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Can You Get Cash Back with a Credit Card?
July 1, 2025
Quick Answer
Yes, you can get cash back from a credit card, primarily through two distinct methods: earning rewards on purchases or taking a cash advance against your credit line.
Should You Get Cash Back With A Credit Card?
Getting cash back with a credit card has both advantages and potential drawbacks.
Benefits
- Convenience: You can get cash while making a purchase, saving a separate trip to an ATM.
- No ATM Fees: It allows you to avoid potential fees from out-of-network ATMs.
- Transaction Record: The withdrawal is documented on your credit card statement for easy tracking.
Costs
- Cash Advance Fees: Issuers often treat this as a cash advance, which typically incurs a fee.
- Immediate Interest: Interest on cash advances usually starts accruing right away, often at a higher rate than purchases.
- Withdrawal Limits: The amount of cash you can receive is generally restricted by the merchant's policy.
- No Rewards: You typically do not earn rewards points or cash back on the withdrawal amount itself.
How to Get Cash Back With A Credit Card
Earning cash back with your credit card is a straightforward way to get rewarded for everyday spending. Follow these steps to maximize your returns and make your money work for you.
- Analyze Your Spending Habits: Before choosing a card, review your budget to understand where your money goes. Identifying your top spending categories—such as groceries, gas, or dining—is crucial for finding a card that offers the most value.
- Choose the Right Card: Select a credit card with cash back rates that align with your spending patterns. Different cards offer higher rewards for specific categories. You can use a resource like the Kudos' Explore Cards tool to compare options and find a suitable match.
- Use the Card Strategically: Make your chosen card your go-to for everyday purchases, particularly in its bonus categories. This ensures you are consistently accumulating cash back on expenses you would incur anyway, turning regular spending into savings.
- Redeem Your Rewards: Regularly check your rewards balance and understand your redemption options. Most issuers allow you to claim your cash back as a statement credit, a direct deposit into your bank account, or a physical check.
Impact On Your Credit Score
Using a cash back credit card can affect your credit score in several ways, both positively and negatively. Here are a few key factors to keep in mind.
- Credit Utilization Ratio. This ratio compares your balance to your credit limit. Keeping your balance low relative to your limit can positively impact your score, showing responsible credit management.
- Hard Inquiries. Applying for a new card triggers a hard inquiry on your credit report. This can temporarily lower your score by a few points, so apply for new credit sparingly.
- Payment History. Consistently making on-time payments is crucial for a healthy credit score. Late payments can significantly damage your credit and stay on your report for years.
Alternative Ways To Get Cash Back
Debit Card Transactions
One of the most straightforward alternatives is using your debit card at a point-of-sale (POS) terminal. Many grocery stores, pharmacies, and large retailers offer a cash-back option when you pay with your debit card. You simply select the amount you wish to withdraw, and it's added to your purchase total. The funds are then drawn directly from your checking account, eliminating the need for a separate ATM visit or a credit card.
Third-Party Apps and Loyalty Programs
Another method involves using third-party cash-back apps or store loyalty programs. Services like Rakuten or Ibotta allow you to earn rebates on purchases made through their platforms, which can be transferred to your bank or PayPal account. Additionally, many retailer loyalty programs accumulate points on your spending that can be converted into cash discounts or store credit, providing a similar financial benefit without a direct cash withdrawal at the register.
Choose the Right Card to Get Cash Back
Ready to start earning? The first step is finding the right plastic for your wallet. With nearly 3,000 cards on the market, picking one can feel overwhelming. Kudos simplifies the process with its personalized Explore Tool, which helps you compare options and find the perfect match for your spending habits. Whether you're after travel points, dining rewards, or straight-up cash back, you can find your next card and maximize your returns.
For those wanting to squeeze even more value from their cards, Kudos is the ultimate free tool for online shopping. Plus, we have a special offer of $20 back on your first qualifying purchase when you sign-up for free using the code "GET20" and shop at a Boost retailer.
Frequently Asked Questions
How do I redeem my cash back rewards?
You can typically redeem rewards as a statement credit, direct deposit into your bank account, or a check.
Do cash back rewards expire?
It depends on the card issuer. Some rewards expire, while others do not as long as your account is active.
Is cash back considered taxable income?
No, the IRS generally considers cash back from credit card spending a non-taxable rebate, not additional income.
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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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