The Tip Jar: The best cash back credit cards out there

If you're spending, you might as well get something back for it.

It took me a long time to warm up to credit cards. The idea of having access to money that exceeded the amount in my bank account seemed too great a temptation to resist.

In search of a better credit score I eventually had to bite the bullet, and now I do the majority of my spending on a cash back credit card.

The premise of a cash back card is simple: You spend on your credit card, and you get a percentage back as a credit on your account.

Naturally, there are a lot of them out there, and the right one for you will depend on how you spend. The Tip Jar scoured the market to pick out some of the best cards in different categories.

Before we get going, here's a short video explaining all that confusing credit card jargon:

Best for grocery shopping

American Express Blue Cash Preferred Card

Credit score needed: Good to excellent (690-850)

Upside: This gives you 6 percent cash back on up to $6,000 a year of grocery store spending. So if you spend that full amount you'll get $360 back.

You also get 3 percent cash back at gas stations and department stores, and 1 percent cash back on all other spending. Right now the card is offering a $250 bonus if you spend $1,000 in the first three months.

Nerdwallet has a good tip: By buying gift cards at grocery stores, you can effectively get 6 percent cash back on spending at restaurants and other retailers.

Downside: It's Amex, so you always run the risk it's not accepted somewhere. And the grocery store offer is only good provided you don't shop at "superstores" or wholesale clubs (so Costco doesn't qualify).

Also, it carries a $95 annual fee, so this isn't the card for you if you're not planning on spending a lot on it.

Best for sign-up bonus

Discover it Cash Credit Card

Credit score needed: Good to excellent (690-850)

Upside: This card has a first-year offer that sees Discover double any cash back you earn in the first 12 months.

It also offers 5 percent cash back as rotating bonuses in four categories that change every three months: gas stations and wholesale clubs; home improvement stores and wholesale clubs; restaurants; and and Target.

It has 1 percent cash back on all other purchases, and no annual fee.

Downside: Speaking as someone who has a rotating bonus card (which doesn't feature on this list, by the way), it can be a pain to have to activate bonuses every three months – and can cost you if you forget.

The bonuses are good provided you're a Costco, Sam's Club, Amazon or Target shopper, but less so if you shop at Cub, Walmart or other grocery stores.

Best for everyday spending

Citi Double Cash Card

Credit score needed: Good to excellent (690-850)

Upside: With the Citi card you get 1 percent cash back on all your spending, and an extra 1 percent when you pay your bill off – that's a market-leading 2 percent on everyday spending.

It also comes with no annual fee, there's no cap on the amount of cash back you can earn, and you don't have to worry about signing up for rotating bonuses.

Downside: Unlike most other cards, you don't get a cash bonus if you spend a certain amount in the first few months after signing up.

It's also not good for using abroad – you get charged a 3 percent fee when you use it outside of the U.S.

Best for average credit

Capital One Quicksilver Cash Rewards Credit Card

Credit score needed: Poor to excellent (350-850)

Upside: It's designed for people who are rebuilding their credit score so it's easier to get accepted, even if you've defaulted on a loan or credit card recently.

It offers 1.5 percent unlimited cash back on all spending, and doesn't charge you any foreign transaction fees. 

Downside: It charges an annual fee of $39, which isn't great if you're struggling.

Its regular APR rate of 24.99 percent is high as well, so you need to make sure you don't miss a payment. 

Best for students

Bank of America BankAmericard Cash Rewards Card for Students

Credit score needed: Fair (620-659), or limited history (fewer than three years of credit)

Upside: It has no annual fee and offers a $150 bonus if you spend $500 in three months.

There's 1 percent cash back on all spending, 2 percent for spending at grocery stores and wholesale clubs, and 3 percent cash back at gas stations.

Downsides: Cash back is only available on $2,500 of spending per quarter, after which it's just a regular credit card.

Also, the grocery store offer doesn't extend to superstores or smaller stores, which includes drugstores and convenience stores – we're not sure if this would include the TargetExpress in Dinkytown.

Important things to know about credit cards

– Before signing up for a credit card, read through the terms and conditions to check for any hard-to-find caveats to what they're offering.

– Promotional offers are good if used correctly, but find out what happens once those periods are over.

– Pay off your credit card balance every month so you're not charged any interest. If you can't afford to, make sure you at least pay the minimum due so you're not hit with late fees.

– Stay under 30 percent of your credit limit. If you use more than 30 percent across all of your cards (credit utilization ratio), it'll start to affect your credit score. And check out this previous story for ways to boost your credit score.

– Stay safe from fraud: Nationwide has a number of tips on how to do this.

– Do your own research. The picks above are just my own opinion on what the best card is in each category – but there are plenty out there that could be suited to your individual needs. Shop around.

Next Up