Home > Credit Cards > The Golden Rules of a Cash-Back Credit Card

Comments 0 Comments
Advertiser Disclosure


[Update: Some offers mentioned below have expired. You can view the current offers from our partners here — Chase Freedom.]

There is such a thing as free money. It’s a cash-back credit card.

But to really reap the rewards of such a credit card, you have to do things a certain way. Some of these concepts are straightforward, while others are a little trickier to follow, but in general, if you want to make the most of a cash-back credit card, these are the rules you need to know.

1. Make Sure You Have Good Credit

To get a credit card with any kind of rewards, you generally need to have a good credit score. It’s smart to check your credit score (which you can do for free on Credit.com) before you apply for a credit card so you can see if your credit meets the card’s qualification standards. It doesn’t guarantee you’ll get it, but applying for credit cards designed for people with credit like yours increases the likelihood of approval.

2. Know Which Purchases Earn the Highest Rewards

Many cash-back credit cards award different amounts of cash back for different spending categories. For example, Chase Freedom has rotating purchase categories for which you can get 5% cash back each quarter, so you’ll want to strategize using that card on transactions in the highest-earning category. (You can read a review of the Chase Freedom credit card here.)

3. Out-Earn Your Annual Fee

It’s also common for cash-back credit cards to carry an annual fee, though issuers often waive the fee for a customer’s first year with the card. If you’re not earning more cash back than you’re paying in an annual fee, then the card becomes counterproductive. You’re basically paying to use the card, while there are plenty of other credit cards out there you could use without having to pay an annual fee.

4. Avoid Carrying a Balance

Because rewards and cash-back credit cards tend to have high interest rates, carrying a balance on one will almost certainly outweigh any rewards you earn by using it. This can be more difficult to avoid than you think, because cash-back credit cards incentivize spending and can easily lead you to overspend. You need to be careful to not get so caught up earning cash back that you end up in debt.

5. Pay Attention to Earnings Limits

There are several cards that allow you to earn unlimited cash back and have no time limit for redeeming it, but that’s not always the case. You don’t want to miss out on a free reward because you glossed over the details of your credit card agreement.

At publishing time, the Chase Freedom is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.

Image: andresr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team