The modern American has access to a galaxy of credit cards. However, not all credit was created equal. Depending on promotional offers, interest rates, and of course, (check the title) CASH BACK OPPORTUNITIES, you can increase your chances of thriving with your credit use. The name of the game is saving money or being rewarded for your purchases.
The more you shop around and mix and match, you’ll find cards that offer you rewards in many different ways. As long as you have a good credit score (which you can build through responsible credit card use), and make sure to pay your cards on time, you won’t be penalized for spending, and will actively be rewarded.
On this list, we’ll look at 15 distinct ways that you can take advantage of cash back credit cards to save money and improve your life. Let’s dive in:
1) Credit Cards With Cash Back on Dining
Do you love to eat out? If so, you might have realized it’s one of the most expensive aspects of your spending and social life. However, many cash back credit cards are specifically targeted towards helping you take advantage of your restaurant addiction.
Certain cards will give you extra cash back points when they’re used at restaurants. You’ll also sometimes be able to access deals on specific high-end restaurants or get exclusive discounts at partnered chains.
Using cash back cards is a unique choice that should reflect your lifestyle and most frequent purchases. So if restaurants are that for you, cards that prioritize them would make an excellent choice for you.
2) Use Cash Back Credit Cards for Every Purchase Possible
Many cash back credit cards give you cash back on every purchase you make. A typical system is giving you a point for every dollar you spend. Once you hit 100 points, you get $1 cash back. Different cards have different rates for cash back. These can depend on how much you pay to use a card. You can also get more cash back for spending on certain activities, like dining out or travel.
To truly get the most out of a cash back card, you need to use it for every purchase you possibly can. Anytime you don’t use it, you’ll miss getting cash back. If you know you can pay back all the purchases you make during a monthly credit period on time, you won’t have to pay interest, so you’ll make money on the purchases you would have to make either way.
3) Credit Cards With Sign-Up Bonuses
This form of cash back is in some ways more direct than the points system. Many cards offer an introductory deal where if you spend a certain amount of money in a predetermined amount of time, you get a cash bonus. If you were going to spend that much during that time, it’s free money!
If you weren’t going to spend that much, by making an expensive purchase or two, you might be able to clear the threshold. These offers often give you some months at 0% interest to pay back this initial push towards the bonus. Also, if you use the card as much as possible, you can save up all of your earnings during that time.
These cards also often offer you extra points or cash back if you refer friends and they get the card, or if you get cards in their name. Generally, they need only to make one purchase with a card you got for them to give you significant bonus points or cash back.
4) Credit Cards With Cash Back on Supermarket Spending
Groceries are essential to a household, now more than ever. If you’ve noticed rising prices at the grocery store, you’re not alone. One way you can mitigate these costs is with a credit card that specifically rewards you for grocery purchases. Some cards even offer as much as 6% cash back on up to $6,000 in purchases at supermarkets, which is nothing to sneeze at.
Some cards offer discounts on specific store purchases. For example, the Target RedCard gives 5-10% off of purchases made at Target, depending on whether you order online and sign up for home delivery or not.
There are many other cards that offer specific deals for different grocery chains, or grocery shopping in general.
5) Credit Cards With Cash Back on Gas Station Spending
If you’re constantly driving for work or pleasure, a credit card with gas rewards might be a great option. If you search you can find cards that reward you not only for gas but for other purchases as well.
Experts suggest that any gas credit card you get should offer you:
- At least 3% back on any dollar spent at gas stations.
- Avoid cards that partner with a specific chain of gas stations.
- Using one of these cards if you’re driving for Uber, Lyft, or another rideshare app.
6) General Cash Back Cards
Cash Back credit cards are always in flux. Month to month and year to year, the benefits change as corporations compete to attract new customers. Their infighting is great for you!
Cash Back is the most flexible of any credit card rewards, because it can be used on anything. Depending on the card you choose you might be able to get 1-6% cash back on each purchase you make.
These cards generally come in three distinct forms: flat-rate cards, tiered cards, and bonus cards. Flat-rate cards give you the same rate back on anything you purchase. Bonus cards pay more in specific categories that change, and 1% on everything else. Tiered cards pay more for some set types of purchases, and 1% on any other form of spending.
7) Cash Back When You Pay Your Credit Balance
Some cards incentivize paying back your balance on time. The standard way of doing this is charging extremely high interest if you don’t, but one card rewards you for being punctual with your payments.
The Citi Double Cash card has no annual fee. It gives you 1% back in a month in which you make the purchase. But then it also gives you another 1% back when you make a payment.
8) Credit Cards That Allow You To Pick Cash Back Categories
While some cards reward all purchases with cash back, and others reward purchases from revolving or static categories, there’s a third option. Some cards allow customers to choose what categories they want to be specifically rewarded in.
You might choose from a list that includes options like:
- Cell Phone bills
- Fast Food
- Drug stores
- Department Stores
- Online Purchases
- Among many other options
You’ll often have to choose one or two of the available categories. Two options for you to choose from in this brand of credit card are AMEX SimplyCash and US Bank Cash+.
Analyze your spending habits carefully and choose the area you do the most damage in to best reward yourself.
9) Cash Back on Costco Purchases
Do you use Costco regularly for gas and groceries? If so, there are credit card options that will reward Costco purchases. You already save significantly at Costco, but these bonuses can further enhance that.
Depending on who you are and what you’re buying at Costco for, you might opt for the Costco Anywhere Visa® Card by Citi, or the Costco Anywhere Visa® Business Card by Citi.
Rewards include 4% off on Costco gas purchases for the first $7,000 spent in a year, and then 1% after that. You can get 3% back on restaurants and eligible travel. Of course, you’ll enjoy 2% back on purchases from Costco and Costco.com, and you can also expect 1% back on all other purchases.
10) Changing Category Cash Back Points
If you like variety, some cards offer a revolving carousel of categories you get bonus cash back on. This variety and breadth of reward options can be intoxicating. You’re not confined to having one credit card, but having one with changing rewards can add diverse value to one card. Compared to some of the more stringent, static reward terms of other cards, this can provide unique benefits.
With cards like this, you’ll often have choices each month that you can take advantage of. Keeping an eye out for these changing rewards can be like shopping, but for savings and cash back.
11) 0% APR on Big Purchases
While not exactly cash back, this can save you cash in the long run. More and more credit cards are offering introductory 0% APR rates. Sometimes these 0% rates will last for 12-18 months. Let’s say there’s a big purchase you need to make, but wouldn’t be able to pay off with interest, or in a one-month credit period. However, you know that if you had a year to 18 months with no interest, you could probably swing it.
If this fits the criteria of a purchase you need to make, by opening a card with a 0% APR intro rate, you can complete a big buy and give yourself a long time to pay it off with no interest. Just make sure you:
- A) Budget out how you’ll pay it back in time to avoid usurious interest rates that often follow 0% APR periods and:
- B) Don’t start using this card for all of your month-to-month purchases. The combination may be too much for you to keep up with and pay off the big purchase in time.
Essentially if you can make a plan and stick to it with a 0% APR intro rate on a credit card you can make purchases you wouldn’t be able to otherwise.
12) Earn Free Travel or Hotel Stays
Some cards give you an excessive amount of cash back to use on travel or hotel stays. Let’s say you earned a certain number of points. If you were to redeem those points for cash back, you wouldn’t get as much as you would if you redeemed them on partnered hotels or airlines. Some cards don’t care if you use a partner at all, and will give you bonus money towards travel or hotel stays more generally.
Vacations or trips can be prohibitively expensive, aren’t always factored into annual budgets, and can occur somewhat spontaneously (think weddings, births, and family emergencies). By having a card racking up points you plan to put towards air travel or accommodations once you get where you’re going, you can have an insurance plan to pay for unforeseen or upcoming trips.
13) Use 0% Intro APR and Cash Back to Pay Off High Interest Debt
One particularly crafty way to use cash back credit cards, especially those with 0% intro APR rates, is to pay off high-interest debt. If you’ve fallen behind on payments to a high-interest credit card, student loan debt, or any other form of debt that’s accruing high interest, this is a great tactic to consolidate debt on a card with no interest. In some cases you might be able to get cash back from payments you make on debt you’re accruing.
By consulting friends, family, or professionals that are experts (or just more experienced) in finance or accounting than you are you can make a plan to save money and get your head above water.
14) Create an Emergency Fund
By leaving your cash back rewards alone for an extended period, you can create an emergency fund to be used when necessary. For some people, it’s easy to leave cash back rewards alone to accrue over time.
You never know when you’ll need significant cash for an unexpected expense, like fixing a car, getting medical treatment, or meeting your basic needs if you lose your job. If you start saving up your cash back rewards today, you’ll be one step closer towards having an emergency fund that can mitigate disaster whenever it strikes.
15) Start Saving Towards Your Future
Many cash cack credit cards offer points that don’t expire. Make sure any card you’re considering using for this purpose don’t have an expiration or the deadline on the points is far enough away to make it worth it.
If you can go years without spending the points you accrue on cash back credit cards, you can end up with enough money to make serious purchases. Think about buying a car, making down payments on a mortgage, or paying a significant portion of an expensive celebration like a wedding.
What’s great about this is if you weren’t planning to use your points they’ll silently accrue and eventually surprise you with how much they’ve appreciated.
15 Ways To Use Cash Back Credit Cards to Save Money in Conclusion
These are just some of the ways you can save money with cash back credit cards. By researching and getting creative, there are endless ways you might be able to enhance and improve your life with credit card rewards.
Shop around, compare your options and be responsible. By paying your credit cards on time, you can reap the benefits from them without suffering the high-interest consequences they inflict for any misstep. Do your due diligence and be careful!