2% Cash Back Credit Cards | Credit card

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Cash back credit cards offer the ability to earn cash back every time you make a purchase, but how you earn that cash back can vary from card to card.

2% cash back credit cards allow you to earn a great rewards rate no matter where you spend your money. However, they also limit your ability to maximize your rewards on certain categories where you can perform better with a different card.

Here’s what you need to know about 2% cash back credit cards and if they’re right for you.

How common are 2% cash back credit cards?

There are three different ways to earn rewards on a cash back credit card. Depending on your spending habits and the balance you want between simplicity and maximizing rewards, one may be better than the other:

  • Flat-rate cards. These cash back cards offer a fixed reward rate on every purchase you make. They usually offer 1%, 1.5% or 2% back, but there is also a 2.5% cash back credit card and others that can offer more if you clear certain hurdles.
  • Tiered reward cards. These cards offer a tiered rewards system, giving you a higher rate on certain spending categories. However, the base rewards rate is usually low at 1% or 1.5%, which is what most of your purchases will earn.
  • Rotating rewards cards. There are a few cash back credit cards that offer bonus rewards on categories that change every few months. You are generally limited on the amount you can earn in bonus rewards each quarter, and the base reward rate is usually 1%.

The good news is that there are several credit card issuers that offer 2% cash back cards, so you’ll have plenty of options to choose from. In some cases, you may also earn a higher rewards rate on certain purchases.
“Credit cards that offer tiered bonus categories or quarterly rotating categories can get extremely messy,” says Maya Nijhawan, co-founder of Finch, a company that offers a rewards card that lets you accumulate credit without debt. But if you exclusively use a flat-rate card, you might miss out on better rewards on another card, she adds.

“The biggest benefit of a fixed rate rewards card is simplicity,” says John Cabell, director of banking intelligence and payments at JD Power. “Lump sum rewards programs have a more consistent ability to earn over time, often regardless of the types of purchases made. These products are also generally very easy to use for those who do not wish to monitor and manage their earnings. rewards.”

Where to find 2% cash back cards

If you’re looking for a credit card with 2% or more cash back, there are plenty of great options to consider. Keep in mind, however, that some require you to jump through hoops to maximize your rewards:

  • Active Wells Fargo payment card. The card offers a flat 2% cash back on every purchase you make, plus a $200 cash rewards bonus when you spend $1,000 in the first three months. It also offers an introductory promotion of 0% APR for the first 15 months on purchases and balance transfers. It does not charge an annual fee.
  • Citi Dual Charge Card. You’ll earn 2% cash back on every purchase, with a catch – you’ll get 1% back when you make a purchase and 1% back when you refund it. The card also offers an introductory promotion of 0% APR for 18 months on balance transfers. It does not charge an annual fee.
  • Alliant Cashback Visa Signature Credit Card. The card offers 2.5% cash back on up to $10,000 in monthly purchases (1.5% thereafter), but you must meet the requirements for a high rate chequing account with credit union and maintain an average daily account balance of $1,000 each. trimester. It does not charge an annual fee.
  • Capital One Spark Cash Plus. The cash card is designed for business owners and offers unlimited 2% cash back on every purchase plus a cash bonus of up to $1,000 – that’s $500 when you spend $5,000 in first three months and an additional $500 when you spend $50,000 in total during the first six months. The card also offers a $200 cash bonus when you spend $200,000 per year, but it has an annual fee of $150.
  • Apple Card. The card offers 2% cash back on all purchases you make with Apple Pay. Plus, you’ll get 3% cash back on purchases made at Apple and other select retailers and 1% back on everything else. It does not charge an annual fee.
  • SoFi credit card. The card offers unlimited 2% cash back on every purchase, but only if you redeem your rewards to save or invest with SoFi or pay off an eligible SoFi loan. All other redemptions only earn 1%. The card also allows you to redeem your rewards for cryptocurrency. It does not charge an annual fee.
  • Synchrony Premier World Mastercard. This card offers unlimited 2% cash back on every purchase, no strings attached. However, there are no other relevant benefits or features. It does not charge an annual fee.
  • PayPal Cashback Mastercard. You can earn unlimited 2% cash back with this card, but you’ll need a free PayPal account to apply. It does not charge an annual fee.
  • Visa Fidelity Rewards signature card. The card offers 2% cash back on every purchase, but you’ll need to deposit your rewards into an eligible Fidelity account to get that rate. It does not charge an annual fee.
  • Evergreen Visa Card by FNBO Rewards. The card offers unlimited 2% cash back on every purchase, plus a $200 cash bonus when you spend $1,000 within the first three billing cycles. The card also offers an introductory APR of 0% for 12 months on purchases and balance transfers. It does not charge an annual fee.
  • TD Double Up Credit Card. You can earn 2% cash back on everything with this card if you redeem your rewards in an eligible TD bank account. Otherwise, you will only earn 1% back. It also offers $100 in bonus cash when you spend $1,000 in the first 90 days and a 0% introductory APR on balance transfers for 15 months. It does not charge an annual fee.
  • Cashback Key Credit Card. The card’s default reward rate is 1.5%, but you can get unlimited 2% cashback if you have a KeyBank checking account with at least $1,000 in monthly deposits and a savings account or investment with a minimum daily balance of $1,000. The card also offers an introductory APR of 0% on balance transfers for 12 months. It does not charge an annual fee.
  • PenFed Power Cash Rewards Visa Signature Card. Like the Key Cashback credit card, this one offers 1.5% cash back as the default rate. But if you’re an eligible PenFed Honors Advantage member, you can get 2% back on everything. The card also offers a $100 statement credit when you spend $1,500 in the first 90 days, as well as a 0% introductory APR on balance transfers for 12 months. It does not charge an annual fee.

Also note that you can earn up to 2.62% cash back on your everyday purchases with the Bank of America Premium Rewards Credit Card and the Bank of America Premium Rewards Elite Credit Card. However, you must have at least $50,000 in assets in qualifying accounts with Merrill Lynch or Bank of America to earn a rate above 2%.

Which 2% cash back credit card is right for you?

No single credit card is best for everyone, so it’s important to compare all of your options to determine which is right for you.

As you can see, even something as simple as a fixed 2% cash back card can get messy when the card issuer adds hurdles to earning that rewards rate. Additionally, some 2% cash back cards also offer other benefits, such as a sign-up bonus, 0% APR introductory promotion and more.

“Find out what kind of credit card you really need and find the card that fits your spending behavior and lifestyle,” says Nijhawan.

If you’re considering a 2% cash back card, take the time to shop around. Think about what it takes to earn the rewards rate, if any, and what other card benefits are important to you. If you think you might miss the rewards rate due to requirements, consider another card.

Also keep in mind that all of these cards generally require you to have good credit, which starts at a FICO score of 670. If your score is below this threshold or just above, you may want to work on the build your credit before you apply.

How to Maximize Your Cash Back

If you’re considering a 2% cash back credit card, you’ll earn a great rewards rate on every purchase. However, if you want to get the most out of your daily spending, it might be a good idea to add one or more other rewards credit cards.

For example, some cards offer up to 6% cashback on purchases at supermarkets, and others up to 5% at gas stations. “Align your spending with the rewards program to get the most revenue,” Cabell says.

And for all your spending that doesn’t earn you those bonus rates, you can use your 2% cash back card. This approach makes things more complicated and requires more organization, especially to make sure you pay your bills on time each month. But the strategy can pay off big in the long run in the form of more cash rewards.

If you want to keep things simple, Cabell recommends planning to use your 2% cash back card on everything and paying your monthly bill on time and in full to avoid high interest charges.