Cashback on credit cards is a great way to save money. It allows you to take advantage of the discounts that come with using your credit card. The best part is that you can get this benefit even if you pay off all your purchases in full every month, which means there’s no risk involved!
However, it is essential to know how cashback works so that you’ll be able to maximize your savings when using this feature on your card.
What is cashback?
A cashback benefit is a reward you get from your credit card for using it. For example, some credit cards offer a cashback program, in which the card issuer pays back a percentage of your purchases.
Often, these programs give you 1% or 2% back on everything you buy with the card. If you spend $100 at Target, for example, the next month (or quarter), when they send out their statement and rewards checks—you’ll get $1-$2 credited to your account because of that purchase!
Cashback on credit card purchases
Cashback is a benefit that comes with a credit card. Cashback is a percentage of your purchase and is given back through rewards points and gift cards. The amount of cashback can vary by card, but most have a range between 1% and 5%.
For example, if you make a $100 purchase, you will get between $1-$5 back on your statement (which will be due at the end of the month). You’ll see this in your statement as “Cash Back,” or sometimes referred to as “Rewards.”
SoFi explains, “The SoFi Credit Card now lets you redeem points straight into crypto. You’ll earn up to 3% cash back credit card on all purchases and can redeem it* directly into crypto with your SoFi active invest account.”
How to get cashback?
- Sign up for a cashback credit card.
- Get a cashback credit card.
- Use your credit card to make purchases.
- Receive cashback on your card.
- Use the cashback to pay off your credit card balance and receive more cashback on your next statement when you fully pay off your balance!
How will you receive cash back?
Cashback is sent to your account. It is the most common way cashback is delivered, but it isn’t the only one. Some credit cards will send you a check instead of processing it as a credit onto your bill. This can be helpful for someone who doesn’t have a bank account.
If you’re concerned about keeping track of all rewards programs and login credentials, don’t worry—plenty of apps are designed to help manage them all in one place!
How to maximize your credit card’s cash back?
Maximizing the cash back on your credit card is an easy way to save money. Here’s how:
- Pay your bill on time. This is obvious, but if you’re not paying attention to your statements, you could be missing out on some cash that’s owed to you!
- Pay off the balance every month in total. Not only will this keep any interest charges from piling up, but it will also increase the amount of cashback benefit applied toward purchases each month.
- Use your card for all purchases. Using multiple cards means having multiple accounts with different interest rates and annual fees—which means more money spent over time! Use only one credit card so those benefits can build up faster than they would otherwise.
Now that you know how to use cashback benefits on credit cards, you can start earning extra money!