How do cash-back credit cards work?

Cash-back credit cards offer cardholders rewards on their spending in the form of statement credits or cash. A statement credit is a reduction in the amount due to the credit card company on your monthly bill. Note that rewards are not always available the month you earn them -- they are usually applied to your balance by credit card issuers after one or two billing cycles. The redemption process for cash-back credit cards is either automatic or very simple. Some cards automatically apply cash rewards to your statement balance each month. Others require you to log in and redeem available rewards points for statement credits. Most points don't expire, but you will lose them if you close the account before redeeming them.

How do you choose the right grocery credit card?

Deciding which grocery credit card is right for you will depend largely on your shopping habits. Keep in mind that most major credit card companies do not consider wholesale clubs and big-box stores like Walmart and Target to be grocery stores, so your purchases there might not qualify for the same rewards. Before applying for a grocery credit card, you'll want to closely read the fine print to make sure that your needs will be met depending on where you shop. One last thing to keep in mind: Don't fall for credit cards just because of a welcome bonus offer. While the immediate cash back can be appealing, it is typically a one-time or short-lived reward. Groceries are purchases that you need to make every month. You're better off focusing on maximizing these rewards over time rather than going for the up-front bonus.

What is a gas credit card?

A gas credit card is one that rewards cardholders for spending at gas stations. Most gas credit cards aren't offered by gas stations themselves. Instead, other credit card issuers offer bonus rewards on gas purchases, among others. The best gas credit cards offer up to 5% back on gas purchases, but most offer 2% to 3%.