Are You Maximizing Your Cash Back Credit Card?
Are You Maximizing Your Cash Back Credit Card?
Cash back is an incentive that many credit cards offer to encourage the loyal and consistent use of their cards.
For some consumers, the promise of getting cash back for specific types of purchases is a major selling point in deciding which credit card to use. Depending on the card you choose and the types of purchases you make, you could earn cash back in the range of one percent to five percent, or possibly even more, on those expenditures.
Cash Back Credit Cards
At one time, the leading reward credit cards offered airline miles. These miles represented dollars you spent on travel and could be traded in for upgrades, future flights, hotel rooms, or other travel-related expenses. As credit cards evolved, so did the rewards.
Today, many credit cards allow customers to earn cash back on purchases they make at certain retailers. When appropriately maximized, this cash back can make a difference for your annual financial planning.
Tips for Maximizing Rewards
Many people who have cards that offer cash back for their purchases fail to take full advantage of the cash back benefits available to them. There are a few simple ways to ensure you maximize your built-in card rewards, so you get more cash back bang from your credit card bucks.
Choose your cash back card wisely. Different cards offer higher rewards for different categories of purchases. Popular spending categories include things like travel, restaurants, groceries, and gas.
Pay all your bills with your cash back credit card. Think of all the bills you currently pay each month using a check, debit card, or through online bill pay. Instead, consider using your rewards credit card and you can earn cash back on things you are already spending money on and not earning rewards.
Pay attention to the details. One of the biggest mistakes people make when attempting to maximize cash back on credit cards is failing to read the fine print. It is vital to know if there are quarterly or annual limits on the amount of cash back you can earn, or if those rewards have an expiration date.
Pull out card for a major purchase. Whether you are buying appliances for your home, electronics, furniture, or outfitting your new home office, if you are making big purchases, credit cards (especially those offering cash back rewards), are the best way to go.
Be aware of Annual Fees. Some rewards cards change annual fees from $95 up to $500 annually. If your card charges an annual fee, be sure you are earning enough value to offset the fee.
Take advantage of bonus categories. Another thing you can do to help maximize your cash back benefits with your credit card spending is to take advantage of bonus categories each month or during special promotional periods.
There is not a single cash back card that is best for everyone. Finding the best cash back credit card for you depends on your spending habits, the card’s specific reward program and benefits, and the value of the cardholder benefits you can use.
However, when you use all the above strategies together to maximize your cash back, you can get far more mileage in the form of cash back rewards from your efforts.
If you’re interested in a rewards credit card, take a look at our credit card options - including our Platinum Rewards Credit Card with No Annual Fee*!