Skip to main content

Understanding 2% cash back credit cards

Time to read min

    Quick Insights

    • Cash back credit cards provide opportunities for cardmembers to earn a percentage back from their purchases.
    • For example, if you spend $100 with a 2% cash back credit card, you could earn $2 in cash back.
    • Some cash back credit cards have different cash back rewards rates for different spending categories.

    When choosing your next credit card, it may be beneficial to research cash back reward credit cards. This is because you could earn a percentage back in rewards from eligible everyday purchases.

    Some cash back credit cards have flat rate rewards, meaning you can earn the same percentage of cash back on all eligible purchases. Others have tiered rewards, where you can earn a different cash back rate for different spending categories.

    Keep reading to learn about whether a 2% cash back credit card is the optimal choice for you and your wallet, plus details about earning and redeeming credit card rewards.

    How cash back credit cards work

    Cash back is a type of credit card reward that cardmembers can earn on certain purchases. Different credit cards have varying cash back rates and redemption options. In general, cash back usually can be redeemed for statement credits, a direct deposit to a checking account, gift cards or travel.

    You may also be able to earn cash back at an accelerated rate on specific spending categories for certain credit cards. While the rate will vary by credit card, some common cash back categories include restaurants, gas stations and grocery stores. Your credit card may also provide rotating offers where you can earn cash back at an accelerated rate for a certain period of time when you spend in specific categories.

    Check your specific credit card’s guide to benefits for details on how to earn and redeem rewards.

    Calculating 2% cash back credit card rewards rate

    Considering a card with a 2% cash back rate? While each card may have specific rules and earnings categories, you can generally calculate the amount you’ll receive back on eligible purchases with a quick math equation.

    If you spend $100 on eligible purchases with your 2% cash back card, you can expect to earn $2 in cash back. Note that this may vary based on your card’s specific terms and conditions.

    In general, cash back credit cards tend to offer earning rates between 1% and 5% (depending on the credit card and earnings categories). So a cash back credit card that earns a flat 2% rewards rate may be a good option for those who prefer consistent cash back on everyday purchases.

    Next, we cover different ways to earn cash back with credit cards.

    Different ways to earn cash back with credit cards

    There are three primary ways to earn cash back that may vary depending on your specific credit card:

    • Flat rate cash back: When a card earns cash back at a flat rate, that means it will earn the same amount on any eligible purchase. So if you have a 2% cash back credit card, you can earn 2% cash back on purchases.
    • Tiered cash back: Tiered cash back cards offer higher earnings potential in different categories. Say you have a cash back credit card that earns 2% on most purchases, but 3% on dining and travel-related purchases. This is considered a tiered cash back credit card.
    • Rotating cash back: Rotating cash back refers to credit cards that provide different elevated earnings categories (typically either monthly or quarterly). This means you could temporarily earn a higher rate of cash back in specific categories, depending on your card’s specific offers.

    How to redeem cash back

    Chase credit cardmembers can redeem their cash back for rewards through the Chase Ultimate Rewards® online portal. Generally, Chase cash back rewards can be redeemed for the following categories:

    • Cash back: Cardmembers can receive straightforward cash back through either a statement credit or via direct deposit into most U.S. checking and savings accounts. There is no minimum amount for cash back redemption.
    • Gift cards: Browse the Ultimate Rewards portal to find rotating gift card redemption options. There are typically various shopping, dining and entertainment-related gift cards available.
    • Amazon: If you link your Chase credit card to your Amazon.com account, you may be able to Shop with Points on eligible Amazon purchases during checkout.
    • Travel: Planning a trip? Another option is to use your cash back to book flights and accommodations through Chase Travel.

    In summary

    If you’re looking to apply for a cash back credit card, it may be helpful to review different cards’ earning rates to see which one makes the most sense for your lifestyle. For example, you might prefer a credit card with a flat cash back rate for consistent cash back. Or, if you tend to spend more in certain categories, a card with tiered reward options might make more sense.

    What to read next