Earn More w/ Cash Back Credit Cards

Here's how to earn the most cash back incentives...

Cash back credit cards are growing in popularity - and for good reason - for every purchase you make, a percentage is returned to you, usually on an annual basis. Sounds good, right? Well, how much you benefit all depends on how you use your credit card to make daily purchases.

More About Cash Back

Cash back credit cards were first introduced more than 15 years ago by Discover® Card. These days, almost every credit card issuer has some type of cash back or rebate program. Get anywhere between 1% and 5% cash back - with many different ways to earn incentives.

But cash back programs can be costly - if you're not careful. In most cases, cash back credit cards have higher interest rates than 'standard' credit cards. And how much you benefit is directly related to the type of reward system you use, how you use your card and your personal spending habits. Here's some tips to help you benefit the most from cash back credit cards:

Tips to Earn More Cash

1.) Never Carry a Balance - The most important tip to taking advantage of cashback credit cards is to NEVER carry a balance. The return on a cashback credit card is between 1% and 5% annually and pales in comparison to the amount of interest that will be paid when carrying a balance each month.

2.) Secure the Lowest APR - If you occasionally need to carry a balance, using the lowest APR card can help you save the most on interest charges - allowing you to earn more benefits overall. For more information, read our article about saving with a lower APR credit card...

3.) Buy from Designated Merchants - The typical cashback cards pays 1% on purchases. But many card offers give higher percentage returns when using the card on designated purchases such as gas, groceries or at specific merchants.

4.) Consider Tiered Offers - Tiered offers pay back a higher percentage each time you exceed a specific spending limit and is particularly beneficial if you purchase large ticket items or use your card for business purposes. A typical tiered system pays: 1% on purchases up to $2,500; 2% for between $2,501 and $5,000, etc.

More Resources:

Coming soon...

5.) Take Advantage of Sign-Up Bonuses - Many issuers will offer you a sign-up bonus to apply for their credit card. For example, some credit cards feature a $50 statement credit after you make your first purchase with the card.

6.) Avoid using Special Card Services - To make a cashback credit card payoff, never use the card services offered with the claim to make life easier - balance transfers, cash advances or convenience checks. Interest applied to these offers is typically very high and may include a transaction fee.

The Key to Cash Back

The key to getting a significant cash back reward is to vigilantly pay off your monthly balance and to take advantage of merchants and services that will earn bonus rewards. Be smart with your cash back credit card and you'll be the one who benefits - not the credit card company!

* See our section on Cash Back Credit Cards for a complete list of offers! *