Why Choose Cash Back Rewards
Many people prefer cash back rewards to other credit card perks such as frequent flyer miles. Cash rewards programs are simple to understand and easy to redeem. Unlike points and miles, cash can earn interest when unused and its value is not subject to the constantly changing terms and conditions of credit card issuers and travel programs.
Earning Cash Back through Everyday Purchases
By using credit cards for day-to-day purchases, you can earn between 1%-6% cash back on your expenses. For example, if you spend $2,500 each month, you could earn an additional $80 a month in cash back, totaling $960 each year. This can be added to your discretionary spending or applied to your savings.
However, it is important to note that cash back credit cards should only be used by those who can pay their credit card balances in full and on time. Otherwise, you may owe more in interest and penalties than you receive as cash back.
Top Cash Back Rewards Credit Cards
Some popular cash back rewards credit cards include the Bank of America® Customized Cash Rewards credit card and the Blue Cash Preferred® Card from American Express.
The Bank of America® Customized Cash Rewards credit card offers 2% back at grocery stores and wholesale clubs, 3% back in the category of your choice, and 1% on other purchases. There is no annual fee, and you can earn a $200 online cash rewards bonus after spending at least $1,000 in the first 90 days of account opening.
The Blue Cash Preferred® Card from American Express offers 6% cash back at U.S. supermarkets and on select U.S. streaming services. In addition, it offers 3% cash back at U.S. gas stations and on transit. The annual fee is $0 for the first year, then $95. You can also earn a $250 statement credit after spending $3,000 in the first 6 months.
Benefit of Cash Back Rewards
While cash back rewards may not be as exciting as travel rewards, their value should not be underestimated. Unlike points and miles, you can always use cash rewards. Start collecting your cash back rewards today!