Earning 2% cash back on credit card purchases is a more appealing option than the standard 1% cash back. These cards offer a flat cash-back rate, eliminating the hassle of tracking spending categories or making reward calculations. The introduction of 2% cash-back cards has significantly raised the bar for credit card rewards, outshining the once exciting 1% or 1.5% back offerings.
Our team conducted an extensive analysis of various 2% cash-back cards, considering a wide range of issuers, to compile a list of the very best options available. It’s essential to compare these cards to other credit cards and cash-back credit cards, as the context may impact their suitability for individual needs.
Wells Fargo Active Cash® Card
The Wells Fargo Active Cash® Card stands out as a top choice for 2% rewards cards. Along with a generous welcome bonus and easily redeemable rewards, the card offers cellphone protection and attractive introductory APR periods for both purchases and balance transfers. With no annual fee and unlimited 2% cash rewards on purchases, it’s a great option for those seeking straightforward and valuable benefits.
Alliant Cashback Visa® Signature Credit Card
For individuals spending $10,000 or less per month on a credit card, the Alliant Cashback Visa® Signature Credit Card offers unparalleled flat-rate value. The card provides a remarkable 2.5% cash back on up to $10,000 spent per billing cycle with qualifying accounts, and 1.5% cash back on all other purchases. While there’s no welcome bonus, the absence of foreign transaction fees makes it an attractive choice for international travelers.
SoFi Credit Card
The SoFi Credit Card integrates seamlessly for existing SoFi users who have already utilized their services for student loan refinancing or managing crypto investments. However, it may not be the best fit for those unfamiliar with SoFi. The card offers 3% cash back on trips booked through SoFi Travel and 2% on other purchases. While there is no annual fee, the card’s real value lies in redeeming points towards SoFi accounts or outstanding balances on SoFi loans.
TD Double Up℠ Credit Card
The TD Double Up℠ Credit Card provides a simple and straightforward rewards system, earning 2% cash back on all eligible purchases. For customers loyal to TD Bank, this card is a solid option, especially considering the additional benefits like cellphone protection, purchase security, extended warranty protection, and travel assistance services. However, those without a strong affiliation with TD Bank may find better options elsewhere.
PayPal Cashback Mastercard®
The PayPal Cashback Mastercard® caters to frequent PayPal users, offering 3% cash back on transactions made through PayPal and 2% on other purchases. While the bonus category might not be advantageous for everyone, regular PayPal users can benefit from easy access to credit card rewards through their PayPal account. The card does not have an annual fee but charges foreign transaction fees, making it less appealing for international use.
PenFed Power Cash Rewards Visa Signature® Card
The PenFed Power Cash Rewards Visa Signature® Card is a 2% cash-back card that requires membership in PenFed Honors Advantage to unlock its full cash back potential. For qualifying members, the card provides an attractive 2% cash back on all purchases. However, those who don’t meet the membership criteria will earn a lower cash back rate. With no foreign transaction fees, it can be a suitable option for international travelers planning a trip abroad.
Citi® Double Cash Card
The Citi® Double Cash Card presents an excellent choice for those aiming to manage debt from another card while earning rewards. With a 0% intro APR on balance transfers for 18 months, it allows users to pay off their balance while accruing 2% cash back on all purchases. The card comes with access to the Citi Entertainment program, offering premier access to upcoming events. However, it does charge foreign transaction fees.
Fidelity® Rewards Visa Signature® Credit Card
The Fidelity® Rewards Visa Signature® Credit Card provides an interesting feature for investors, allowing cardholders to redeem their rewards directly into eligible Fidelity accounts. The card offers 2% cash back on eligible purchases and includes benefits like purchase security and roadside dispatch. However, it’s important to note the 1% foreign transaction fee, making it less favorable for international use, although it still offers a better option than cards with higher foreign transaction fees.
What does 2% cash back mean?
Cash-back cards are popular among credit cardholders due to their rewards system. One common type is the 2% cash-back card, which allows users to earn 2% of every eligible purchase as cash back. Unlike some cards that offer higher rewards in specific categories, a true 2% cash-back card provides a flat rate on all purchases.
Redeeming cash back rewards is flexible and can vary depending on the credit card’s rewards agreement. Common redemption options include statement credits to reduce card balances (though not covering the minimum monthly payment), deposits to checking or investment accounts, or exchanging for gift cards from various merchants.
It’s essential to review the specific terms and conditions of your cash-back card to fully understand the available redemption options and make the most of your earned rewards. By utilizing the right redemption method, cardholders can maximize the value of their cash back and enjoy the benefits of using a cash-back card for their everyday expenses.
Pros and cons of a 2% cash back card
Advantages of a 2% cash-back card are the consistent and excellent rewards rate it offers without the need to track varying card rates in different categories. Moreover, some 2% cash-back cards come with enticing welcome bonuses and additional benefits, all while charging no annual fee.
It’s important to note that while 2% cash-back cards provide great rewards, they may not offer additional perks beyond standard convenience benefits. For those seeking more credit card benefits like airport lounge access, travel credits, or enhanced protections, premium travel rewards cards may be a better option.
Flat-rate rewards cards, on the other hand, are appealing due to their simplicity, making it easy to understand the rewards structure. However, they may not be as advantageous for individuals who spend heavily on specific categories. For instance, those who frequently spend on groceries could potentially earn up to 5% or even 6% cash back with the right card, surpassing the 2% cash back offered by a flat-rate card.
How to compare 2% cash-back credit cards
Comparing 2% cash-back cards involves examining the rewards programs closely. Certain cards may have points that expire, while others don’t. Additionally, some cards offer multiple redemption methods, whereas others may automatically redeem points as a statement credit. The value of rewards may vary depending on the redemption option, with gift cards or merchandise potentially offering lower value compared to depositing into an eligible account.
The benefits offered by 2% cash-back cards can significantly impact their appeal. While some cards provide only convenience benefits, others may include additional perks like travel insurance or cellphone protection. It’s essential to assess the value of these benefits in relation to any associated fees or costs.
Introductory APRs can be advantageous for financing large purchases or transferring balances to a 2% cash-back card. However, it’s crucial to carefully read and understand the terms and conditions surrounding these offers. Making timely payments is essential to avoid accruing interest, and balances must be paid off by the end of the introductory period to maintain the benefits.
When utilizing a balance transfer offer, it’s wise to refrain from using the card for additional purchases until the transferred debt is fully paid off. Otherwise, the debt can quickly accumulate, defeating the purpose of the transfer.
Before applying for a 2% cash-back card, thoroughly consider the fees, APR, and other terms associated with each card under evaluation. Certain terms, such as penalty APRs or foreign transaction fees, may not be favorable for the cardholder. Understanding all the terms beforehand is crucial to making an informed decision and avoiding any surprises after application.
Why you might choose a 2% cash-back card
A 2% cash-back card can be a convenient choice for those seeking a simple rewards structure applicable to all purchase categories. The appeal lies in the ease of earning without having to track different spending categories.
Alternatively, some individuals may opt for a 2% cash-back card in combination with other rewards cards that offer bonuses in specific categories. This strategy involves using the specialized cards for certain expenses, such as gas or groceries, while utilizing the 2% cash-back card for all other purchases, ensuring a strong base earning rate.
No matter the approach, having a reliable 2% cash-back card can be a valuable addition to anyone’s wallet, providing benefits and flexibility in their overall rewards strategy.
