Beyond the Hype: The Truly Important Factors in Selecting a Cash Back Card

Cash back credit cards can get a lot of attention, and often, the big hype surrounding the cards is the new cardmember bonus you’ll be eligible for when you first sign up. These bonuses can be worth a good chunk of change. For example, you might be able to get $200 back after you spend $500, or $500 back after spending $1,500. 

Getting free money for spending on things you were going to buy anyway is a pretty sweet deal, and it’s easy to see why people get so excited about it. And, indeed, if you are planning on doing a good amount of spending, signing up for a new cash back card to earn a big bonus can be a good option for you.

However, while these introductory bonuses are nice, they are also temporary in terms of the benefits they provide you. You get your money, and then it’s done.  That’s why you want to look beyond the hype and focus not just on the up-front bonus but on the truly important features of selecting a card. Here’s what those are, so you can get the perfect cash back card that’s right for you. 

1. Bonus rewards that are well-matched to your spending

When you sign up for a cash-back card, ideally, it will earn you money for years to come. You can make sure you are maxing out the money that it earns you by finding a card that offers generous cash back for the kind of spending you do the most. 

There are two ways to do that. One option is to find a card that gives you bonus cash back on the things you buy most frequently. For example, if you spend a fortune on groceries and at the gas pump, then a card offering you 5% back on gas and groceries may be ideal for you. On the other hand, if your spending is all over the place or if you just want a simple card and don’t want to have to worry about keeping track of bonuses, then you could look for a card offering 2% or more cash back across the board. 

Some people opt to get a couple of cards with different bonus categories, and then one great general-purpose card. If you want to manage all that, you can truly max out your rewards and earn a ton — but you don’t have to do that to earn a good amount of money with the right cash back card. 

2. An easy redemption process that works well for you

Next, you’ll want to make sure your card has redemption options that work for you.

Usually, this means that you want to be able to get the cash back in the form of a statement credit, or you want to be able to have it deposited into a bank or investment account. You’ll also want to be sure you don’t need to meet a high minimum redemption requirement, such as a card that requires you to have a lot of cash back available before you can redeem it.

The simpler it is to get your cash back in your wallet, the better the card is and the more likely it is that you’ll be able to actually use the rewards.

3. Other cardholder perks you’ll take advantage of

Many cash-back cards offer other perks beyond just getting money back. You could get a card with travel insurance, for example, or with an extended warranty on items you charge.

You want to make sure you find a card with perks that add value to your life. It doesn’t make sense, for example, to get a card with a bunch of travel benefits if you are a homebody. 

4. No annual fee, or a fee that’s worth paying

Finally, don’t sign up for a cash back card with a big annual fee unless that fee is truly justified by amazing and valuable cardholder perks or by a rewards program you can’t beat. There are too many great cards out there that don’t charge you a fee to commit to one that does charge you, but doesn’t give back enough to make the cost worthwhile.

By considering these four issues, you can find the card that’s right for you. Of course, you don’t want to carry a balance on the card, or you’ll negate the benefits, so be sure you are confident in your ability to pay the card in full each month. If you do that, you don’t need to worry about the card’s APR since you are not going to be paying interest anyway. 

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