What could be easier than getting a small amount of money back on your credit card’s everyday expenses? That is how cashback cards operate and what makes them appealing to other customers.

Money-back cards come in several categories — bonus types, tiered bonuses, and flat cashback cards — but they all payback some amount to cardholders. Whereas a flat percentage cashback card is perfect for the crowd, bonus categories and tiered rewards cards provide more incentives that require more effort to optimize cashback in different categories of spending.

Understanding how cashback cards work will help you maximize your spending and make your reward cards more valuable. Here’s a closer look at the different types of cashback that you can get.

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Main Types of Cashback You Can get with Most Credit Cards

Tiered Cash-Back Cards

One of the most popular options is tiered rewards cards. With a layered cashback card on certain types of purchases, you will be offered a cashback bonus of at least 2 to 3 percent. For example, a card could give 3% cashback on gas and 2% cashback on groceries. Most tiered cards award cashback on all other purchases at least 1 percent.

Tiered cards are perfect for cardholders who spend a great deal on specific items, predictably. For example, if you eat out regularly or meet friends every Friday for a happy hour, you might gain a bit by using a card that gives back 3 percent cash on dining.

Similarly, if you have a long drive to work, a cashback card with a big petrol incentive will help you with that monthly petrol bill.

Flat-Rate Cash Back Cards

Cards that offer the same amount of cashback on each purchase are commonly referred to as flat-rate credit cards. Such types of tickets will give you 1.5 percent cash back, 2 percent, or even more. 

Usually, they encourage you to receive the unlimited cashback, instead of capping the total rewards you can receive in a quarter or year. This feature can be lucrative if you’re someone who uses their credit card for just about everything you’re spending money on.

Flat-rate credit cards, often prized for their simplicity, are ideal for cardholders who don’t want to spend much time thinking about rewards or those who use the same card for everything.

Rotating Bonus Cards

Such types of cards, also called 5 percent cash back cards give a major cash incentive (usually 5 percent) on purchase categories that rotate every quarter. For example, you might receive 5 percent cash back on all your department store purchases and your restaurant spending in another quarter.

A bonus category card will act as the only card in your pocket if you think that every quarter you can max out the bonus categories. But when combined with a flat-rate card, it is more convenient to use outside of the bonus categories. Combine this with a flat-rate card and a tiered card for maximum cashback possibilities.

If you don’t mind tracking bonus categories that change every three months then, with this type of credit card, you could earn significant cashback. Your card issuer is likely to send you a calendar ahead of time for the rotating categories. In fact, they might even indicate which retailers earn you a higher reward rate, such as Amazon or Target. 

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When comparing cashback credit cards, often picking the best card for you is down to the structure of the rewards card. No matter what you buy, does it give the same amount of cashback? And does it deliver more significant cash rewards on sales of those types?

The type of cashback card you choose could have a massive impact on how much you earn, depending on your spending habits. If you are the kind of spender who uses the same one or two cards for everything, you need to make sure that you are maximizing your rewards.