Best Cash Back Credit Cards in July 2025

We calculate the cash back earned for the average cardholder using Bureau of Labor Statistics data and an annual spend of $20,000, minus the annual fee. This value includes sign-up and annual bonuses. We look at the average rewards earned over two years to balance out a card’s ongoing value with its first-year value.

We consider how easy the rewards are to use, looking at factors like expiration dates and minimum thresholds to redeem.

We also compare a card’s benefits, such as purchase and travel protections, against benefits from other cards.

Flat-rate cash back credit cards earn cash back at the same rate on every purchase. The rewards rate is typically between 1% and 2%.

For example, the Wells Fargo Active Cash^® Card and Citi Double Cash^® Card offer a set amount of cash back on purchases

With tiered category cards, you can earn bonus cash back on specific categories of spend and 1% cash back on everything else. It’s common to find cards that offer a 3% or higher cash back rate on groceries, gas, dining and more.

Examples of tiered category cards include the Capital One Savor Cash Rewards Credit Card, Blue Cash Preferred^® Card from American Express and Chase Freedom Unlimited^®.

Rotating cash back credit cards earn elevated cash back rates in categories that change monthly or quarterly. There’s typically a cap on how much you can earn for these categories, and you earn 1% cash back rate after meeting the cap. You should also know that you may need to opt in to the rotating categories each quarter in order to earn the higher rate.

Store credit cards help you earn cash back at a specific store and might limit you to purchases with that retailer. These cards usually have higher APRs, so it’s important to pay off your card balance in full each month.

Examples of store credit cards include Prime Visa, Costco Anywhere Visa^® Card by Citi and Target Circle™ Card. There are also co-branded cards, including the and PayPal Cashback Mastercard®, which offer rewards for making purchases on their partner platforms.

Typically, cash back earned on a credit card won’t be taxable, since the IRS considers it a discount on what you’ve spent. However, if you receive a bonus without having to do any spending to earn it, that’s considered taxable income.

The Capital One Savor Cash Rewards Credit Card offers one of the highest cash back rates available. You’ll earn 3% Cash Back at grocery stores (excluding superstores like Walmart® and Target®), on dining, entertainment and popular streaming services, 5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply), 8% Cash Back on Capital One Entertainment purchases, 1% Cash Back on all other purchases.

But the best cash back credit card is the one that gives you rewards on the items you buy most, which varies for everyone.

Cash back credit cards are worth it because they allow you to earn rewards on purchases you’re already making. Like any credit card, they’re most beneficial when used responsibly, but they can be a great way to help offset expenses.

Credit cards provide cash back rewards to incentivize card usage and customer loyalty. Cardholders receive a percentage of their purchases back as a cash reward, reducing their overall expenses. In the meantime, credit card companies aim to increase spending and profits through interest charges. This creates a win-win relationship for consumers and card issuers.

Yes, cash back rewards can expire. Rules vary between card issuers — with banks like Chase and Capital One allowing you to keep rewards stashed away as long as your account remains open and in good standing. Cash back rewards from U.S. Bank, on the other hand, expire after 36 months — even if your account is open.

Duong "Katie" Pham, Ph.D. Associate Professor of Finance, Georgia Southern University

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
Yes, cash back is a great additional benefit for credit card users. The purpose of using credit cards responsibly is to build a history of excellent credit so you can tap into the larger loan markets. The cash back feature is an added benefit that helps users save money while using credit cards.

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
These words motivate the consumers in making decisions. The consumers themselves when wanting to purchase something have an internal desire to do so. However, they are oftentimes bounded by budget and opportunity costs. These words help create external motivation that makes it easier for the consumers to make decisions by adding one more item on the benefit side of their decision-making chart.

What are a few sensible ways in which consumers can utilize their cash back rewards?
The best way to utilize cash back rewards is to use the cash back balance and apply towards payments of the credit card balance. Credit card users can also ask for a paper check or ask for the cash reward to be deposited directly to their bank account. Another great way to utilize cash back rewards is to convert them into gift cards to use at other stores.

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
Cash back rewards program works well at keeping customers loyal. Customers love to accumulate points or rewards so seeing their rewards adding up will discourage them from finding an alternative option. Many times the fear of losing what they have accumulated overtime is what keeps customers from parting with a business, a brand or a product. For a business, the cost of giving away rewards to keep their current customers is much cheaper than the cost of acquiring new customers.

Charles Lindsey, Ph.D. Associate Professor of Marketing, University at Buffalo

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
It really depends on the individual circumstances of the person. There are so many “so-called” loyalty cards out there: cash back, flexible cash back, rewards, airline, etc. My recommendation as to the specific type of loyalty credit-card would depend on the person’s spending patterns. One needs to also take into account the annual-fee, from a cost-benefit standpoint. That said, cash is fungible (vs. other more specific loyalty cards like airlines).

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
Those are charged words when it comes to the “psychology of consumption.” Similar to the word “sale” or “free,” these terms often function like a neon flashing sign in the minds of consumers. Hence, consumers can engage in a kind of faulty mental calculus where they overweight the value of these benefits relative to the costs. For example, when someone drives across town to get the lowest price per gallon on gas but winds up actually paying more per gallon than had they gone to the corner gas station nearest their home (when you factor in fuel and time to drive across town). So, the danger is when these terms cause consumers to “chase” the rewards or reward tiers by spending more than they typically would.

What are a few sensible ways in which consumers can utilize their cash back rewards?
Don’t spend any more than you would otherwise spend in a given month just because you are getting cash back on purchases in general (or on certain categories of purchases). Use the cash back to pay off your credit card (or to pay down your credit card balance). Given credit-card interest rates, that’s a pretty great “reward” or “deal” in and of itself!

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
They definitely move the loyalty needle. Otherwise, we wouldn’t have seen the proliferation of such cards over the past decade plus. However, with so many of these cards nowadays, it’s becoming less of a “point of differentiation” for financial institutions and more of a “point of parity.” It’s almost expected now by consumers that the differentiators in this space offer percentage of cash back, flexibility, etc.

Mark Alpert Professor of Marketing, The University of Texas at Austin

Would you recommend a cash back credit card to a first-time credit card user? Why or why not?
Yes, I would recommend a cash back credit card, provided it pays at least 2% on all purchases. Some cards pay only 1.5%, which is perhaps not as valuable as frequent flier miles or hotel points, depending on one’s activity and status with these travel partners. These days, frequent flier miles are worth only about 1% of what you’ve spent; so 2% is definitely more valuable.

How do words like “bonus” or “rewards” impact consumers’ buying decisions?
These tend to be “buzz words,” and their impact likely depends on the perceived value of the “bonus” or “reward.” The “devil is in the details,” implying that in order to be effective, the “bonus” and/or “rewards” should be meaningful and valuable to the consumers, and, ideally, designed with knowledge of the specific consumers’ habits and preferences.

What are a few sensible ways in which consumers can utilize their cash back rewards?
Most important, pay the entire balance due on your credit cards each period (I recommend “auto pay” in which the credit card company draws funds on your bank account to pay the entire balance on the date that payment is due). Now that you are getting cash back and not paying in credit card interest, you can spend or invest the cash rewards on products or services, or as accumulated, investments that will provide good returns

In your opinion, how well do cash back rewards programs work at keeping customers loyal to a brand?
As long as the cash back is worth more than other incentives offered by competitors’ programs (or credit cards), consumers will continue to favor using the credit cards that give them valuable cash back, and/or they will tend to favor buying from companies that reward their loyalty with incentives that provide meaningful experiences (e.g., airline lounges, upgraded flights or concert experiences) or combo deals (BOGO, “buy one get one” (free), and the like).