Best Cashback Credit Cards: Unlimited vs SpecificBest Cashback Credit Cards: Unlimited vs. Category-Specific Rewards

Choosing between¹ flat-rate cash back cards and bonus category cards is a big decision. Flat-rate cards give you a steady cash back rate of 1% to 1.5%. Some top picks even offer up to 2% on all buys¹. On the other hand, bonus category cards can give you up to 5% cash back in certain areas. But, the rate on other purchases is usually around 1%¹.

Your spending habits and what you prefer will guide your choice. If you like things simple and predictable, flat-rate cards might be best¹. But, if you’re okay with a bit more effort to get more rewards, bonus category cards could be better. They offer more rewards in areas where you spend a lot¹.

Key Takeaways

Flat-rate cash back cards offer a consistent rewards rate, typically between 1% to 2%, on all purchases.
Bonus category cash back cards can provide up to 5% cash back in specific spending categories, but may have a lower flat rate on other purchases.
The choice between flat-rate and bonus category cards depends on your spending habits and personal preferences.
Flat-rate cards offer simplicity, while bonus category cards have the potential for higher rewards with strategic planning.
Considering your spending patterns and aligning your card choice accordingly can help you maximize your cashback earnings.

Understanding Cash Back Credit Cards

Cash back credit cards are a simple way to earn rewards on your daily spending. They give you a percentage of cash back on your purchases. You can use this cash back as a statement credit, a direct deposit, or a check². To get the most from a cash back credit card, it’s important to know the different types and their features.

What are Cash Back Credit Cards?

Cash back credit cards are rewards cards that give you a part of your spending back as cash. This cash back can be used for statement credits, direct deposits, or checks². The way you earn cash back varies. Some cards give a flat rate on all spending. Others offer more cash back in certain spending areas.

Types of Cash Back Credit Cards

There are four main kinds of cash back credit cards:³

Flat-rate cash back cards earn between 1% and 2% cash back on all spending³.
Fixed bonus category cards give 2% to 6% cash back in certain areas like groceries, gas, dining, or online shopping, and at least 1% on other spending³.
Rotating bonus category cards offer 5% cash back in changing categories that switch each quarter³.
Cardholder’s choice cards let you pick a bonus category each month or billing cycle for higher cash back rates³.

Picking the right cash back credit card depends on how you spend and what you like. Some cards have fees but offer more rewards, while others don’t have fees but still give good cash back³. Many also have great sign-up bonuses and 0% APR deals³.

Cash back credit cards offer more than just cash rewards. They can include travel insurance, purchase protection, extended warranty coverage, and discounts³. Knowing the special features and how different cards work can help you pick the best one for your spending and financial goals.

Flat-Rate Cash Back Cards

Flat-rate cash back credit cards give you a fixed percentage of cash back on all purchases⁴. Most of these cards offer 2% cash back, up from the old 1%-1.5%⁴. They are simple because you don’t have to worry about bonus categories or activating rewards.

The Citi Double Cash® Card is a great example, giving you 2% cash back on all purchases⁴. This is different from cards like the Blue Cash Preferred® Card from American Express, which gives 6% cash back on U.S. supermarkets up to $6,000 a year⁴. Cards like the Chase Freedom Flex let you earn 5% back on certain categories each quarter⁴.

Pros and Cons of Flat-Rate Cards

Flat-rate cards are great because they give cash back on all your purchases without limits⁴. They are easy to use to get the most cash back⁴. But, the rewards rate is usually lower than bonus category cards, around 1% to 2%⁴.

Choosing between flat-rate and bonus-category cards depends on how you spend and what you like⁴. Flat-rate cards are simple, while bonus-category cards can give you more cash back on specific items⁴. For example, the Bank of America® Customized Cash Rewards card lets you pick a category for 3% cash back and 2% at grocery stores and wholesale clubs⁵.

Card	Rewards Rate	Annual Fee
Wells Fargo Active Cash	2% cash back	$0
Alliant Cashback Visa Signature	2.5% on up to $10,000, 1.5% thereafter	$0
Capital One SavorOne Cash Rewards	3% on dining, entertainment, streaming, 2% at grocery stores	$0
Citi Custom Cash	5% on top monthly spend category (up to $500)	$0
Capital One SavorOne Student	3% on dining, entertainment, streaming, groceries	$0

“Flat-rate cash back credit cards offer a simple and hassle-free way to earn rewards on all your purchases, making them an attractive choice for many consumers.”

In summary, flat-rate cash back cards are easy to use and don’t require tracking categories or activating rewards. They may offer less cash back than bonus-category cards, but their simplicity and flexibility are why many people choose them⁴⁵.

Best Cashback Credit Cards: Unlimited vs. Category-Specific Rewards

There are two main types of cashback credit cards: flat-rate and bonus category cards. Bonus category cards give you more cash back on certain spending areas. For example, you might get 3% to 5% cash back on groceries, gas, dining, or online shopping, but only 1% on other purchases⁶.

Some cards have fixed categories, while others change every quarter or year. You need to activate these changing categories to get the higher rewards⁷.

Pros and Cons of Bonus Category Cards

Bonus category cards are great for earning more cash back on what you spend the most on. The Chase Freedom Unlimited® card, for example, gives you 4.5% cash back on drugstores and dining, 6.5% on travel, and 3% on everything else up to a limit⁷. The Discover it® Student Cash Back card also offers 5% cash back on certain purchases each quarter and 1% on everything else⁸.

But, these cards need more work to get the most rewards. You have to keep up with category changes and activate them. Flat-rate cards like the Wells Fargo Active Cash® Card⁷ and the Citi Double Cash® Card⁸ are easier. They give you 2% cash back on all purchases without the hassle of rotating categories.

Choosing between an unlimited cashback card and a bonus category card depends on your spending and how much time you want to spend on rewards. If you spend a lot in certain areas, a bonus category card is best. But, if you prefer simplicity, an unlimited cashback card is easier to use⁷⁸⁶.

“The key to maximizing your cash back is understanding your spending habits and selecting a card that aligns with your needs.”

Maximizing Cash Back Rewards

To get the most from your cash back credit cards, you need a smart plan. Match your card use with how you spend and use sign-up bonuses and deals to boost your cashback⁹.

Using a mix of flat-rate and bonus category cards is a good strategy. Cards like the Citi Double Cash® Card give 2% cash back on all buys¹⁰. Bonus category cards, like the Chase Freedom Flex® and the Discover it® Cash Back card, offer more cash back in certain areas, such as dining and groceries¹⁰.

Look at your monthly spending to find where you can earn the most cash back. For example, the Blue Cash Preferred® Card from American Express gives 6% cash back at U.S. supermarkets and on select streaming services⁹. The Citi Custom Cash® Card offers 5% cash back on your top spending category up to $500 each billing cycle⁹.

Some people use different cards for different types of purchases to increase their cashback. This way, you use the best benefits and rewards of each card to get more back¹¹.

Don’t forget to use sign-up bonuses and deals to increase your cashback. For instance, the Chase Freedom Flex offers a $200 cash back bonus after spending $500 in the first three months⁹. The Citi Custom Cash® Card gives a $200 cash back bonus after spending $1,500 in the first six months⁹.

By using these strategies, you can greatly increase your cashback and get the best from your credit card rewards¹¹.

“The key to maximizing cash back rewards is to align your card usage with your spending patterns and take advantage of sign-up bonuses and promotional offers.”

Conclusion

When picking the best cashback credit card, think about how you spend money, what rewards you like, and how much effort you want to put into getting more cash back rewards programs. Flat-rate cashback credit cards are easy to use, giving you a steady cash back on all buys¹². Bonus category cards could give you more rewards but might need more work to get the most out of your credit card rewards¹³.

Knowing the good and bad of each cashback credit card type helps you make a smart plan to maximize your cash back rewards¹⁴. Whether you like the easy use of a flat-rate card or the chance for more rewards with a bonus category card, there are many choices. This way, you can make sure you’re getting the best value from your credit card use¹²¹³¹⁴.

By looking at your spending habits and what rewards you want, you can choose the best cashback credit card for your financial goals. This ensures you’re getting the most from your cash back rewards programs¹²¹³¹⁴.

FAQ

What are the main types of cashback credit cards?

There are two main types of cashback credit cards. Flat-rate cards give you a fixed percentage on all purchases. Bonus category cards offer more rewards on certain spending areas.

What are the advantages of flat-rate cashback cards?

Flat-rate cashback cards are great because they give cash back on all your buys. There are no limits on how much you can earn. They make earning cashback easy and straightforward.

What are the benefits of bonus category cashback cards?

Bonus category cashback cards let you earn more cash back, 3% to 5%, on big spending areas. This includes groceries, gas, dining, or online shopping.

How can I maximize my cashback earnings?

To get the most cashback, mix flat-rate and bonus category cards. Match your card with your spending habits. Also, use sign-up bonuses and other deals.

What factors should I consider when choosing a cashback credit card?

Think about your spending, what rewards you like, and how much you want to manage rewards. Look at your monthly spending to find where you can earn the most cashback.