One of the most effective methods to earn rewards on day-to-day purchases is via the use of cash back credit cards.
You may considerably enhance the amount of cash back you get by using the appropriate tactics and gaining an awareness of how to make the most of the perks offered by your card.
Here is a tutorial that will walk you through some of the most effective strategies for making the most of your cash back credit card.
1. Select the Credit Card That Offers the Best Cash Back
Before choosing a card, it is important to have a thorough understanding of your spending habits. Take a detailed look at the areas in which you spend the most money. A card that provides a larger cash back on eating may be the ideal option for you if you are someone who eats out often. If you spend the most of your money on groceries, you should seek for a credit card that offers the highest possible cash back in that area.
Top Suggestions to Consider:
In the United States, the Blue Cash Preferred® Card from American Express provides a cash back rate of 6% in supermarkets (up to a maximum of $6,000 per year, after which it gives a 1% cash back rate).
When it comes to eating and entertainment, the Capital One Savor Cash Rewards Credit Card provides a cash back bonus of 4% on such purchases.
For petrol, the Citi Custom CashSM Card provides a cash back bonus of 5% on your highest spending category throughout each billing cycle, up to a maximum of $500. This bonus may be used to gas purchases.
The Citi® Double Cash Card is an example of a flat-rate cash back card that gives 2% cash back on general spending. This card offers 1% cash back when you make a purchase and 1% cash back when you pay down your amount.
2. Stack Your Cash Back with Other Rewards
You may earn extra cash back or points on your purchases by using cash back portals, which are offered by many credit card issuers. These portals enable you to browse the internet and make purchases. For instance, the Ultimate incentives® gateway offered by Chase provides additional incentives in addition to the points that you would receive by using your card.
Combine with Programs That Reward Loyalty: Your earnings may be increased by a factor of two if you combine your cash back card with retailer loyalty programs. For example, if you have a loyalty card to a grocery shop and you use your cash back credit card often, you will be able to receive points from both of these programs.
3. Maximize Rotating Category Bonuses
There are cash back cards that provide 5% cash back on rotating categories every quarter. Some examples of these cards are the Chase Freedom FlexTM and the Discover it® Cash Back. Some examples of these categories include petrol stations, grocery stores, eating establishments, and purchases made on Amazon.com. For the purpose of taking advantage of the greater cash back rates, it is essential that you activate these categories on a quarterly basis.
Organize Your Purchases: If you are aware of the categories that will provide you with the most cash back, you should schedule your more substantial purchases around those periods. during instance, if your credit card provides a cash back rate of 5% on purchases made at home improvement retailers, you should schedule any significant home repair tasks during the quarter in question.
4. Make the Most of any Sign-Up Bonuses Available
The Importance of Timing: There are several cash back cards that provide rewarding sign-up bonuses if you spend a particular amount during the first few months of using the card. If you know that you will be spending more money in the future, such as around the holidays or when you are making a significant purchase, you should time your application so that it coincides with that same period.
Best Bonuses for Signing Up:
Your first three months of Chase Freedom FlexSM will earn you a bonus of $200 if you spend $500 on purchases during that time period.
The Citi® Double Cash Card does not provide a typical sign-up bonus; but, it does give 2% cash back on all transactions, which may rapidly build up to a significant amount of money.
5. Use Multiple Cards Strategically
One way to optimize rewards in various spending categories is to use numerous cash back cards. This will allow you to maximize the benefits you get in each category. It is a good idea, for instance, to use a credit card that provides a high cash back on groceries when you go grocery shopping, and another card that provides a higher cash back on petrol when you go gas shopping.
Although it is wonderful to have a number of cards, you should try to avoid carrying an excessive amount of them. Pay attention to a select few credit cards that provide the greatest rewards across the areas of spending that you do most often.
6. Pay Attention to Card Benefits and Offers
Investigate extra Benefits: A great number of cash back cards come with extra advantages, such as longer warranties, price matching, and insurance against future purchases. You may save money and increase the value of your cash back rewards by taking advantage of these incentives.
Keep an eye out for special deals: Credit card issuers often conduct special promotions, such as additional cash back for using your card at specified merchants or at particular periods of the year. These opportunities are available to cardholders. Keep an eye out for these deals on the website or app associated with your card.
7. Redeem Your Cash Back Wisely
Increase the value of the redemption: Certain credit cards provide more advantageous redemption choices than others. Some credit cards, for instance, may allow you to redeem cash back for bill credits, cheques, or even direct deposits directly from your account. If you redeem your points for travel via the issuer’s gateway, you can get a higher value from other organizations.
Redemptions of lesser value should be avoided: In spite of the fact that it is tempting to redeem your cash back for gift cards or items, the value that these alternatives often give per dollar is typically lower than that of a cash redemption.
8. Make sure you are always on top of your payments
Maintain a Full debt: If you want to get the most out of your cash back card, you should always be sure to pay off your debt in full every month. Charges for interest might soon cancel out any benefits that you have earned.
In order to ensure that you never miss a payment deadline, you should set up payment notifications by using the app or online portal that comes with your card. In order to guarantee that your debt is paid off on a monthly basis, several credit cards even let you to set up automated payments.
9. Keep an eye out for annual fees
Consider the Annual Fee in Relation to the Rewards: Although some cash back cards come with annual fees, they also provide better rewards rates or extra bonuses above other cards. Take into consideration if the cash back and perks you get are sufficient to compensate for the price.
A No-Fee Alternative Should Be Considered: You might think about switching to a card that does not charge you a fee but still provides you with adequate rewards if you are not earning enough cash back to warrant the price. The Citi® Double Cash Card and the Chase Freedom Unlimited® are two examples of credit cards that provide generous rewards without charging an annual fee.
10. Leverage Credit Card Rotations
Take Advantage of Promotions Offered by Cards: During different seasons of the year, some issuers provide enhanced cash back on certain types of products. The best way to optimize your cash back rewards is to rotate your cards so that you can take advantage of these deals.
Promotions should be coordinated with seasonal spending: Make your shopping decisions based on these exclusive offers. Take, for example, the case where your credit card gives higher cash back on groceries over the holiday season. If you want to get the most of your benefits, you should use that card to purchase for your holiday meals.
11. Pay any day-to-day expenses using your credit card
Place everything you own on your card: You should think about using your cash back card for all of your usual bills, such as petrol, food, and utilities, so long as you are able to pay off your debt in full each month. The higher the amount that you charge, the more cash back you will get.
Make Recurring Payments Automatically: It is recommended that you make your cash back card the means of payment for recurrent costs such as your phone bill, payments for streaming services, and payments for insurance services. It is because of this that you will continue to receive rewards even on payments that you may forget about.
12. Make sure you keep note of your cash back
Pay Attention to Your Earnings: You should check your credit card account on a regular basis to determine the amount of cash back you have earned. You will find that this helps you maintain your motivation to continue using your card for your day-to-day expenditures.
Set goals for your cash back: You may want to think about establishing a target for the amount of cash back you wish to earn in a year. By doing so, you may maintain your concentration on making efficient use of your card.
Final Thoughts
Obtaining the most possible cash back on daily transactions calls for a mix of selecting the appropriate card, spending in a planned manner, and maintaining awareness of the perks and promotions offered by your card.
Making the most of your day-to-day purchasing may be accomplished by following these tricks, which will allow you to greatly improve the amount of cash back you get.
It doesn’t matter whether you want to save money on groceries, petrol, or eating out; the following advice may help you get the most out of your cash back credit card.
