How to Make The Most of Your Cash Reward Bonus

Most credit cards offer some type of reward bonus that you can redeem for cash. This essentially allows you to earn money every time you shop. Make the most of your cash rewards with the following tips.

Earn More
Pay careful attention to the rules of the card, and use the card in the ways that will earn you the most money. For instance, CreditCards.com points out that many cards now offer a bonus cash reward just for signing up and using the card. However, if you don’t follow the instructions to get the bonus – usually spending a certain amount of money – you won’t get that money. Cards also tend to offer bigger rewards for certain types of purchases, such as groceries or gas. Take advantage of this. Nerd Wallet suggests buying gift cards for other retailers at the grocery store in order to get the larger cash rewards.

Opt In
Many cards simply let you earn rewards every time you use the card, but some offer bonus rewards at different times throughout the year. A key component of this is opting in to the category. For instance, with the Chase Freedom card, you can earn 5 percent cash back on purchases if you’ve opted into the quarter’s category. If you don’t, you only get the usual 1 percent cash back.

Alternate Cards
Those who use credit cards for miles often put all their spending on one card to get the most miles possible. This isn’t the best technique for those who use cash rewards cards. If you have a variety of cards with different percentages for different types of purchases, make sure you always use the card that will give you the most money back. For instance, you might use one card for gas and another for groceries.

Boost Your Bonus
Some cards offer a bonus when you cash out in certain ways. For instance Bank of America’s BankAmericard offers a 10 percent bonus when you deposit your rewards into a Bank of America checking or savings account. Check if your card has a way to earn a bonus like this one.

Spend Your Bonus Wisely
Of course, if you really want to make the most of your cash rewards, you need to spend the money wisely. Resist the urge to spend this “free money” on a splurge. Instead, use it toward debt or add it to your savings account.

Cash reward cards are a great way to get a bit of money back every time you spend. However, you need to be sure that you’re not carrying a balance from month to month. This could negate any rewards you are receiving.

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