Cash back cards offer a straightforward deal. Pay with your card, and earn a percentage back on your purchase. It's a valuable benefit, easy to understand, and consumers love it. A recent credit card study by The Motley Fool Ascent found that over half (56%) of Americans have cash back cards.
If you want to keep it simple, you could use one cash back card for all your regular spending. There's nothing wrong with this method, but there's also a way you could earn much more: carrying multiple cash back credit cards. Because when you don't mind adding another card or two to the mix, you could potentially double your cash back.
More cards, more cash back
There are two big advantages to using multiple cash back cards. First, many cash back cards have welcome offers worth $200 or more for new cardholders. If you want to make as much money as possible with cash back cards, welcome offers are the fastest way to do it.
Here's an example of what I consider one of the best two-card combinations:
So you could open one of these cards, spend enough to earn the welcome offer, and then open the next one. If you earn both welcome offers over the rest of 2024, that's already $450 in bonus cash back.
You'll also be earning cash back on all the purchases you make with each card. That brings us to the other advantage of this strategy: You can earn higher cash back rates.
The Citi Double Cash® Card earns up to 2% back on purchases (1% when you make a purchase and 1% when you pay it off). That's great for an unlimited rate that you earn on all purchases. But this card doesn't have any bonus categories, like other cash back cards -- including the Blue Cash Preferred® Card from American Express. That card earns:
- 6% at U.S. supermarkets, on up to $6,000 in spending per calendar year
- 6% on select U.S. streaming subscriptions
- 3% at U.S. gas stations
- 3% on transit, which includes taxis/rideshare, parking, tolls, trains, buses, and more
- 1% on other purchases
- Terms apply
If you have both, you can use your American Express card for purchases in its bonus categories, where you'll earn 3% to 6% back. For everything else, you can use your Citi card and earn 2%, twice as much as you'd earn with the Blue Cash Preferred® Card from American Express.
The best strategy for earning cash back
Having multiple credit cards gives you a little more to manage, but it can earn you a lot more cash back. You'll have the opportunity to earn more welcome offers and a high cash back rate across more spending categories.
The Citi Double Cash® Card and the Blue Cash Preferred® Card from American Express are an excellent combination. But there are also plenty of other options with different welcome offers and cash back rates.
If you're open to using multiple cards, I'd recommend starting with a card that earns 2% on purchases in all spending categories. Then, add one or more cards that earn bonus cash back in the places where you spend the most. It's not hard to do, and it's how most cash back enthusiasts boost their rewards.
FAQs
If your wallet is missing all four, the Citi Custom Cash® Card is a good card to start, as it gives you more flexibility over how you earn your 5%. Then, you might want to add a card with a rotating quarterly category, like the Chase Freedom Flex®. Another option for this is the Discover it® Cash Back.
How do you get 5% cash back on everything? ›
If your wallet is missing all four, the Citi Custom Cash® Card is a good card to start, as it gives you more flexibility over how you earn your 5%. Then, you might want to add a card with a rotating quarterly category, like the Chase Freedom Flex®. Another option for this is the Discover it® Cash Back.
How do I maximize my cash back card? ›
Use your flat-rate cash back card to pay utility bills, rent, mortgage payments and other monthly expenses in order to maximize your rewards. Buy through your issuer portal and special cash back apps to earn additional cash back when shopping. Take advantage of issuer-specific offers at designated retailers.
What is the smartest way to use cash back? ›
Pay off debt
The smartest thing you can do with your cash back is to pay off your credit card debt. By applying cash back directly to your card balance, you're effectively lowering the principal and reducing the amount of interest that accrues.
How do I get big cash back? ›
The first step to cashback success lies in selecting a credit card that aligns with your spending habits. Many credit cards cater to specific categories such as groceries, dining, travel, or fuel. By identifying your most frequent expenses, you can choose a card that offers higher cashback rates in those categories.
Can you get $1,000 cash back at Walmart? ›
To cash out in-store, you will need a minimum of $25 Walmart Cash. The maximum amount you can redeem for cash in a single day is $500, in a single week is $1,000, and in a single month is $2,000.
What is 3% cash back on $1000? ›
How 3% Cash Back Works. The way 3% cash back works is simple: You make purchases on your card, and then rewards equaling 3% of those purchases appear in your account, which can sometimes take one to two billing periods. For example, if you spend $1,000 on purchases eligible for 3% cash back, you get $30 in rewards.
What is the best card to put money on? ›
Best prepaid debit cards
- Best for no monthly fee: Bluebird® American Express® Prepaid Debit Account.
- Best for cash back: Serve® American Express® Prepaid Debit Account Cash Back.
- Best for cash reloads: Serve® American Express® Prepaid Debit Account Free Reloads.
- Best for families: FamZoo Prepaid Card.
The U.S. stock market is considered to offer the highest investment returns over time. Higher returns, however, come with higher risk. Stock prices typically are more volatile than bond prices.
How to earn more cashback? ›
Here are some key strategies to help maximize your cash back rewards:
- Choose a card that matches your spending habits.
- Avoid common mistakes of using cash back rewards credit cards.
- Pay your balance in full each month.
Downsides of cash back programs
Sometimes, the issuer delays or caps your rewards at a certain amount, limiting your ability to get cash quickly. Higher costs for some. Cash back cards can carry higher annual percentage rates (APR), meaning you have to pay high fees if you carry a balance. Annual fees.
How to use cashback effectively? ›
How to redeem cash back
- Statement credit: Apply cash back as a credit to your account balance. ...
- Direct deposit or check: You can often transfer cash back to a linked bank account or request a paper check.
- Gift cards: Some cash-back cards may allow you to redeem cash back for various gift cards.
Chip Lupo, Credit Card Writer
The credit cards that give 5% cash back at Walmart are the Capital One Walmart Rewards® Mastercard® and the Walmart® Store Card.
What card offers 5% cash back? ›
Best 5% Cash Back Credit Cards
| Credit card | NerdWallet rating | Intro offer |
|---|
| Chase Freedom Flex® Apply Now on Chase's website on Chase's website | 5.0/5 Best for Rotating categories + cash bonus | $200 |
| Prime Visa Apply Now on Amazon.com's website on Amazon.com's website | 4.6/5 Best for Amazon Prime members | $100 |
6 more rowsChristie Matherne, Credit Card Writer
Getting 5% cash back on a credit card means you will earn $5 in cash back rewards for every $100 you spend on qualifying purchases. Having a card with 5% bonus categories that align with your spending habits is a good way to maximize your savings.
How do you get cash back on items? ›
How does cash back work online? You can earn cash back on purchases when you visit online retailers through Ibotta including HomeDepot.com, Ebay.com, Macys.com, Groupon.com, Walmart.com, Booking.com, Kohls.com and many more. Simply follow the link between Ibotta and the online retailer.
