Cashback credit cards can be a great tool for building savings, offering rewards for everyday purchases. By using them strategically, you can earn cash that helps you save more without changing your spending habits.
Here are six effective strategies to maximize your earnings with cashback cards.
1. Choose the Right Cashback Card for Your Spending Habits
Not all cashback cards are created equal, and choosing one that aligns with your spending habits is important. For example, some cards offer higher cashback rates on groceries, while others focus on gas, dining, or travel purchases.
By selecting a card that rewards the categories where you spend the most, you can maximize the amount of cashback you earn each month.
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2. Maximize Categories with Rotating Bonus Offers
Many cashback cards offer rotating categories with higher rewards each quarter. These could include categories like online shopping, dining, or entertainment.
To maximize your savings, activate these rotating bonus categories and use your card strategically during the promotion periods. While it takes a bit of planning, you can earn significant cash back by taking advantage of these offers.
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3. Combine Cashback with Store Discounts
Pairing your cashback card with store discounts or loyalty programs is one way to get even more value from it.
For instance, many retailers offer exclusive discounts when you pay with a specific card, or you may be able to stack cashback with sales or promotional offers. By combining cashback with other savings, you can multiply your rewards and get more out of every purchase.
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4. Pay Your Balance in Full Each Month
To truly benefit from a cashback card, paying off your balance in full each month is important. Otherwise, the interest rates on your card can quickly negate any cashback rewards you’ve earned.
By avoiding interest charges, you can ensure that all your cashback goes straight into your savings.
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5. Use Cashback to Fund an Emergency Savings Fund
One of the best ways to use your cashback is by putting it toward your emergency savings fund. Treating cashback rewards like a bonus deposit allows you to build your savings passively without cutting into your regular budget.
Over time, small cashback rewards can add up and provide a solid foundation for your emergency savings.
Pro Tip: Earn as much as possible on your emergency savings. For example, SoFi Checking is offering 4% interest, plus a potential $300 signup bonus. (May change without notice.)
6. Take Advantage of Signup Bonuses
Many cashback cards offer substantial signup bonuses for new cardholders. These bonuses can be a great way to boost your savings immediately. Check for these offers and ensure you meet the spending requirements to earn the bonus.
Once you’ve hit the minimum spending, the bonus should be credited to your account, giving your savings a nice boost.
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Make the Most of Your Cashback
By following these six strategies, you can turn your cashback credit card into a powerful tool for building savings. From choosing the right card to maximizing rewards and pairing them with other discounts, there are many ways to get the most out of your purchases.
Remember to always pay your balance in full to avoid interest charges, and consider using your cashback for long-term savings goals, like building an emergency fund. With a little planning, you’ll be on your way to boosting your savings easily.
