The points and miles that we get from credit cards are excellent to book travel, however cash-back rewards are the most valuable when it comes to flex rewards that increase your bank account’s bottom line.
Cash-back is among of the easiest kinds of rewards you can be able to earn as well as redeem, it’s likely that you’ll seldom be able to hear someone complain about not enough cash-back within their account for rewards. You’ll always find ways to use cash-back rewards.
Although earning and redeeming points is easy however, there are a lot of variations between cash-back credit card (just like cards that earn miles or points). It requires some time to research how to find a way to match your main spending categories with the card that offers the highest cash-back on these purchases.
Furthermore, knowing when you’ll be able to earn cash-back rewards is crucial to determine how you can maximize the cash.
What is the Cash-Back Credit Card? Are They Effective?
Cash-back credit cards come with simple redemption and rewards structures. Spend money with your card and earn an amount of or purchase with cash-back.
Certain categories of purchases have higher cash-back rates than other categories. For instance, with one cash-back credit card, you may get 5% cashback on office supplies as well as 3% cash back on gas, and percent on other purchases.
In addition, the amounts and categories can be completely different, therefore, choosing a cash-back credit card that is rewarded for your most lucrative spending categories is essential. There may also be limitations on the amount of cash back you are able to earn in any given category.
Some cash-back credit cards come with incentives for introductory purchases, like $150 cash-back when you spend $1,000 within the first three months following approval of the card. The bonuses are subject to change and are unique to each card, however they are a factor to consider when choosing your Cash-back card.
Furthermore, the way you receive the cash-back you earn can vary. Earn points that you can redeem to receive cash-back. You can also get your cash-back in the form of an account credit on your statement or even accumulate cash-back earned in an individual account.
Let’s look at examples of methods of redemption you’ll encounter on various cash-back credit cards:
Cash-Back earned as points
Certain credit cards that offer cash-backlike that of the Chase Freedom Unlimited(r) card give cash back that is transferable to Ultimate Rewards points.
Cash-Back is automatically applied as a Statement Credit
Cash-back credit cards like that of the American Express Blue Business Cash(tm) Card instantly add the cash-back they earn as a credit on your statement. The card credit the cash back 2 times following the time it was earned. However, other cash-back credit cards might have a different period of time. There is no chance for accumulation and there is no manually redeemed process.
Cash-Back accumulated in an account
Credit cards that offer cash-back, such as Discover it(r) Cash Back Card. Discover it(r) Credit Back Card allow the cash-back you’ve earned to be deposited into your account. This means you can apply for it when you’re at your best.
Which is more lucrative: Cash-Back or Miles/Points?
Do you think earning cash-back is more rewarding than earning miles or points? This is a difficult question to be addressed, as the reward that’s the most important to you is the one you are able to utilize to achieve your goals.
If you’re looking to travel the points and miles program can help you get where you want to go with hotel stays and award tickets and offset purchases related to travel. Cash-back offers a lot of flexibility but you’ll need a plan that will allow you to accumulate the money and use it in a way that is appropriate to your travel plans.
If, for instance, you plan to apply the cash-back rewards to fund the cost of a family Disney trip, you might decide to buy Disney gift cards or restaurant gift cards or gas cards along with every cash-back payout.
This technique is particularly effective when you’re using cash-back credit cards that makes the money an automatic statement credit.
But be aware that cash-back gains might have a set value and points or miles could be given to hotel or airline partners and utilized to create new value. Cash-back, on the other hand, is highly liquid, however it could be difficult to sell points or miles to get precisely what you need when you need it.