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Are you still using a debit card instead of a cashback credit card in 2024? If so, you’re leaving money on the table. Why not get rewarded with cashback for purchases you’re already making?
You might not be a fan of credit cards, but the issue often isn’t the card itself—it’s how you manage it. Once you understand this, you’ll see why savvy people avoid using cash and take full advantage of the perks credit cards offer.
I was hesitant at first, too. It took me a while to decide whether upgrading from my traditional credit cards to a new rewards card was worth it. While many cards may seem similar, they’re actually tailored to different lifestyles.
- Love traveling? There’s a cashback card for that.
- Enjoy shopping? There’s a rewards card just for you.
- Always on the go? There’s one to suit your busy life too.
No matter your lifestyle, there’s a card that can help you make the most of your spending.
Table of Contents
How Cashback Cards Work
The card reward you with a percentage of every dollar you spend, which you can redeem at the end of your billing cycle. The rates vary by card. For example, the Discover It card offers a 1% cash back flat rate on all purchases, while the Fidelity card provides 2%.
Let’s say you spend $100 on coffee. If you pay with cash, the vendor gets their money, and you get your coffee in a simple, fair exchange. However, if you make the same purchase using a cashback card, you can earn up to $5 back, making the transaction even sweeter!
Maximize Your Savings With a Cashback Card
Money back on Everyday Spending
As mentioned earlier, forget about using a debit card get rewarded every time you swipe. There’s no need to keep track of fluctuating points. By the end of each billing cycle, you’ll see how easily the rewards add up.
Promotions
A rewards card like Discover It offers 5% cashback on select categories such as groceries, Amazon, and Walmart which change monthly. By keeping track of these categories, especially if you have multiple rewards cards, you’ll know which card to use to maximize your reward and get the most out of every purchase.
Redeeming Rewards
Running low on your budget but still craving a weekend getaway? Tap into your cashback! If you need extra funds, you can cash them out or redeem them as a statement credit. It’s the perfect way to treat yourself guilt-free. After all, it’s your money make the most of it!
Grow Your Savings
You can let your cashback accumulate as an emergency cushion, but why let that cash sit idle when it could be working for you, especially in the face of rising inflation?
With Fidelity, you can automatically invest your cashback rewards. All you need is a checking account for direct deposit and a brokerage account, like a Roth IRA, to start growing your rewards tax-free.
Discipline is Key
Using a cashback card as your primary payment method can help boost your credit score, but only if you manage it with discipline. A higher credit score alone can unlock countless opportunities.
Now that you have a clearer understanding of how to save with a cashback card, who are they best suited for?
If you value simplicity, a cashback card is ideal for you. You won’t need to juggle multiple cards for travel miles, groceries, dining, or specific stores like Costco and Sam’s Club.
Why chase reward points when you can have cash in hand?
Bottom Line
Using cashback cards is a smart way to reduce the cost of everyday purchases. By earning rewards on items you’re already buying, you can put money back in your pocket and boost your savings over time. Think of it as money you’ve earned because technically, it is not just free money.
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