable cash back, and/or they will tend to favor buying from companies that reward their loyalty with incentives that provide meaningful experiences (e.g., airline lounges, upgraded flights or concert experiences) or combo deals (BOGO, “buy one get one” (free), and the like).