1. What’s the difference between cash back cards vs reward cards?Cash back cards give you cash credits whenever you make purchases, while rewards cards give non-cash perks like free airline tickets or hotel stays. Most cash back credit cards let you redeem the credits for actual cash or gift cards, or you can apply them directly to your credit card bill to pay off your balance.
2. Are cash back credit cards taxable?The credits you earn through cash back credit card offers are only taxable if you receive them in cash that’s recorded as part of your annual income. For example, if you get a cash back check from a credit card company and deposit it into your bank account, then it will show up as taxable income on your bank statement. If you’re not sure or have questions, consult a qualified tax professional.
3. What’s the best cash back credit card?Compare cash back credit cards based on your individual spending habits to ensure the best match. For people who frequently shop at Costco, the True Earnings American Express Card may be a good choice. Generally, the best cash back credit card offers are those that offer generous ways to earn cash and have no annual fee. Some of the top cash back credit cards for all-purpose spending are the Citi Dividend Platinum Select, the Chase Freedom, and the Discover More credit card.