What is cash back on a credit card?

Rewards credit cards generally offer one of three types of rewards: points, miles or cash back. When you have a cash back credit card, you get a percentage of each purchase back in the form of cash back rewards. 

Cash back credit cards can be one of the simplest types of rewards cards to manage because you’ll always know the value of your rewards.

What you’ll learn:

• How the three common rewards structures for cash back credit cards work. 

• The differences between Capital One’s popular cash back credit cards. 

• How cash back rewards compare to points and miles.

You can earn cash back whenever you use a cash back rewards credit card to make an eligible purchase. You usually won’t earn cash back on cash advances or balance transfers. 

Generally, you get a percentage of the purchase amount back, and the percentage depends on the card’s rewards structure and where you make your purchase. There are three common rewards structures:

• Flat-rate rewards cards: You earn the same percentage on all your purchases, such as 1.5% cash back. They can be a good option for people looking for a consistent rate that’s easy to track for all purchases.

• Tiered rewards cards: You get bonus rewards on purchases in certain categories and a flat rate elsewhere. For example, 3% cash back on dining and entertainment purchases and 1% cash back on other purchases.  

• Dynamic category cards: Some cards have tiered rewards that can change over time. You might get to choose and change your bonus categories. Or the card issuer might change the bonus categories based on a rotating schedule or how you use the card. For example, you might get 1% cash back on non-bonus purchases and 5% bonus cash back on dining purchases from January through March.

The actual cash back rewards you receive may appear as dollars and cents in your account. But some issuers might allow you to transfer rewards to a different account you have open that offers points or miles.

You may be able to choose from various redemption options depending on your card’s program. Some of the commonly available options include: 

• Cash: Get a statement credit or check, cover recent purchases and beyond.

• Gift cards: Exchange cash back rewards for gift cards from certain merchants.

• Merchandise: Buy products with rewards or use your cash back when shopping at eligible retailers.

• Experiences: Use your cash back to book travel, entertainment or other experiences. 

• Donations: Donate your money to an eligible charity.

Capital One has multiple cash back credit cards, including cards for people with all ranges of credit and spending habits.

Capital One dining and entertainment cards are tiered cash back cards for food and fun. That means 3% cash back at grocery stores and on dining, entertainment and popular streaming services, plus 1% cash back on all other purchases. There’s no annual fee. View important rates and disclosures. And being a cardholder allows access to more experiences through Capital One.

There are three cards to consider:

• Savor Rewards: Offers intro bonuses, such as a one-time cash bonus when you meet an initial spending requirement and intro 0% APR offers. View important rates and disclosures. It’s designed for people with excellent credit. 

• Savor Rewards for Good Credit: If you have good credit, you can get the ongoing benefits of a Savor Rewards card without the new cardholder offers. 

• Savor Rewards for Students: A Savor card that’s designed with students in mind. New cardholders can earn a one-time $50 cash bonus once they spend $100 on purchases within three months from account opening.

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 are four options available:  

• Quicksilver Rewards: Designed for people with excellent credit and has intro bonus cash back and 0% APR offers. View important rates and disclosures.

• Quicksilver Rewards for Good Credit: Only requires good credit but doesn’t have the same bonus offers. 

• Quicksilver for Students: For students who want a flat-rate cash back card. Like the Savor student card, there’s a one-time $50 cash bonus for spending $100 on purchases within three months of opening the account.

• QuicksilverOne Rewards: Only requires fair credit and has a $39 annual fee. View important rates and disclosures.

• Quicksilver Secured: Only requires fair credit and a refundable security deposit.

Cash back credit cards can be relatively easy to manage, but you still might have a few general questions about rewards cards.

Cash back is an easy way to get rewarded for purchases you were going to make anyway. It can also be easier to track and manage cash back rewards than points, and you can still choose from several redemption options. 

If you’re interested in a cash back card, be sure to compare the cards’ rewards structures, fees and intro offers. Capital One’s cash back credit cards never have foreign transaction fees, and most don’t have annual fees either. View important rates and disclosures.