With the downward economy, getting the most out of your purchases is imperative. That means using credit cards and other cashback methods. There are different ways to put extra cash in your pocket. Here’s a guide to optimizing all your purchases.
Before you look for a cashback credit card, evaluate your spending. Where does your money go?
If you mainly want a card for groceries and gas, you want a credit card that has rewards that benefit from those expenditures. At the same time, if you’re going to travel, you’ll want a card that rewards you with travel points. To maximize your benefits, it's crucial to understand how to earn rewards effectively and align your card choices with your spending habits.
Once you’ve analyzed your day-to-day spending, you can develop a credit card spending strategy. You’ll then be able to choose and apply for the best credit card for your needs.
For everyday spending you should consider a flat-rate credit card. This will usually give you one to two percent cashback on all purchases. The best ones offer 1.5 to two percent.
A rotating or bonus category credit card pays you different levels of points. You may earn five percent for travel but one percent for groceries. Remembering these bonus categories and using multiple cards can help you maximize your cash-back earnings by taking advantage of different rewards rates associated with these categories.
If you don’t like to keep track of all the categories and bonuses a credit card can offer, the flat-rate card is for you.
Flat-rate rewards cards simplify your strategy. They provide one consistent cashback rate for all purchases. It doesn’t matter what the purchase is, you receive the same rewards. However, if you want to maximize cash back, consider using different cards for specific spending categories.
If you like keeping a record of all your different points and bonuses, a rotating bonus categories card might be for you. You’ll need to pay close attention to the card issuer for updates on rewards structures.
Both flat-rate and rotating rewards credit cards are beneficial. If you have the choice, you may want to apply for both types of cards.
It’s a better way of maximizing cash and optimizing your cashback. You have the best of both worlds. This is especially true if you’re a traveler.
You’ll still need to track rotating rewards, but the lucrative rewards will offset this. Shop around for a flat-rate card that gives you the best everyday rewards.
It’s important to compare rewards, but welcome offers often have lucrative rewards. Finding a card with a sign-up bonus can accelerate your earnings. Additionally, many cards allow you to earn cash back on everyday expenses like dining, gas, and groceries.
Wells Fargo Active Cash Card is an example of a card with a cash bonus. With the Wells card, if you spend $500 on purchases within three months of opening the account, you receive $200.
It’s not hard to spend the $500; just charge all your groceries, pay it off each month, and you’ll probably have it.
You can optimize your spending by choosing a card with a healthy sign-up bonus.
It’s important to pay your balance off every month to take advantage of all those points you’re earning. If you don’t, the value of your rewards will be eaten away by the interest you’re paying on the card. Additionally, be mindful of the annual fee associated with your card, as it can impact whether the benefits outweigh the costs.
So only charge what you can afford.
To optimize your spending, think before you shop. Look for credit card-linked offers from your issuer.
Most credit card companies have portals that will take you to your favorite retailer. You go on the portal and click the retailer you want. You’ll earn more rewards than if you were to go directly to the retailer. Additionally, you can accumulate reward dollars, which can be redeemed as a statement credit or used for purchases on platforms like Amazon.com.
Most credit card companies have hundreds of your favorite retailers. For example, Chase Freedom Flex or Chase Freedom Unlimited’s portal has retail options like:
Different cards have different portals with various retailers available.
Some credit cards like Capital One QuicksilverOne Cash Rewards Credit Card will let you earn more cashback with specific retailers. They’re not always available, but it’s worth it to periodically go to the portal to see what deals and rewards are being offered.
That allows you to optimize your spending.
You’ll be earning cashback from your credit card, but at the same time, you can earn cashback from apps. There are many apps to choose from. Sign up for one or all to take advantage of even more cashback. Here are several available.
Additionally, choosing the right rewards program that aligns with your spending habits can further enhance the value you receive from your credit card.
Rakuten is an app that partners with over 3,500 stores. You'll be paid cashback for shopping with one of them. To use Rakuten, simply download the browser extension or the app.
You’ll need to go through Rakuten to reach your favorite retailer, but the cash is worth it.
Rakuten will pay you cashback via PayPal or check. While at the same time, you’ll receive the points from the credit card you used. Cha-ching, that’s optimization at its best.
Ibotta lets you earn cashback at grocery stores. While you’re using your credit card to earn those points, you can be earning cashback from Ibotta.
Simply check the app for the Ibotta offer list and head to the store. Once you’ve shopped for the items on your list, submit a receipt to earn your cashback.
You can withdraw your earnings when you reach $20. You can choose a gift card or link Ibotta with your bank account.
The Dosh app lets you link your cards. When you swipe the card, you'll receive cashback in your wallet. When you accumulate $15, Dosh will transfer via:
You can use Dosh to purchase groceries, dining, or other miscellaneous items. You'll also have the credit card rewards accumulating for your credit card.
Redeeming your cash back rewards is an essential step in maximizing the benefits of your rewards credit card. There are several ways to redeem your cash back rewards, and the best option for you will depend on your individual financial goals and preferences.
One popular way to redeem cash back rewards is to use them as statement credits. This involves applying the cash back rewards directly to your credit card balance, which can help reduce the amount you owe and save you money on interest charges. Many credit card issuers also offer the option to redeem cash back rewards for gift cards, which can be used to make purchases at your favorite retailers.
For example, if you have a cash back credit card that offers 2% cash back on all purchases, you can redeem your rewards as a statement credit to offset the cost of your everyday expenses. Alternatively, you can redeem your rewards for a gift card to use on a specific purchase, such as a new TV or a weekend getaway.
Another way to redeem cash back rewards is to use them to pay down debt. If you have high-interest debt, such as credit card debt or personal loans, you can use your cash back rewards to make a payment towards your debt. This can help reduce the amount you owe and save you money on interest charges over time.
For example, if you have a cash back credit card that offers 1.5% cash back on all purchases, you can redeem your rewards to make a payment towards your credit card debt. This can help reduce the amount you owe and save you money on interest charges over time.
It’s also worth noting that some credit card issuers offer the option to redeem cash back rewards for a check or direct deposit into your bank account. This can be a good option if you want to use your rewards to pay off debt or save for a specific goal.
Overall, redeeming your cash back rewards is an important step in maximizing the benefits of your rewards credit card. By understanding your options and choosing the best redemption method for your individual financial goals and preferences, you can make the most of your rewards and save money over time.
Strategize how you use your credit cards. Put everything, including utilities, on them so you can earn fabulous cashback. Ensure you pay them off monthly. To double dip with cashback, take advantage of cashback apps.
