With all the different credit cards, it can be hard to know what’s good. This is especially true for cashback credit cards, where some offer up to 5% or even 6% back on certain purchases. But what about a card that offers only 3% cash back on most purchases? Is that good enough?

What is the average cashback percentage you can expect to get?

If you spend $1,000 per month on your credit card, the average cashback rate is 1.5%. That’s not a bad return for doing nothing at all! If you spend less than that, it makes sense to go for a higher rate. But if you are a big spender, there’s no need to worry about getting the best deal; 3% cash back is already quite good.

3% vs. 2%

As mentioned above, 3% cash back is better than 2%. It’s also better than 1%, 0%, and no cash back. If the card you’re looking at has a fixed rate of 1.5% or 2% or worse. Or if it has a rotating 5%/2% (or more) category—then that’s an even bigger deal in favor of 3%.

Finally, suppose your credit card offers a rotating 5%/2% (or more) category but only pays out during those times each quarter. In that case, once again, 3% wins out as long as you take advantage of it by spending in those categories every quarter.

Financial advisors at SoFi explain, “Earn up to 3% cash back toward your financial goals when you apply and get approved for a credit card, and set up direct deposit through SoFi.** Plus, there’s no annual fee.†.︎”

Is there a limit to how much you can earn?

There are no limits on how much you can earn. The more you spend, the more cash back you get. And the more cash back you get, the more money you’ll save. So there are no caps on how much people who use 3% Cash Back can earn—and that’s part of what makes it such a great program!

Should you get a fixed-rate or rotating category card?

If you’re unsure whether you want to go with a fixed-rate or rotating category card, let us be of some assistance.

  • Fixed-rate cards are generally better for people who don’t want to worry about what category they are shopping in. They can use their card whenever they want and get 3% cashback. However, there may be some months where you’re not earning much more than 1%.
  • Rotating category cards are better for people who want to earn as much money as possible while they shop (and take advantage of the annual bonus). You’ll have to choose which categories will help you save the maximum amount each month, but those rewards could add up quickly over time.

A 3% cash back credit card is a good card in addition to 1% or 2% reward cards. You can use them for all your spending, not just those who get you rewards.

You can also use them to get cash back on your following statement. This can be especially useful if you’re trying to keep up with a monthly payment or bill and don’t have enough money left after paying monthly bills. If this sounds like something that could work for you, then the 3% cash back credit card is something worth considering!