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%.

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