"If you cast your bread upon the water and you have faith, you'll get back cash. If you don't have faith, you'll get soggy bread."
-- Don King
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Many people who are casting bread upon water are going to get soggy bread instead of getting back cash. A more reliable way to get cash back is to cast your credit card upon the cashier's counter when making a purchase. Certain credit cards will do that -- ones that offer a percentage of cash back on your spending.
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What to know about cash-back credit cards
Understand that cash-back credit cards vary in what they offer. Some offer a flat percentage back on all purchases. Others have tiers of percentages applying to different expense categories. Still others offer big rewards on a purchases in specified spending categories that rotate every few months. Some cards offer a combination of these features.
Best cash-back credit cards
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Here's a look at a bunch of the best cash-back credit cards. Some will serve you better than others, depending on your needs, your preferences, and your spending habits. Each has its own suite of other benefits, too, beyond the cash back.
- AARP Credit Card: This card is especially handy if you spend a lot at restaurants and gas stations, as it offersa hefty 3% back on spending there -- and 1% back on all other purchases. It offers a $100 bonus (in the form of 10,000 rewards points) after you spend $500 on the card in your first three months. There's no annual fee, and each time you make a purchase, the card will send $0.10 to the AARP Foundation to support the Drive to End Hunger -- a program feeding hungry older people.
- BankAmericard Cash Rewards: This card offers3% cash back on your gas purchases, along with 2% back on spending at supermarkets and wholesale clubs and 1% back on everything else. It charges no annual fee. The card is not great, though, if you spend a lot at gas stations and supermarkets and wholesale clubs, because it caps those 3% and 2% rewards at $2,500 in spending per quarter (which is about $830 per month). Exceed the limit and you'll only earn 1% back. Folks with BankAmerica checking or savings accounts can get an extra 10% if they have their cash back deposited with BankAmerica. Those who are Bank of America Preferred Rewards customers can earn bigger bonuses of between 25% and 75%. The card also offers a $100 reward once you charge $500 in your first 90 days. (Read ourfull reviewof BankAmericard Cash Rewards.)
- Blue Cash Preferred Card from American Express: This card's main attractions is 6%cash back at supermarkets (on up to $6,000 in annual spending, after which that drops to 1%), 3% cash back at gas stations, and 1% cash back on everything else. If you spend $6,000 or more at the supermarket (that's about $115 per week), you're looking at $360 or more in cash back just for that. There's a $95 annual fee. If the annual fee doesn't seem worth it, consider the Blue Cash Everyday Card from American Express instead, which chargesno annual fee and offers less in cash back: 3% at supermarkets, 2% at gas stations, and 1% back on everything else. Both cards have a special offer in effect as of this writing: If you apply by May 3, 2017, you can earn 10% back on what you spend at U.S. restaurants in the first six months -- up to earnings of $200. On top of that, you can earn $150 if you spend $1,000 in your first three months. (Read our full reviews of the Blue Cash Preferred from American Express and the Blue Cash Everyday Card from American Express.)
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- Chase Freedom Unlimited: Thiscard offersa solid 1.5% cash back on all purchases, with no limit. Charge $1,500 per month? You're looking at $270 back each year. The APR is 0% for the first 15 months, even for balance transfers -- though those are also subject to a fee of $5 or 5% of the amount transferred, whichever is greater. You can collect a $150 bonus once you spend $500 in your first three months. There's no annual fee, either. (Read our full review ofChase Freedom Unlimited.)
- Chase Sapphire Preferred: This card is best suited for travelers. It awardsyou 50,000 points once you spend $4,000 on the card in your first three months. Those points are worth $625 in travel expenses when you redeem them through Chase Ultimate Rewards. It's also good for those who like to eat out, as you'll earn double points for spending on travel and meals at restaurants. There's a $95 annual fee -- but it's waived in the first year. (Read our full review ofChase Sapphire Preferred.)
- Citi Double Cash Card: The Citi Double Cash Card offersa generous unlimited 2% cash back on everything you charge. It pays you 1% cash back when you make a purchase -- and then another 1% back when you pay off that sum. If you tend to charge around $1,000 worth of stuff per month, you're looking at $240 in cash back per year. Better still, there's no annual fee. Balance transfers don't earn cash back, but they do enjoy a 0% APR (annual percentage rate) for the first 18 months. On the other hand, they will also cost you either $5 or 3% of the value of the transfer, whichever is greater. That would amount to a $150 fee on a $5,000 transfer, which is why this is a great cash back card but not the best balance transfer card. (Read our full review of the Citi Double Cash Card.)
- Costco Anywhere: The Costco Anywhere card is only available to Costco members, and memberships start at $55for a household. For members, though, this card's gas benefits are hard to beat. You can enjoy a substantial 4%back on gas spending (up to $7,000 in spending per year) -- and you'll save even more if you buy your fuel from Costco itself, as it sports very competitive gas prices. The card also offers 3% back on travel and restaurant spending, 2% back on purchases at Costco (and Costco.com), and 1% back on everything else. If you travel a fair amount and eat out a lot, you can really clean up with this card. There's no annual fee as long as you have your Costco membership, and your earnings are redeemable for cash or merchandise at Costco stores.
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- Discover it -- Cashback Match:This cardoffers a hefty 5% back on up to $1,500 spent over three months in categories that you activate (such as restaurants, gas stations, home improvement stores, or Amazon.com). That alone is worth up to $75 per quarter, but on top of that it also offers 1% back on all other spending. The Discover it-Cashback Match has one more big benefit -- it will match all the cash-back money you earn in your first year, paying you that same sum again. The card charges no annual fee and it includes your FICO score on each statement, which can help you monitor your credit health. You might also consider the Discover it Milescard, which offers 1.5 miles for each dollar spent on purchases. You can redeem your points for a credit on your statement that can cover travel-related expenses such asflights, hotels, car rentals, travel agents, commuting expenses, and so on. As with the Discover it-Cashback Matchcard, this card will match all your miles earned in your first year. (Read our full review of Discover it Miles.)
- Fidelity Rewards Visa Signature Card: This card offersa simple 2% cash-back reward -- with a catch. The 2% will be deposited in a Fidelity account. That can be perfect if you've got a Fidelity savings account, retirement account, brokerage account, or other account. There's no annual fee, either. This card can help you sock money away for retirement. If you charge, say, $1,500 per month, you're looking at $360 deposited into your account each year.
- PenFed Platinum Rewards: PenFed (short for Pentagon Federal) is a credit union, requiring you to be a member (and keep an active account) before you can take advantage of its offerings. Fortunately, it's not hard to become a member. What does membership getyou when it comes to gas? A whopping 5 points per dollar spent at gas stations, that's what. (Plus 3 points for supermarket spending and 1 point for everything else.) That translates to about 4.25% in cash back for gas. Until June 30, 2017, new cardholders who charge at least $1,500 in purchases in their first three months will get a $100 statement credit. There's no annual fee if you meet certain requirements.
If you're not using a powerful cash-back credit card that matches well with your spending patterns, you're leaving money on the table. Note that many of the best credit cards require a good or great credit score -- so you might want to beef up your score before applying.
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Selena Maranjian owns shares of American Express, Costco Wholesale, and JPMorgan Chase. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool recommends American Express. The Motley Fool has a disclosure policy.