Determining how to maximize cash-back rewards can be a crowning achievement in credit cards. What is essentially “free money” from the credit card companies, knowing the ins and outs of this reward type can ensure you take full advantage of every benefit available. 

It’s also very important to know that using a cash-back credit card involves much more than good spending habits. First and foremost, you must have the right card with the best redemption options for these spending habits. 

Pick the Right Card

The best way to earn big without overspending is to start with picking the right card. Are you someone who dines out regularly? Then, you should choose a card that offers 2-3% on dining and takeout. The same goes for gas, online shopping, or any available categories. 

A few flat-rate cards offer 1-2% cash back on all purchases, with 1.5% being the new standard across many banks. Some cards also include bonuses or rotating quarterly categories that change, so you can earn more without spending with these. 

The best way to earn big is to have a few different cards. Consider opening one card that offers a flat rate on all purchases with another that offers 6% on groceries, so you have the best of both worlds. Suppose you have a 1.5% cash back card and another that offers 6% on groceries. Maximizing your monthly spending would be very easy while earning the maximum amount of money. 

Sign-Up Bonuses

One of the most underappreciated benefits of a cash-back credit card is the sign-up bonus. While these are one-time bonuses, they are also easy ways to earn free cash without spending anything more than what you would traditionally spend. 

Depending on the card you choose, the bonus can run between $200 and $500, with varying levels of spend required. Regardless of the amount, this is basically free money to charge and buy things you would get anyway. 

Take Advantage of Shopping Portals

One of the most understated ways to earn more while shopping is to use one of the multiple shopping portals available through a credit card company. If you go through one of these portals, you may find an additional percentage back on any items you purchase from a retailer using your linked credit card from the same bank. 

For example, many banks offer anywhere between 1-10% cash back when shopping at places like Amazon, Walmart, Target, Dick’s Sporting Goods, and so many other favorite retailers. In other words, you earn two cash-back rewards simultaneously, which feels like a great way to earn big without overspending.  

Cash Back Apps

As with the shopping portals banks use, you can also look at cash-back programs from Ibotta, Dosh, and Rakuten to earn even more cash-back rewards. This ensures you not only earn any of the cash-back rewards you get automatically with your credit card, but you can also earn extra cash on top of the credit card. 

Rakuten offers additional bonuses if you shop at locations like Old Navy, Nordstrom, Macy’s, and Kohl’s. The bottom line is it’s not impossible to earn upwards of $50-$100 per month using these apps if you shop regularly at these places, within your budget of course.

Careful Budgeting

Even with all of the different perks and opportunities to earn big with cash back, there is still one major component you need to consider. The biggest thing is to make sure you are staying within a budget and not trying to overspend to take advantage of rewards. 

This could be challenging if you have a cash-back card with rotating categories. For example, if you receive 5% cash back for shopping at Amazon over three months, you might be tempted to do some extra shopping to maximize cash back. 

At the end of the day, it’s up to you to be careful about your spending and staying within your means. The lesson here is not to overspend just because you will earn extra cashback, as you will spend far more than you will receive cash-back from the credit card company. 

 

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.