Want Easy Rewards? These Flat-Rate Credit Cards Take the Guesswork Out of Earning

Plenty of reward credit cards let you earn cash back for purchases, but not all of them offer the best cash-back rate. You'll want to be intentional as you compare cash-back credit cards and look for options that put the most money back into your pocket.

Credit cards that give you 2% cash back on all purchases offer one of the highest flat-rate rewards out there. Other cards offer just 1.5% cash back or 1% cash back on regular spending. Many cards in this category also come with generous welcome bonuses, no annual fee and introductory APRs for purchases and balance transfers. Here's how to find the best one for you.

What is a flat-rate credit card?

A flat-rate credit card is a rewards credit card that offers the same rate of cash back or other rewards for everything you buy. This makes them unique from other rewards cards that might offer more points or cash back in popular spending categories like dining out, travel or groceries.

✅Pros:

• Earn a higher overall rewards rate on all purchases  
• Simple rewards with no bonus categories to keep track of  
• The best 2% cash-back credit cards don't have an annual fee  
• You can pair them with another card to maximize your return  
• Some have introductory APR periods  

❌Cons:

• Lower rewards than a card with bonus categories  
• Limited redemptions for rewards  

How to choose a 2% cash-back credit card

As you compare cash-back credit cards, you should keep more than just the rewards rate in mind. Here are some additional factors to consider.

Welcome offers

If your preferred credit card has a welcome offer, be sure you can earn it without spending beyond your budget. Any overspending can eat into the value you'd get from the offer.

Perks

Some cash-back credit cards come with valuable benefits that can include purchase protection against damage or theft, cellphone protection or extended warranties. If you're planning to use your card for online shopping, furnishing a home or buying new tech pieces, consider a card that offers one or all those benefits.

APR and fees

If a card comes with an introductory APR offer, consider how long it lasts and whether it applies to purchases, balance transfers or both. Also, pay attention to the regular variable APR, and remember that the high interest rates on credit cards make carrying a balance very expensive over time.

Also compare cards based on whether they charge foreign transaction fees, late fees and cash advance fees. If you plan to use your card for debt consolidation, you'll also want to compare cards' balance transfer fees. Most balance transfer fees run from 3% to 5% of the amount being transferred, which is automatically added to the debt you're responsible for paying down.

If you do choose to use a balance transfer credit card, make sure you can pay off the balance within the given time frame.

How to get the most value from your flat-rate credit card

Applying for a cash-back credit card can lead to earning rewards for your most frequently bought items, but that's just the start. Follow these tips to maximize your card:

• Use your card for everyday spending and bills: Earning more rewards with a flat-rate card is easiest when you use it for groceries, gas, dining out, utility bills and other purchases you would normally make throughout the month.
• Only charge what you can afford to pay off each month: The high APR of most credit cards make carrying an outstanding balance expensive. You can avoid interest completely by paying your credit card statement balance in full each month.
• Avoid paying late: Avoid damage to your credit score and credit card late fees by paying your bill early or on time each month. You can even set up autopay for your credit card accounts to make sure you never miss a payment.
• Pair your 2% cash-back card with another rewards card: You can always pair your 2% cash-back credit card with another card that offers more cash back or points in other spending categories.

Alternatives to 2% cash-back credit cards

If you like the idea of earning rewards with 2% cash-back credit cards, but you're still not sold on the idea, there are a few alternatives to consider. The first is rewards or cash-back credit cards that offer more rewards in popular spending categories and a lower rate on everything else you buy. There are also a few debit cards that earn rewards, although not many do. 

How to apply for a credit card

Once you have your mind set on a flat-rate credit card or any other rewards credit card, take the following steps to apply:

1. Check your credit score: Knowing your credit score can help you figure out which credit cards you're eligible for. Consider getting a free credit score through programs like Capital One CreditWise or Chase Credit Journey, or from the three credit bureaus.
2. Fill out an application: You can apply online, in person or even over the phone. Plan to share information like your full name, address, phone number, monthly housing payment, household income and Social Security number.
3. Get approved and use your card carefully: If you're approved for the card, you'll want to have discipline when using it. This means charging only what you can afford and paying your balance on time and in full each month.

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