5 reasons to keep a cash-back credit card in your wallet

21.08.2023 - 17:25 / thepointsguy.com

I started my credit card journey as a new teacher on a shoestring budget. I'll never forget the relief I felt when I realized I could redeem my first American Express Membership Rewards bonus for gift cards to buy a professional wardrobe. I didn't care or have the mental energy to learn that this wasn't technically the most valuable use of those points — I was just happy I could stop stressing about that expense.

I quickly realized I needed to keep my card strategy simple while I adjusted to the harsh realities of adulthood, so I set my sights on cash-back rewards. I got the Citi® Double Cash Card (see rates and fees), which allowed me to earn 2 cents back on every dollar I spent outfitting my classroom (shoutout to teachers buying their own pencils). You'll earn 2% cash back on purchases ; 1% when you buy and 1% as you pay. Then, I could redeem my rewards for whatever expense I faced, from my share of a group beach trip to an unexpectedly high electric bill.

The simplicity and flexibility of cash-back earning and redeeming were perfect for me then. But even now, after a decade of traveling on credit card rewards and with almost 20 cards in my wallet, I still love the versatility of cash-back rewards.

Here's why you might want to take a page out of my cash-back book.

It's easy to get caught up in the glamor of aspirational travel that travel rewards credit cards make possible. Who wants to talk about electric bills when we can talk about flying across the world in a lie-flat seat?

However, when you're on a limited budget and an unexpected expense comes up, having a stash of cash rewards you can redeem is just as exciting as booking a dream trip. If you're in a season of tight finances, a cash-back card is a perfect way to build in some cushion and be better prepared for whatever comes up, as long as you follow our first commandment of credit cards and pay off your balances in full each month.

Related: The best cash-back credit cards

We get it if you want to use your rewards to book complicated multi-stop, open-jaw, international airline award redemptions using airline award chart sweet spots. And we can help you reach that goal.

But when life gets chaotic, figuring out how to maximize your travel rewards can feel overwhelming. For those times, cash back is the way to go.

Each cash-back card is different, but they almost always have more straightforward earning structures and redemption options than their travel rewards counterparts. Typically, you can use the rewards to offset charges on your credit card statement, so you can use them without having to spend hours checking for award availability.

Related: How to redeem cash-back rewards from your credit card

Trip costs can add up even when you're