Credit card rewards come from your credit card spending. Rewards can take different forms — Think Points, Miles and Cash Back. The latter is a popular credit card reward that often serves as a gateway to getting into the credit card rewards game.
With cash back rewards, you get a portion of your money back when you make purchases in certain spending categories — unless you’re using a flat rate cash back card that earns a certain percentage of all purchases you make.
Let’s discuss how cash-back credit cards work, as well as the best ways to earn and redeem rewards to get the most bang for your buck when using the right card.
Can you get cash back from a credit card?
In short, yes — as long as you have a cash back card. Cash-back cards allow cardholders to earn rewards with every purchase made using the card.
Cardholders who earn rewards can typically redeem cash back as a check, as a statement credit to the applicable credit card, or as a deposit into a bank account.
Some cards may offer an easy 2% cash back on all purchases; Others may offer increased earning rates on certain categories, such as 5% back on gas and 3% at restaurants.
Related: Choosing a cash-back credit card
How to get cash back from credit card
With so many credit cards offering cash back, it can be difficult to understand how to earn cash back and rewards across different spending categories.
Flat-rate awards
Some cards, viz Capital One Quiksilver Cash Rewards Credit CardOffers flat rates on eligible purchases. Quiksilver Cash Rewards offers unlimited 1.5% cash back on all purchases (see rates and fees).
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This card’s (and other flat-rate rewards cards) simple cash-back earning structure and easy-to-track rewards are ideal for those looking for an easy way to get cash back from a credit card.
Revolving awards
Revolving categories are a popular rewards structure for cash-back cards. These cards divide earnings categories into quarters or specific time periods.
Take Chase Freedom Flex®, for example, which offers 5% cash back up to $1,500 on combined purchases in bonus categories you activate each quarter. In the fourth quarter of 2023, for example, Freedom Flex offered 5% cashback on purchases made with PayPal, wholesale clubs and charities (no longer available).
In addition to rotating rewards, Freedom Flex also earns 5% cash back on travel purchased through Chase Travel℠; 3% on dining including takeout and drugstores and 1% on all other purchases.
Another card that offers rotating categories is the Discover it® Cash Back. When activated, it earns 5% cash back on purchases at various locations each quarter, up to a quarterly maximum of $1,500, in addition to unlimited 1% cash back on all other purchases.
It’s important to note that cardholders only earn in the Quarterly Bonus category when they activate the offer each quarter, and they won’t earn cash back in that category over a maximum limit of $1,500 in purchases.
Information for the Discover It Cash Back Card has been independently collected by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Tiered awards
Cash-back cards with tiered rewards offer complex earning structures across different categories.
For example, the popular Chase Freedom Unlimited® earns cash back at the following rates: 3% on restaurant dining (including takeout and eligible delivery services), 3% on drugstore purchases, 5% on travel purchased through Chase Travel plus 1.5% on all others. purchases.
Cash back earned on this card can be redeemed as a statement credit, check or bank deposit or travel booked through Chase Travel.
The card offers various bonus categories through which to earn rewards. Its lowest category earning, 1.5%, is meant to help customers earn more than the typical 1% earned with many other cash-back credit cards.
other structures
Some credit cards may take a unique approach to earning cash-back rewards. A great example Citi Custom Cash® Card (See Rates and Fees). Bonus-earning categories vary based on spending habits. Cardholders earn 5% cash back on purchases up to $500 monthly in each billing cycle in their top eligible spending category; Then they get 1% cash back on all other purchases.
Cash Back Vs. Cash Advance
“Cash back” refers to a percentage of the purchase amount returned to the customer, often offered by credit cards or retailers as an incentive to spend. On the other hand, a cash advance involves borrowing money from a credit card or financial institution, usually with high interest rates and fees.
How to redeem cash-back rewards
The procedure for redeeming cash back varies from issuer to issuer. However, it usually starts with logging into your credit card account through the issuer’s website or mobile app.
From there, you can choose to receive your rewards as a statement credit, a deposit into an eligible bank account, or a check mailed to you. Some cards automatically apply cash back as a statement credit. Additional options include redeeming cash back for gift cards or shopping with select retailers.
Some cards earn points instead of cash back. If you have other cards in the same credit card family, ie Chase the trifecta, you can transfer points to more powerful credit cards. You can redeem points for travel by transferring them to a loyalty partner.
The bottom line
Getting cash back from credit cards is possible — and if you strategize which cash back cards you apply for and which ones you use for certain purchases, you can get several hundred dollars back a year.
Depending on your spending and the existing cards in your wallet, it may make sense to open a cash-back credit card from the same issuer or a card that offers better rewards based on spending habits.