Using a combination of cash back rewards points and high interest earning bank accounts you can maximize the amount of cash you get back from your rewards card or cash back credit card year after year.
Use your credit card for every purchase possible. Everything from small daily purchases to large one time only purchases. The more you use the card, the more points (cash back) you’ll accumulate. For many cards, nearly every purchase can be cash back purchases.
Check your rewards program details often. Many rewards cards offer bonus cash back on certain types of purchases (such as gas or food) and some even offer websites where you can shop online and earn additional bonus cash back. You’ll also want to look for seasonal or quarterly bonus categories.
Float your balances as long as possible. This is key to adding even more cash to your cash back earnings each year. Check your monthly statement and see when each billing period closes and how long the grace period is. Plan big purchases around these dates.
Hold off on big purchases until right after the billing period ends. This way the purchase goes on the next billing period which can more than double the time between purchase and due date.
For example if your billing period ends on the 3rd of every month and you have a 25 day grace period, a purchase you make on the 4th of the month will be included in the next billing cycle which closes the following 3rd. On that purchase your grace period in essence goes from 28 days to up to 59 days.
Keep your money in a high interest checking or savings account that you have easy access to. While the balance on the card “floats” until the due date, the money for your purchase will be sitting in your bank account earning you interest.
Pay off the statement balances in full on each and every due date to avoid interest charges.
Wait to redeem the cash back rewards or cashback credit card checks until you rack up enough to get the maximum redemption amount. For example some credit cards earn between 1 to 5% on every purchase and offer bonus cash for a redemption for more accumulated points in essence boosting the percentage per dollar slightly up.
This way to add even more cash earning potential to your cash back credit cards is only viable if you pay your statement balance on the credit card in full every month by the due date.
Keep in mind that credit card issuers change terms from time to time and some cards may carry an annual fee that reduces your cash back earnings. Also keep a close eye on the credit cards limit and expiration dates of cash back rewards.