Combining Cash Back Rewards Cards
It can be a good idea to combine multiple cash back credit cards and use them for different spending categories. You might have one card that earns cash back rewards on travel and one that earns cash back on groceries, for example.
I think its really helpful to have what I call a when in doubt card, Nijhawan says. This is the card that has the highest cash back rate on all other purchases. And that way, if your spending doesnt fit into a specific higher earning category on your card, you can still rest assured that your spending is still earning the highest rewards possible.
The best way to maximize your rewards would be to make sure the card youre signing up for offers a rewards program that matches your spending behavior and your lifestyle while complementing the other cards you have in your wallet. For example, you wouldnt want to have three cash back cards with dining-focused rewards structures if you never eat out. Make sure you use cards that will actually reward you for your everyday spending.
Many rewards credit cards come with an annual fee, which is important to factor in when you calculate the value of the rewards youll earn in a year. If you expect to earn $30 per month in rewards, for instance, be sure to subtract the annual fee from your yearly projection. Some annual fee cards may offer additional benefits or a high sign-up bonus that offset the cost, but there are also many cards that offer great rewards and perks with no annual fee.
How To Redeem Cash Back Rewards
So, how do you go about redeeming cash back rewards once youve earned it? The actual process depends on the rules of the individual cash back card that you hold.
The most common ways to redeem your cash back rewards are by requesting a statement credit to offset your current balance or by having the funds distributed to you by direct deposits into a linked bank account or paid out via check or PayPal.
Some cash back cardholders also redeem their rewards by transferring the credits into the issuers flexible rewards program to use for travel. This can often be one of the most lucrative ways to redeem cash back, as many issuers offer greater redemption rates when you redeem this way. Some cards also require you to accrue a minimum amount of cash back in order to cash you out.
When youre exploring all of the current best cash back card options, youll want to make sure that you pick a card that rewards you for the type of spending youre already doing. With a rotating card, consider whether youll be able to optimize bonus category spending and stay on top of activating each quarter.
Signing Up For A Credit Card
Recommended Reading: Should I Pay My Credit Card Balance In Full
You May Have To Pay Additional Upfront Fees
Along with interest payments, credit card cash advances often include additional upfront fees. These cash advances fees are either charged as a flat-rate or are calculated as a percentage of the amount of money withdrawn .
For example, if a card issuer charges 1% of the withdrawn amount with a minimum fee of $3.50 and a maximum of $10 and you withdraw $500, youâd pay $5 just for the convenience of accessing the money.
You may also be hit with other minor withdrawal fees such as in the case you use an ATM that is not associated with your bank or card issuer or get a cash advance outside of the country. Fee amounts and structures do vary from one financial institution to the other, so make sure to read the terms and conditions of your card agreement or check with your card issuerâs customer service team.
Using A Balance Transfer Check To Add Cash To Your Checking Account
You also may be able to use your credit card to do a balance transfer with a balance transfer check. Generally, this involves moving debt from another creditor to your credit card, which could be a money-saving move if your card has a lower interest rate than the other debt.
But you may also be able to transfer a balance into a qualifying checking account, effectively using your credit card to get cash.
As with a cash advance, there may be a balance transfer fee, which often ranges from 3% to 5% of the amount you transfer, with a $5 or $10 minimum. Your card may also have a different balance transfer APR than your purchase APR, and balance transfer balances may start to accrue interest right away.
It could take several days for the cash to appear in your checking account, so this isnt necessarily a way to get cash in an emergency. But your cards balance transfer APR may be lower than its cash advance APR, which might make this a better option. Also, your balance transfer limit could be up to your cards credit limit, while cash advances often have a lower limit.
Don’t Miss: How Do I Check My Cabela’s Credit Card Balance
Heres How Cash Back Works On Credit Cards:
- Cash back with every purchase: The average cash rewards card offers about 1% back on all purchases. Some cards offer more cash back in certain spending categories.
- Chances for extra cash back: Many cash back credit cards offer initial rewards bonuses for spending a certain amount within the first few months your account is open. Some cards also have bonuses for referring a friend or meeting an annual spending threshold.
- Redeeming your cash: Cash rewards can usually be redeemed for a statement credit, check or direct deposit. You may also be able to redeem for a bank account deposit and set up automatic redemption.
- Restrictions: Some credit card companies make you earn a minimum amount of cash back before you can redeem.
- Cash back expiration: Sometimes, credit card cash back will expire a certain number of months after you earn it or after your card has been inactive for a certain period of time. Usually, it wont expire as long as your card stays open.
- Rewards devaluation: Unlike points and miles, whose value is set by the card issuer, cash back cant be devalued.
- Fees. Most cash back credit cards have no annual fee. Many have no foreign transaction fee. Some charge both types of fees, however.
Ultimately, you can check our editors latest picks for the best cash back cards on the market to weigh your options.
Heres what decides how long a credit card refund takes:
How To Choose A Cash
What things should you look for when youre comparing credit cards that offer cash back? Here are some factors to consider:
- Earning rates: How much cash back will you earn? Is it consistent across all purchases, or does the card restrict the best rates to specific types of purchases? Since cash back, by definition, provides you with money to go back in your wallet, there isnt any way to truly maximize the points or miles you earn. Instead, be sure to evaluate the exact earning rates compared to your typical spending patterns.
- Ease of redemption: Not all cash-back cards are created equally when it comes to actually getting the cash in your hands or bank account. Some post earnings automatically to your statement, while others earn you points/miles that can then be redeemed for cash back or for statement credits to offset specific purchases. Be sure to carefully read the terms and conditions of the issuer program, so you know how youll actually get the funds.
- Additional perks: A third factor involves the additional card perks and features. Does it incur foreign transaction fees? What about coverage and added protection for your purchases or trips? These benefits can add significant value to a card.
- Annual fee: A final aspect to consider is any possible annual fee. Some cash-back cards dont charge an annual fee, but others do. Its critical to crunch the numbers to see if the cards earning rates offset the annual fee.
Also Check: Cabelas Visa Black Card Benefits
How Do I Use And Redeem Cash Back Rewards
To redeem your cash back rewards or points, you usually have a few options:
- Statement credit the cash back you earn will be credited to your account as a statement credit, reducing your next credit card bill.
- Bank account deposit the cash back you earn will be deposited into your bank account as cash.
- Gift cards you can redeem your cash back or points as gift cards to a variety of merchants. The exact selection will depend on your specific credit card issuers rewards program.
- Travel and experiences some issuer rewards programs let you use your points to book travel and experiences directly through their own portal. Others may let you transfer your points to the rewards programs of partner airlines or hotel chains.
While redemption options vary by issuer, here are the general steps you should follow to redeem your rewards:
% Cash Back On Groceries And Automatic Payments
That said, you can calculate if the card is worth your time. If you plug in a $2,000 monthly credit card spend, the calculator estimates that you get over $500 cash back in one year. Canadians who have a lot of bills including groceries should definitely consider this card. You earn 4% on these purchases up to a yearly limit of $25,000 CAN. Any extra earns 1% cash back.
By the way, the 4% applies to recurring billing too. Pay your insurance premiums or cell phone bill with your Scotia Momentum Infinite Visa and cash in on the 4% back. Streaming services like Netflix, as well and anything else that you pay automatically each month, become a little less cash intensive.
Also Check: First Premier Bank Gold Card
Compare Credit Card Cash Back Bonus Offers
Many card issuers offer a cash back credit card new cardmember bonus. For cards that offer cash back rewards, these bonuses may take the form of a statement credit or a prepaid debit card. For points based rewards cards, you’ll generally receive points instead. Note that bonus offers typically require you to spend a certain amount within a few months of opening the card.
Are Cash Advances A Bad Idea
Many personal finance experts caution that cash advances from your credit card can be a bad idea and suggest to only use them in an emergency situation. Cash advances from your credit card can be a really expensive short-term loan as the current average interest rate for cash advances is 23.7%, according to CreditCards.com.
Notably, credit reports do not indicate when a cash advance is taken against a credit card account so cash advances do not directly affect your .
You May Like: Website To Pay Best Buy Credit Card
Can You Get Cash Back With A Credit Card Without A Pin
You can use your credit card for cash back without a PIN if you head into a bank branch and complete the transaction with a teller. Note that you’ll need the card as well as a government issued ID in order to do this and, as mentioned above, there could be a fee associated with making your request through a person rather than an ATM.
To use an ATM for a cash advance, you will need a PIN. You’ll save yourself a potential fee for going through a person, but you could still be on the hook for the other fees mentioned above.
Citi Custom Cash Card: Best For Flexibility
Sign-up bonus: Earn $200 cash back after spending $750 on purchases within the first three months of account opening.
Cash back rate: Earn 5% cash back on your top eligible spend category up to $500 spent each billing cycle , and 1% unlimited cash back on all other purchases.
Annual fee: $0
Why we chose it:As the name suggests, this card is meant to be customized to fit your lifestyle. You can pick from 10 categories each billing cycle, such as gym memberships and home improvement stores.
If you maximize the cash-back earnings each billing cycle, you could earn up to $300 in cash-back rewards each year. This is a pretty great offering for those who want to maximize their everyday purchases but have a hard time fitting their budget into defined bonus categories by other cards.
Recommended Reading: Bestbuy Credit Card Benefits
How Do I Earn Cash Back
You can earn cash back rewards by using your credit card to make purchases, with many card issuers offering different rates of return depending on the category of your purchase . Credit card issuers and banks sometimes offer opportunities for earning cash back rewards in cycles or promotions. While most cash back credit cards offer at least 1% cash back on all purchases, there may be a greater earning potential in purchases of specific categories such as travel, department stores, grocery and dining. For instance, you might get an alert to activate your cash back redemption cycle for 5% of cash on groceries or department store purchases, which were previously only 3%. In other cases, you might have opportunities to earn 1-5% cash on all categories.
How Cash Back Credit Cards Reward Your Spending
Spending can get rewarded in a few different ways:
- With flat rewards, your card activity gets rewarded by the same percentage each purchase. Using flat-rate rewards cards is easy, but the rewards percentage may be lower than what you would earn with a category-specific card.
- In fixed categories. Fixed-category rewards cards offer cash back on spending in pre-defined categories like travel, groceries or entertainment. Reward amounts can be higher than with flat-rate rewards cards, but it’s up to the card issuer to define the categories and decide which merchants are included.
- Within rotating categories. Some category-specific cards offer extra-generous rewards in particular categories for a short amount of time: typically monthly or quarterly. Sometimes the rotating category is for spending within a broad category like electronics, while in other cases it can apply to spending with a specific retailer.
You May Like: Best Buy Credit Card App
What Are Cash Back Rewards And How Do They Work
Cash back rewards are a type of reward points based on a percentage of purchases with your credit card in select categories, such as dining, department stores, grocery and travel. Typically, credit cards with this feature award cash back at a value of 1 cent. Cash back rewards can be redeemed for credit card statement credit, for purchases through participating online retailers at checkout, for gift cards or discounts on services or travel.
Us Bank Cash+ Visa Signature Card Nerdwallet Exclusive Offer
Our pick for: Customizable cash back wide selection of categories
If you don’t mind putting some work into your rewards, check out the U.S. Bank Cash+ Visa Signature® Card NerdWallet Exclusive Offer. It might be the most customizable cash back card available. You pick which categories earn the most cash back you get two 5% categories and a 2% category and you can change those options every quarter. There’s a good bonus offer for new cardholders, too. Read our review.
Recommended Reading: Who Pulls Transunion Only
Rewards And Cash At The Register Are Two Very Different Options
Cash-back credit cards are one of the most popular types of credit cards. With each swipe, you have the opportunity to get money back on your purchases. Not to be confused with cash back on a debit cardwhich you can get at the register when you’re checking outcash-back credit card rewards accumulate until you opt to redeem them.
Understanding the difference between cash-back rewards and cash back at a store makes a big difference when you’re choosing which way to pay. Unless you need physical cash, using your rewards credit card is the best option for most purchases.