Boost your finances with cashback credit cards
Rewards credit cards come with a lot of benefits. The savvy credit card user can use rewards as a way to boost finances in the long run. The key is to make your credit card use a part of your regular budget, and see your rewards card as a financial tool. Cashback credit cards are especially helpful.
Cashback credit cards = free money
You can get free money with a rewards credit card, just by buying the things that you normally purchase. It’s true that you can use rewards cards to earn travel rewards, like Air Miles and hotel stays, too. However, many consumers find that cashback credit cards are the way to go.
While travel credit cards can offer some very attractive rewards, there is nothing quite like cash. Instead of trying to earn enough points to make a big difference, a cashback card provides you with a straight percentage of what you spend.
It’s hard to argue with the universality of cash. And, when you plan your spending around your credit card cashback rewards, you can earn money with regular spending.
Rack up the rewards
Look at your regular spending each month. If you consider how much you spend on groceries, gas, and utilities, you might be surprised at how much you come up with. Just living can provide you with plenty of rewards opportunities.
If you want to rack up your rewards, especially your cashback, use your credit card for all your regular purchases. Whether you are making an online purchase, or going to the grocery store, or paying the cable bill, use your rewards credit card.
If you use a miles or points card, you can earn a large number of points quickly with your regular spending. With a cashback card, though, you could earn free money every month. If you earn 1% cashback on your rewards card, $2,000 in spending each month comes out to $20 per month. That’s $240 in free cash each year. Depending on how much you spend, it’s possible to earn as much as $500 (or more) in a year with cashback rewards.
If you want to put that money to use, put it in a high-interest savings account, or add it to your retirement savings, or pay down some of your other debt. This will help you boost your finances in the future.
Don’t pay interest
This sounds fine in theory, but you have to be really careful about how you proceed. The key to making this work is avoiding interest. Many rewards credit cards have slightly higher than normal interest rates. And, even if you get a rewards credit card with a competitive interest rate, it’s still important to avoid carrying a balance.
Think about it: Even if you are “only” paying 19.99% on your carried balance, what you pay in interest will more than outweigh earning 1% or 5% cashback. It is vital, if you want the best result from your credit card rewards, that you pay off the balance each month.
Best cashback credit cards
So what are the best cashback credit cards available right now? The all-around best card right now is the Scotia Momentum Visa Infinite, which has 4% cash back on purchases from eligible grocery stores and gas stations, 2% cashback on recurring payments and purchases at drug stores, and all other eligible purchases earn you 1% cashback.