Best Cash-Back Credit Cards Of April 2024 – Forbes Advisor – Technologist

Depending on your preferred redemptions, other types of credit card rewards might be more valuable to you.

Cash Back vs. Travel Rewards

Travel rewards, such as airline miles or hotel points, can be strategically redeemed to get outsized value. Every travel program has sweet spots where a single point or mile could be worth five or ten cents each when redeemed tactically. However, this assumes you’re well-versed in the program’s strengths—and have the flexibility to take advantage of them.

Cash back, on the other hand, offers stable value. You don’t have to hunt for the most valuable redemptions and don’t have to worry about getting below-average value. It’s also much simpler and doesn’t require a time investment in order to redeem rewards.

Read more: Best Travel Credit Cards of 2024

Cash Back vs. Flexible Bank Points

Many card issuers offer proprietary points instead of traditional cash back. These programs, like Chase Ultimate Rewards or Citi ThankYou points, build in flexibility. When you earn credit card points, you can redeem them as cash back (often, but not always, equivalent to 1%), or you can redeem them for other rewards through the program. A common redemption option is to book travel through the points portal to get 25% more value with every point. You may also be able to transfer points to partnering travel loyalty programs, effectively earning travel rewards.

Once again, cash back is the easiest and most straightforward option. However, credit card points usually have one or more different options for redemptions that are still relatively simple yet provide a greater return. The flexibility of points is their greatest attribute.

The Majority of Americans Save Rewards

According to a Forbes Advisor survey in March 2024, the majority of Americans (61%) currently hold rewards balances. Only 17% of respondents immediately redeem their rewards after earning them. Only 9% of survey participants selected that they do not earn rewards on any credit cards in their name.

In March, the average balance was $183.40 (in USD equivalency when miles or points were earned instead of cash-back rewards), though some cardholders held much more:

• 17% have a $0 balance
• 21% have $1-50
• 14% have $51-100
• 9% have $101-250
• 7% have $251-500
• 3% have $501-750
• 2% have $751-1000
• 5% have $1000 or more in rewards

When you use a cash-back card, there’s no incentive to hold onto your rewards or “save up” for a specific redemption. Cash will always be worth exactly what the balance displays, and you’re best off redeeming regularly. Statement credits can take some pressure off your card balance while direct deposits into your banking account can be used for any other financial needs or goals you have in mind.

Bottom Line

Cash-back cards generally fall into one of three categories:

• Flat-rate rewards, such as 2% cash back on every purchase.
• Rotating-category rewards, such as 5% cash back on a selection of purchase categories that update every quarter, then 1% cash back on remaining purchases.
• Fixed-category rewards, such as 6% cash back on groceries, 3% cash back on gas or 2% cash back on restaurant purchases, then 1% cash back on remaining purchases.

The best type of cash-back card will vary depending on your purchase habits. If you have a large amount of purchases in a specific category, such as groceries or gas, it makes sense to find a card that offers bonus cash for your frequent purchases. But if you want a “set it and forget it” card, a flat-rate cash-back card will likely make more sense for you. If you want to maximize your cash-back earnings, consider pairing a flat-rate card with one that offers a rewards-earning bump for where you shop most often.

To view rates and fees for Blue Cash Preferred® Card from American Express please visit this page.
To view rates and fees for Blue Cash Everyday® Card from American Express please visit this page.
¹Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
²Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.