The right credit card can help you save a lot of money. Not only do some issuers offer 0% intro APR and competitive rates after the promo period, but you can also receive cashback on every purchase.

People who carefully review their budgets may benefit the most from cash back credit cards, as they make everything more affordable. These cards have a few advantages over credit cards that offer rewards points that will be appealing to budget-conscious shoppers.

Receive Cash Back Without Worrying About Point Conversions

When you use a cash back credit card, you know how much you will earn each time. If you receive 1% cashback on a $100 purchase, then you know that you will receive $1. 

While this sounds like a simple concept, it’s more complex for rewards points. For instance, if you receive 1 point for every dollar you spend, you’ll end up with 100 reward points if you spend $100. That’s straightforward, but it can get confusing from there.

Some card issuers devalue points if they are used for cash, Amazon purchases, or other transactions. While you can typically convert 100 points into $1 if you’re using it for travel expenses, you may only receive $0.80 if you use 100 points for an Amazon order.

Cash back credit cards are more straightforward, making it easier to calculate how each purchase will impact your budget and cash back rewards.

You Aren’t Incentivized to Make Unnecessary Purchases

Travel rewards credit cards can incentivize you to make unnecessary purchases. For instance, a traveler may want to use their accumulated points to cover a hotel stay and airplane tickets. However, the same traveler may not have enough points for the return flight. They may also spend more money than usual during the trip, especially if they vacation in a tourist trap.

Cash back credit cards don’t come with that possible incentive. Instead, you can use a cash back credit card to immediately reduce your credit card debt. Issuers give you other options, such as turning the cash back into a gift card.

When people use cash back credit cards, they want to save. Meanwhile, people who use travel rewards credit cards want to travel, and if given enough points, they’ll use credit to make up the difference on their next getaway.

Simplify Your Shopping With Unlimited 2% Cash Back

Credit card rewards programs can get complex, but you can also keep things simple with a credit card that offers unlimited 2% cashback on all purchases. It’s good to compare several options, but you can choose from several cards that offer this advantage.

Unlimited 2% cash back is the equivalent of receiving a 2% discount on every purchase moving forward. Those savings add up and give budget-conscious consumers more financial flexibility. 

Keeping all of your debts limited to one credit card also helps you pay them off. You don’t have to risk forgetting about one of your balances and accruing additional interest. 

Potentially Earn Higher Cash Back with Multiple Credit Cards

Budget-conscious consumers who want to maximize their savings and have no problem taking the more complex route can open multiple cash back credit cards. Some credit cards offer elevated cash back for specific spending categories. It’s not hard to find cards that offer 3%-5% cash back for certain categories. 

Those elevated cash back rewards usually have quarterly spending limits. Once you reach the spending limit, you only end up with 1% cash back for those purchases until the end of the quarter. 

Instead of accepting the lower 1% cash back after maximizing the elevated rewards, some consumers will use a different credit card that offers elevated cash back for the same category. Others know which card to use for which purchase to maximize the average cash back percentage they receive for each purchase.

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