A cash rewards credit card will earn you money back on your purchases. It’ll often provide more flexibility than cards that offer points for frequent usage, as customers will sometimes struggle to find a way to redeem the points they earn. Alternatively, a cash rewards card can put money back in your pocket with every use, requiring far less effort.
While the concept is straightforward, making the most of a cash rewards card can take a little strategizing. With that in mind, the following tips can help maximize your cash back.
What’s the Best Credit Card for Cash Rewards?
The best credit card for cash rewards is one that allows you to maximize earnings without hidden fees or limitations hidden in the fine print. A credit card with an abnormally high interest rate or an annual fee can eat up your cash reward earnings. A credit card that offers limitations on how much you can earn, what category you must spend in to earn, or what times of year you earn may significantly limit the cash back earnings you’re enticed by when you sign up for the credit card.
Ways to Use Your Cash Rewards Credit Card Effectively
After you’ve done your homework, read all the fine print, and selected the best credit card for your needs, it’s time to make sure you’re getting the most out of it. Use these tips:
1. Make a Plan for When to Use Your Card
If your cash rewards credit card has opportunities to increase your earnings at certain times, take advantage of them. For instance, if you have a card that rotates earning categories, make sure you know when these categories change (usually quarterly) and make all qualifying purchases with that credit card. For example, if your card offers double cash rewards for athletic gear purchases, use that one when you buy a new baseball mitt for your child.
2. Charge Every Purchase to Your Credit Card
The more you put on your card, the more cash rewards you’ll earn. Using your credit card for all eligible purchases will help you earn cash rewards quickly. You just need to make sure you pay off your card every month if you use this approach so that you don’t accrue interest on your balance and cancel out your earnings.
Your goal is not to build debt by purchasing things you can’t afford, but rather to spend an amount you can cover with the money in your checking share. You can even make a payment on your account immediately after buying something with your credit card to avoid building up debt.
3. Track Changes in Terms
Credit card companies may periodically change their changes in terms, which can impact how and how much you can earn in cash rewards. Typically, they’ll notify you via mail or email when these changes occur, so make sure you read all communications from your credit card company so you can stay on top of changes and continue to get the most out of your cash rewards. When you get a notice informing you of a new policy, read it over. You may get more points if you use your credit card on purchases in a particular category, or maybe cash rewards have been limited to certain purchases.
If you have questions about the changes, contact your credit card company and ask. You deserve to understand how your credit card works and to question any adjustment to the terms. The better you understand your card’s benefits, the more money you can save.
4. Get Rid of Less Rewarding Cards
Do you still use cards that insist on giving points? It’s often better to make purchases with the one cash back card that offers rewards you can use right away, rather than buying with a card that won’t return your earnings using the method you prefer. You don’t necessarily have to go through the hassle of canceling a card, however, as this can impact your credit score. Instead, just keep the card in a secure place at home, and don’t use it unless you need to.
5. Compare Your Reward Offers
You should know how much cash back you receive with your card at all times. Keep track of your reward earnings, and periodically compare your card to others to ensure you’re getting the best return. You don’t want to swap out cards too often, as it’s not good for your credit rating to have too many credit cards. But it can be to your benefit to take advantage of a really great offer that gives you more cash back.
The Smart Card for Cash Rewards
If you want a credit card that pays you cash rewards, consider PSECU’s Founder’s Card. You earn 2%* or 1.5% cash rewards on every purchase with our card, and we don’t have any category restrictions. Visit psecu.com/founders to learn more.
Cash back credit cards reward you for doing something you would be doing anyway – spending money. They provide a smart way to grow your cash-on-hand with minimal effort. For more tips on making your money work for you, visit our WalletWorks page.
*You can earn 1.5% cash rewards on purchases. You can earn 2% cash rewards on purchases if you maintain a PSECU checking account and qualifying monthly direct deposit(s) of at least $500. See the Visa® Founder’s Card and Visa® Alumni Rewards Card Rewards Program Terms and Conditions for full details.