Rewards credit cards let you earn cash back, points or miles that can enhance the value of paying with a credit card over cash or debit cards. However, rewards programs have rules, such as when you're allowed to redeem rewards, that can make it confusing to navigate your card's program.
NerdWallet's Best Cash Back Credit Cards of May 2021
Cash back credit cards pay back a certain percentage of what you spend (similar to a rebate). ... If a card has a 1% cash back rate, for example, you'll earn $0.01 for every dollar you spend and earn $10 for every $1,000 you spend. They're a popular type of rewards credit card.
Points credit cards reward you for every dollar you spend. You may even get extra points for making certain types of purchases. For example, a credit card might offer 3 points per dollar on all travel purchases (hotels, airfare, etc.), while giving 1 point per dollar on other types of purchases.
Currency conversion.
Credit card companies pay for rewards with revenue from two main sources: you—the consumer—and the merchants who accept their cards. You're likely aware of your contribution. You pay interest whenever you carry a balance on your card and fees whenever your payment is late or you get a cash advance.
Cash back is flexible and easy to redeem. Points or miles dangle the possibility of a paid-for vacation and, sometimes, a higher reward value per dollar spent. Nowadays, some cards let you redeem rewards for cash or travel at the same value. ... “If you don't want to work at it, cash back is the easy decision.
Best cash-back cards with no annual fee
| Category | Credit Card | Estimated rewards earned after five years |
|---|---|---|
| Winner | Chase Freedom Unlimited® Card | $2709 |
| Runner-Up | Citi® Double Cash Card | $2213 |
| Best for Rotating Bonus Categories | Chase Freedom Flex℠ | $2647 |
| Best for Online Shopping | PayPal Cashback Mastercard® | $2213 |
Chase Freedom Unlimited®: Best feature: Flexible cash back rewards. Discover it® chrome: Best feature: Gas cash back. Citi Rewards+® Card: Best feature: Two points per dollar spent at gas stations. American Express Cash Magnet® Card: Best feature: Flat-rate cash back rewards.
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