How To Maximize Rewards With Cash Back Credit Cards

This is a guest post from Kevin of

Cash back credit cards reward you by paying you a percentage of your spending. This can be a wonderful way to earn rewards on your day-to-day purchases and spending. Even better, with cash back, you can use the money for anything you’d like. The trick to cash back cards, however, is to use them wisely so you can maximize the benefits available to you.. Here are some tips for excelling at earning cash back on your credit cards.

Pick The Best Card For You

Some cards offer a flat percentage of cash back- usually around 1 percent- regardless of the type of purchase. However, plenty of other cards offer additional or bonus cash back in certain categories or if your spending exceeds a certain level. For example, there are cards that offer you bonus cash back for groceries or gas and car repairs. Other cards boost the amount of cash back you earn after you cross a certain spending threshold.

When shopping around for cash back credit cards, make sure you select the one that best matches your spending patterns. If you commute using mass transit, avoid cards that reward gas purchases (gas credit cards actually usually pay out cash back rewards), while if you aren’t a cook and primarily eat out, opt for a card that rewards that behavior instead of giving you a bonus at the grocery store.

When comparing cards, don’t be so swayed by the cash back deal that you forget the other terms of the agreement. If there is an annual fee, make sure the rewards program will allow you to earn more cash than cards that charge no fee for being a customer. If the best cash back card carries a high interest rate, consider whether you will really be able to pay off your card in full each month or whether the additional interest will offset any gain from the rewards.

Charge Everything (But Remember To Pay Off Your Balance in Full Each Month)

The more you put on your card, the more cash back you will earn. See if your monthly bills can be paid via credit card. Most cellular telephone bills can be paid by card, and you may even be able to pay your rent or utility bills using your charge. In fact, some companies will allow you to set up automatic payments right from your card. Any necessary monthly expenses you incur that can go on your card will result in free cash back that you might not otherwise have received.

Likewise, if you go out to dinner with a friend and plan to split the check, put the whole thing on your card and get the cash from your friend. If you have work expenses that are reimbursed, charge those too. Every extra little bit helps when it comes to earning rewards.

It’s very important regardless of what card your using to remember to pay off your balance in full each month! Cash back credit cards only make sense if you aren’t paying interest on the card, which can be avoided by never carrying a balance.

Understand the Rules

Some credit card companies require you to expressly claim your cash back bonus by requesting they send a check. Others will automatically apply the bonus as a statement credit. Make sure you completely understand the rules to your program so you don’t accidentally lose out on cash that is owed to you.

Check Your Statements

While creditors don’t often make mistakes, you’ll want to check your statement each month to make sure you got all the cash back owed to you. This is especially important if you signed up for a card that offered a special cash back promotion for a limited time. If the promotion wasn’t applied to the card correctly, you could miss out on the bonus cash owed to you.

Each month, compare your spending to the amount of cash back you earned to make sure you were paid your dues. After all, you went to all the trouble to choose the right card and charge as much as you can on it, so you want to make sure that effort paid off.

Avoid Fees

Interest charges, late fees or over-the-limit penalties can all negate any value you get from using a cash back card. Strive to pay off your balance in full and on time every month, and make sure you don’t go over your line-of-credit. Not only will practicing this responsible behavior help you maximize your cash back, but it will also protect your credit score so you can qualify for the best credit card deals.