Top 3 Tips to Maximize Your Cash Back Credit Card Benefits

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Credit cardsLearn the best way to use cash back credit cards to maximize your rewards.

Cash back credit cards are becoming more and more popular. This is not surprising since these cards provide more perks compared to your regular credit cards. Here are some of the benefits that you can get by using these cards.

  • Flexibility. Cash back cards are flexible. They allow you to use your points to pay for everyday purchases. Instead of offering you discounts on purchases that you don’t need, you can use your points for things that matter to you.
  • Fixed rate of return. Since most cash back cards offer a fixed rate of return, you know exactly what you are getting by using them. So, if you are using a card that offers a 1% rebate, you are sure that you will get one cent for every dollar spent.
  • No annual fee. There are a lot of cash back cards that do not charge an annual fee. This includes Chase Freedom, Discover It, USAA Cash Rewards American Express Card, and BuyPower Card from Capital One, to name a few.
  • Additional perks. Some cards also offer some nice bonuses such as free FICO credit score on monthly statements, car rental insurance and emergency travel assistance.

To realize a huge rebate on all your spending and save a significant amount of cash in the process, here are some tips you may want to consider when using cash back cards.

  • Know where you spend your money. To help you identify which card is best for you, you take a careful look at your lifestyle and spending habits. This will allow you to choose a cash back card that will give you the maximum rewards for your spending.
  • Plan ahead. Be familiar with the rewards program of your card so you can plan ahead, especially if you are using cards offering rotating categories. You should also be aware of your rewards cap so you can stop using a particular card when you have reached your maximum spend. This is important since after reaching the rewards cap, your purchases will automatically drop to 1% cash back. For example, the Blue Cash Preferred Card from American Express offers 6% cash back on groceries per year but will automatically drop to 1% once you reach the rewards cap.
  • Redeem your rewards for cash. The best way to enjoy the impact of your cash back rewards is to redeem them for cash or statement credits.