Guide to Use Your Credit Card Cash Back Rewards
The rewards credit card landscape is as competitive as ever, but one key difference between cards is how much cash back they offer. This guide breaks down the most important factors to consider when investing with a credit card and shows you how to make the most of your cashback benefits.
Consider the cashback rate.
When you’re looking for a cashback credit card, make sure that it has a high rate of return on the purchases that matter to you. Cash back rates vary greatly from one card to another, so be sure to check the fine print before applying for any cards. The rewards might not justify using your credit card over other payment methods like debit cards or cash if it’s higher. Some cards have higher interest rates than others, which means they’ll cost you more in interest charges if they’re not paid off in full each month (and sometimes even then).
SoFi experts explain, “One way to get your credit card cashback rewards is through direct deposit to a checking or savings account that you own.”
Use a rewards credit card for business expenses.
You can save yourself some money with a rewards card. Also, you can use your rewards credit card to pay for business expenses that you would otherwise be reimbursed for. Just keep track of how much you spend on those business expenses so that when it comes time to file taxes and get reimbursed, it’s easy for the company or person doing the reimbursements to see what was paid out and where it went.
Rewards cards aren’t designed specifically for this purpose like some other cards—they’re more geared toward personal spending. But if you’re careful about tracking your purchases and ensuring each purchase falls under the “business expense” category, then using a rewards credit card may help incentivize better spending habits!
Make unique purchases with your rewards credit card.
Every reward credit card has different rules for earning cash back. Some give you 1% back on all purchases, while others offer as much as 5% cash back on specific categories like gas and groceries. Most cards will also come with a sign-up bonus that gives you a lump sum of cash after making your first purchase. But regardless of the specific terms, if your goal is to maximize your reward returns, it’s essential to ensure that every cent gets counted towards your final tally.
Designate a cash back rewards credit card as your everyday spending tool.
Your cashback rewards credit card is best used for everyday purchases. It’s not a good idea to use a rewards credit card for big purchases, even if you have the money to pay your full balance when the bill comes. This is because it may take some time to earn enough cashback rewards to recoup the interest you’ll be charged on that purchase.
By keeping these tips in mind, you can ensure your cashback rewards credit card is helping you maximize the benefits of your everyday spending. With some planning and forethought, you can take full advantage of all that extra cash!
