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Cash Back to Help Fight Inflation

5 min read
Cash Back to Help Fight Inflation

Cash Back to Help Fight Inflation

Cash Back to Help Fight Inflation

Using cash back and rewards to fight things that are happening currently like the pressures of inflation that so many American families are feeling. 

What is cash back? When a card provider offers cash back rewards it just means that that card holder receives a certain percentage of every qualifying purchase back to them. For example, if a credit card provider offers let’s say 1.5% cashback on every purchase that’s going to mean that for every dollar that we spend we’re going to get one and a half cents back in cash back or rewards.

Every Penny Counts

Although earning a few pennies of cash back per dollar might not seem like a lot, your cash back rewards can quickly add up especially on the everyday spending. You’ve got to remember if you’re going to be spending the money anyway on typical everyday expenses why not get a percentage back. A credit card that offers let’s say 3% cash back on groceries, for example gives you the opportunity to earn three dollars cash back for every hundred dollars that you spend.   So, if you’re spending six thousand dollars a year on groceries that’s $500 per month you could earn $150 of cash back every year just on your grocery purchases when you earn cashback rewards. Your rewards are stored on the card account until you choose to redeem.

How Does it Work

Next up how do we earn cashback and how does cash back work on cards? Well, it depends on the actual card that you’re using. Some cashback cards offer the same cash back rate on every single purchase while others offer high percentages on cash back for certain types of purchases like dining, groceries or maybe even gasoline and then a select number of cash back cards rotate their highest earning cash back categories every quarter and they allow you to choose or change your bonus categories as you go along.

If you want to know how to earn cash back on a particular card you need to start by understanding the cards cash back reward system, you know which you are dealing with. The following types are most typical: a flat rate cash back card, a bonus category cash back card or maybe even a dynamic cash back card.

Different Kinds of Cash Back

Let’s start with the flat rate cash back card. Flat rate cash back cards offer the same cashback percentage on every qualifying purchase. It does not matter whether you’re buying groceries, shopping online or filling up the gas tank at the service station. Whatever it might be you’re going to earn the exact same percentage of cash back per every dollar spent. 

Second are the bonus category cash back cards. Some credit cards offer higher cash back percentages on certain types of purchases. These cards are called bonus category cash back cards because you’re going to get a higher rate of cash back in certain categories like travel or groceries then a less percentage on the rest of the cash back items.

Third is the rotating category cash back cards. A rotating category cash back cards is a little more complicated. They’re like the bonus category cash back cards but except the rotating category cards offer higher cashback percentages on certain types of percentages on certain types of purchases and then these purchase categories can rotate every quarter and then us as the cardholder must activate the rotating bonus categories before they can earn their cash rewards.

Different Ways of Redemption

How to earn cash back? There are so many ways to earn cash back rewards once you’ve accumulated a decent balance. Some of the most popular ways to redeem your cash back are for statement credits, online shopping or maybe even gift cards. Certain cards also allow you to deposit your cash back directly into your bank account or use it to make a charitable donation. Some other cards even offer the option to use your cashback to book travel through the issuer’s own online portal.  Still other credit card issuers or debit card issuers let you connect your cashback rewards to places like PayPal or Amazon enabling you to use your cashback rewards to cover part or maybe even all of a purchase.

Creating the Best Strategy

Making sure that you understand all the ways your credit card allows you to redeem your cashback rewards is important that way you can put every dollar of cash back to good use for you and your own personal situation. The best way that you can make the most of your cash back rewards is to combine a flat rate cash back card one that pays just a continuous percentage with a bonus category or rotating category cash back card. Use the bonus category or rotating category card every time you’re shopping in one of the categories that you earn the highest percentage of cash back and then use your flat rate cash back card for all your other purchases.

This technique is effective because most bonus category and rotating category cards only offer like one percent cashback on general purchases but the best flat rate cash back cards are offering maybe 2-3% across the board so if a purchase is not in the bonus category you can get more cash back by using the flat rate cash back card. Knowing how to combine cash back cards will maximize your earnings and help you make the most out of your cashback rewards.

Remember no matter what environment we’re faced in we have ways that we can combat those pressures. In the inflationary environment that we currently find ourselves in, cash back rewards on associated credit or debit cards are a great way to fight that pressure by putting some of that money that you’ve lost through that hidden tax back in your pocket through rewards.

Millionaire Mindset Life

Submitted By Mike Amos

Founder and Active Contributor of millionairemindset.life

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