What is cash back on a credit card?
Cash back is a type of credit card reward. When you use an eligible card, you earn back a percentage of what you spend. And depending on the issuer, you may be able to redeem that cash as a statement credit or other redemption options.
What you’ll learn:
- Issuers can structure cash back rewards in multiple ways based on the type of card and how it’s used.
- Capital One offers multiple cash back credit cards, including Savor and Quicksilver.
- Beyond cash back, issuers might also offer credit card rewards in the form of points or miles.
Ways to earn cash back on a credit card
When you use a cash back rewards credit card for an eligible purchase, you generally get back a percentage of the purchase amount. The exact percentage depends on the card’s rewards structure and the type of purchase.
There are three common rewards structures:
- Flat-rate rewards cards: You earn the same percentage on every eligible purchase, such as 1.5% cash back. This structure can be simple to track.
- Tiered rewards cards: You earn a higher rate in certain categories and a flat rate elsewhere. For example, a card might offer 3% cash back on dining and 1% on other purchases.
- Dynamic category cards: Bonus categories can change over time. You may be able to choose them, or the issuer may rotate them on a schedule or based on how you use the card. A card might offer 5% cash back on dining for one quarter and 1% on non-bonus purchases.
Cash back may appear as dollars and cents in your account. Some issuers let you transfer rewards to partner accounts that earn points or miles.
What does 1.5% cash back mean?
A 1.5% cash back rate means you earn $1.50 in rewards for every $100 in eligible purchases. For comparison’s sake, at 1%, you’d earn $1 on $100 in eligible purchases. At 2%, you’d earn $2.
Is cash back free money?
Cash back can feel like free money, but generally you earn it only when you spend. If rewards encourage you to spend more than planned (or if you carry a balance and pay interest), the costs could outweigh the cash back.
Depending on the issuer, there could be limits on how much cash back you can earn.
Capital One cash back credit cards
Capital One has multiple cash back credit cards for people with all ranges of credit and spending habits.
Dining and entertainment cards
Capital One has four dining and entertainment cards that offer tiered rewards for food and fun. Cards like Savor offer 3% cash back at grocery stores and on dining, entertainment and popular streaming services, plus 1% cash back on all other purchases. Annual fees and introductory offers vary by card. View important rates and disclosures.
Everyday cash back cards
Capital One also has flat-rate cash back cards that offer unlimited 1.5% cash back on every purchase, most with no annual fee. View important rates and disclosures. There’s also a rewards secured card option: the Quicksilver Secured card.
Cash back FAQ
Cash back cards are generally straightforward, but rewards and card terms can still differ.
Where can I get the most cash back?
Getting the most cash back can depend on your individual spending habits. For example, Savor cardholders can earn unlimited 8% cash back through Capital One Entertainment—plus up to 5% cash back through Capital One Travel.
What is the difference between cash back and points rewards?
Cash back is generally expressed as a dollar amount based on a percentage of what you spend on qualifying purchases. Points are another common type of credit card reward. Depending on the program, you may be able to redeem them through a retailer, airline or hotel loyalty program. Point values can vary.
What is the difference between cash back and miles rewards?
Miles are another common rewards currency. You might earn miles in an airline’s loyalty program when you use a travel credit card. Some rewards credit cards, like travel rewards cards from Capital One, offer miles that aren’t tied to a specific airline.
Key takeaways: What is cash back?
Cash back is a great way to get rewarded for purchases you were going to make anyway. It can be straightforward to track and manage, and you may be able to choose from several redemption options. If you’re interested in a cash back card, you can explore cash back credit cards from Capital One.
