Cash back rewards explained...

[MichWolverines1983]

So, I am in the process of basically building my credit (with one medical bill to soon be paid off) from scratch and wanted clarification of cash back rewards. I have no plan on opening another credit card account until some time next year. I have one secured card (Capital One) and will know what my next step is within 6 months. I plan on using the card for groceries on/around 1st of every month and paying the balance off within a few days. Will I get cash back rewards this way or does the balance have to be reported at the end of the billing cycle to get the rewards? I've always wondered about this and hope someone can help a rookie out and send me in the right direction. Cheers and thanks in advance.

[Brian_Earl_Spilner]

The secured card doesn't have rewards. However, if you do get one, like the Quicksilver, you get cashback on everything you spend. Doesn't matter what reports. Where cashback gets tricky is the redemption. Some cards allow cash to be sent to your bank, some allow statement credit. Ones that allow statement credit may or may not count towards the minimum payment. There are some that require a minimum amount to be redeemed and/or in certain amounts. Some give your rewards right away at the end of the month while others require processing.

[MichWolverines1983]

Thanks, Brian. I know the Capital One Secured Card doesn't have rewards. I was just asking about cards in general that do offer cash back rewards. Thanks for the clarification on the rewards.

[FormerCollegeDJ]

RE: Cash back rewards options

I don't have much to add to what Brian said; he outlined things pretty well.  You will want to make sure your purchase is posted to your account (i.e. purchase doesn't still show as pending) before you make a payment to ensure you get rewards for the purchase.

The thing I'll add is that for your use case scenario you'll probably be best served by a flat cash back rate credit card, say like the Chase Freedom Unlimited, Capital One Quicksilver, or Wells Fargo Cash Wise (all 1.5% cash back cards; the CFU also has some bonus categories) or the Citi Double Cash (2% cash back card).  Cards that offer 2% cash back at grocery stores and offer selectable categories for other cash back rewards, like the Bank of America Cash Rewards, might also be a good option.  Finally, Discover (particularly the Cash It card) could be a good, attainable option; it has rotating quarterly 5% cash back categories (with groceries usually being one of those categories for one quarter per year annually), 1% cash back on other purchases, and cash back match (i.e. Discover will double whatever cash back you receive) for the first 12 months.  Discover cards are often a little easier to get than other banks' cards for people who have a limited credit history.

If those cards aren't available to you because your credit score is too low or you don't have a long enough credit history, look into what cards are offered by your bank/credit union, especially if that financial institution isn't a mega bank (i.e. like Chase, Bank of America, Wells Fargo, or Citi, or even US Bank, Truist, PNC Bank, Capital One, or TD Bank).  Because you already have a relationship with them, you may be more likely to be able to get a solid rewards card through them.  Even if the best rewards cards you can get later this year are 1% cash back cards because of a low credit score or limited credit history, that is still better than 0%, and it will allow you to get some rewards during the time you are building your credit and start becoming eligible for better rewards credit cards.

[longtimelurker]

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@Brian_Earl_Spilner wrote:

The secured card doesn't have rewards. However, if you do get one, like the Quicksilver, you get cashback on everything you spend. Doesn't matter what reports. Where cashback gets tricky is the redemption. Some cards allow cash to be sent to your bank, some allow statement credit. Ones that allow statement credit may or may not count towards the minimum payment. There are some that require a minimum amount to be redeemed and/or in certain amounts. Some give your rewards right away at the end of the month while others require processing.

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And some give the rewards as the transaction posts.    But, as @Brian_Earl_Spilner says,  it doesn't depend on reporting, just on what is spent (and in cases, such as Double Cash, what is paid).