Cash back cards allow cardholders to earn a percentage of cash back on every dollar you spend, usually anywhere between 1% and 5%, although some cards may go even higher for specific purchases at qualifying merchants. These rewards are typically offered in one of three ways:
- Flat-rate cards: This is the simplest kind of cash back system. Cash back cards that offer the same percentage rate, no matter the purchase. The Wells Fargo Active Cash® Card, for example, offers 2% cash rewards on all eligible purchases.
- Tiered-rate cards: These cards tend to offer higher cash back rates, but only for certain categories. For example, the Blue Cash Everyday® Card from American Express gives cardholders 3% cash back at U.S. supermarkets, on up to $6,000 per year in purchases (then 1%), 3% on U.S. online retail purchases on up to $6,000 per year in purchases (then 1%), and 3% on gas at U.S. gas stations, on up to $6,000 per year in purchases (then 1%). All other eligible purchases earn 1% cash back. This card has no annual fee. (Terms apply, see rates and fees.)
- Rotating categories: These cards offer different bonus categories that rotate monthly or quarterly and may require the cardholder to manually activate these offers online or via mobile app. The Citi Custom CashSM Card offers 5% cash back on your top spend category per billing cycle up to $500, then 1% cash back thereafter.
