Credit card rewards are derived from spending on credit cards and can take several forms, such as points with a bank or miles with a specific airline. A popular credit card reward is “cash back,” giving you a portion of your money back from purchases.
Cash-back reward structures vary from card to card, with some offering a fixed cash-back rate and others incentivizing spending in bonus categories, including at specific times of the year.
It’s important to understand how cash-back credit cards work and the best ways to earn and redeem rewards to get the most bang for your buck when using the right card.
Let’s explore if you can get cash back from a credit card and how to do so.
Can you get cash back from a credit card?
Yes, you can. A cash-back card allows cardholders to accrue rewards with every purchase made using the card. Cardholders who accrue rewards can redeem the cash back as a check, 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, while 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 hard to navigate how to get cash back and earn 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. This card offers unlimited 1.5% cash back on all purchases.
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The simple cash-back earning 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, the Freedom Flex offers 5% cash back on purchases made with PayPal, wholesale clubs and charities. In addition to rotating rewards, the Freedom Flex also earns 5% cash back on travel purchased through Chase; 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, which earns 5% cash back on purchases at different places each quarter, on up to a quarterly maximum of $1,500 when activated, 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 will not earn cash back in those categories over the maximum cap of $1,500 in purchases.
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 the Chase Ultimate Rewards travel portal, and 1.5% on all other purchases. Cash back earned on this card can be redeemed as a statement credit, check or bank deposit, or as travel booked through Chase Ultimate Rewards.
Although this card offers a variety of bonus categories to earn rewards with, its lowest category earning, 1.5%, aims to help customers be rewarded over the usual 1% earning 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, and then 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
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, which can be leveraged for travel by transferring those points to a loyalty partner.
Bottom line
Getting cash back from credit cards is possible, and earning is based on different reward structures that yield greater cash back on bonus category spending. 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.
Cash-back rewards can be redeemed for statement credits or deposited into a bank account — but if you hold travel rewards cards, they can be leveraged to help fund travel, giving you greater value.
