Editor’s note: This is a recurring post, regularly updated with new information and offers.
Credit card rewards come from your credit card spending. Rewards can take several forms — think points, miles and cash back. The latter is a popular credit card reward that often serves as the gateway for getting into the credit card rewards game.
With cash back rewards, you get a portion of your money back when you make purchases within specific spend categories — unless you’re using a flat rate cash back card that earns a specified percentage across 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. A cash-back card allows cardholders to accrue rewards with every purchase made using the card.
Cardholders who accrue rewards can typically redeem the cash back as a check, as a statement credit for the respective credit card or as a deposit into a bank account.
Some cards may offer a simple 2% cash back on all purchases; others can offer increased earning rates on specific categories, such as 5% back on gas and 3% at restaurants.
Related: Choosing a cash-back credit card
How to get cash back from a 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 rewards
Some cards, such as the Capital One Quicksilver Cash Rewards Credit Card, offer a flat rate on eligible purchases. The Quicksilver Cash Rewards offers unlimited 1.5% cash back on all purchases (see rates and fees).
The simple cash-back earning structure and easy-to-track rewards of this card (and other flat-rate rewards cards) are ideal for those seeking a simple method of getting cash back from a credit card.
Rotating rewards
The rotating category is a popular reward structure for cash-back cards. These cards split earning categories across quarters or specific time periods.
Take, for example, the Chase Freedom Flex®, which offers 5% cash back on up to $1,500 on combined purchases in bonus categories you activate each quarter. In the fourth quarter of 2023, for example, the Freedom Flex offered 5% cash back on purchases made with PayPal, wholesale clubs and charities (no longer available).
In addition to rotating rewards, the Freedom Flex also earns 5% cash back on travel purchased through Chase Travel℠; 3% on dining, including takeout and at 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 different places 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 quarterly bonus categories when they activate the offer each quarter, and they will not earn cash back in those categories over the maximum cap of $1,500 in purchases.
The information for the Discover it Cash Back card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Tiered rewards
Cash-back cards with tiered rewards offer a complex earning structure across various categories.
For example, the popular Chase Freedom Unlimited® earns cash back at the following rates: 3% on dining at restaurants (including takeout and eligible delivery services), 3% on drugstore purchases, 5% on travel purchased through Chase Travel plus 1.5% on all other purchases.
Cash back earned on this card can be redeemed as a statement credit, a check or bank deposit, or travel booked through Chase Travel.
This card offers a variety of bonus categories through which to earn rewards. Its lowest category earning, 1.5%, aims to help customers earn more than the usual 1% earned with many other cash-back credit cards.
Other structures
Some credit cards can take a unique approach to earning cash-back rewards. A great example is the Citi Custom Cash® Card (see rates and fees). The bonus-earning categories change based on spending habits. Cardholders earn 5% cash back on purchases in their top eligible spending category each billing cycle, on up to $500 monthly; they then earn 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, typically with high interest rates and fees.
How to redeem cash-back rewards
The process of redeeming cash back varies from issuer to issuer. However, it usually starts with logging in to your credit card account via the issuer’s website or mobile application.
From there, you can choose to receive your rewards as a statement credit, a deposit to a qualifying 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 hold other cards within the same credit card family, such as the Chase Trifecta, you can transfer points to more powerful credit cards. You can leverage the points for travel by transferring them to a loyalty partner.
Bottom line
Getting cash back from credit cards is possible — and if you strategize which cash back cards you apply for and which you use for certain purchases, you can earn back several hundred dollars annually.
Based on your expenses and existing cards within your wallet, opening a cash-back credit card from the same issuer or a card that offers a good return based on spending habits may make sense.
Related: How to choose a cash-back credit card
