What is 'Cash Back'

Cash back generally refers to a cardholder benefit offered by credit card companies that pay the cardholder a small percentage in cash rewards for each purchase. Cash back may also refer to the act of requesting cash from a merchant transaction which provides the buyer with physical cash in hand at the time of purchase.


Cash back can be a valuable benefit for consumers using all kinds of debit and credit cards. Automatic debit and credit card transactions simplify the ways in which consumers can pay for transactions. Companies supporting these services such as Visa and Mastercard as well as banks offering automated card transactions seek to make their cards activities convenient and competitive in many ways. Customers also have many options for utilizing these technological transaction services.

Cash in Hand

Retail consumers are often offered the opportunity to receive cash back during a debit card transaction. The customer can request to add an extra amount to the purchase price and receive the added amount in cash. Cash back using debit provides customers a convenient method of obtaining cash when purchasing goods and services without having to pay any fees or make a separate trip to an ATM or bank.

Cash Rewards

Cash back reward programs are also an attractive benefit that many cardholders consider when choosing a credit card. Cash rewards are a cardholder benefit offered by some credit card companies, paying the cardholder a percentage of the purchase price in cash as a reward for using the card in a transaction. This incentive is used as a means for attracting new customers and keeping old customers. Cash reward percentages can range up to 5% of a transaction. Some transactions may also offer double rewards through merchant partnerships. The cash back reward is often presented to the cardholder as a statement credit which can cover some of the costs associated with a credit card account or consumers may also receive the cash directly by deposit to an associated checking account or through the mail by check. Some card companies may offer cash rewards that can also be used toward specific purchases such as travel or partnership incentive programs.

Typically, cardholders must reach a certain level to redeem for cash or other benefits, usually around $25 for most cards. Some credit cards offer varying levels of cash back depending on the purchase. For example, a cardholder might earn 5% back on gas purchases, 2% on groceries and 1% on all other purchases.

The Discover It Cashback Match card offers one of the greatest cash back reward incentives with a 5% rotating cash back benefit and cash back matching in the first year up to $230. The card also offers an introductory one-year APR of 0%.

  1. Credit Card

    Issued by a financial company giving the holder an option to ...
  2. Debit Card

    A debit is a payment card that deducts money directly from a ...
  3. Convenience Check

    Convenience checks are blank checks provided by credit card issuers ...
  4. Cardholder Agreement

    A cardholder agreement is a document given to credit card holders ...
  5. New Balance

    The new balance is the sum of the previous balance, payments, ...
  6. Credit Card Funding

    Credit card funding is the use of a credit card account to provide ...
Related Articles
  1. Personal Finance

    Credit Card Review: Blue Cash Everyday Amex (AXP, KSS)

    Read about the Blue Cash Everyday Amex card, and learn how it saves cardholders money on groceries, gas and other household purchases throughout the year.
  2. Personal Finance

    Credit Card Review: Capital One Venture Rewards (COF)

    Learn how the Capital One Venture Rewards card helps you earn unlimited rewards miles to pay for all types of travel expenses, such as airfare and hotel costs.
  3. Personal Finance

    How Is Cashback Profitable For Credit Card Companies?

    Cashback rewards are not as beneficial to the consumer as they might initially seem.
  4. Personal Finance

    3 Best Credit Cards for Restaurants in 2016

    Credit cards with restaurant rewards can be lucrative, if they are managed properly. Here are three cards with the best features.
  5. Personal Finance

    Find The Best Cash Back Credit Cards

    Cash back credit cards let you spend your rewards on whatever you choose – rather than limiting you to travel benefits or other specialized bonuses.
  6. IPF - Banking

    Debit or Credit at the Gas Pump: An Easy Choice

    Using credit rather than debit at the gas pump doesn't just provide more fraud protection. It also could give consumers lucrative benefits.
  7. Personal Finance

    4 Best Credit Cards for Military Veterans in 2016

    Discover the four best credit cards for veterans, including the programs with the best airline mileage rewards, points for dining out and gas purchases.
  8. Personal Finance

    3 Best Credit Cards for Shopping at Amazon in 2016 (AMZN)

    Find out how Amazon.com shoppers can earn maximum cash back on their purchases with Amazon-focused cash-back rewards credit cards.
  9. Managing Wealth

    Millennials Guide: Picking the Best Rewards Cards

    There are perks a-plenty on offer, but you have to find the right plastic for your lifestyle.
  1. Can you pay off your Best Buy credit card in store?

    Learn how you can pay your BestBuy credit card in stores using cash or check. You can also pay by mail, online or over the ... Read Answer >>
  2. Which bank actually issues the Best Buy credit card?

    Learn that the Best Buy credit card is issued by Citibank, and offers its holders either 5% back in rewards or special interest-free ... Read Answer >>
  3. Can the Best Buy credit card be used anywhere?

    Learn how the Best Buy credit card can only be used in Best Buy stores and online to make purchases through the Best Buy ... Read Answer >>
  4. Should I pay my mortgage with my credit card to earn rewards?

    If you try to pay your mortgage with a credit card to earn cash back rewards, you'll discover that your options are extremely ... Read Answer >>
Trading Center