*Warning* I only recommend you try the suggestions in this article if you have excellent self-control with your credit cards.
I like free money. We know that nothing is really free, somebody somewhere is paying for it. So, what’s the deal with those cash back cards?
Credit card companies charge merchants a fee per transaction when you swipe your credit card at retailers in person or online. The cash back is, realistically, a cut of the money the merchant is paying the credit card company. A really small cut, but a cut nonetheless. The more times you swipe your card, the more money the credit card company makes, and the more you make.
So, how can you make more money? Here are some steps to follow:
- Pick a credit card – To maximize your return, I suggest you pick one credit card to use. This ensures you get the maximum cash back as quickly as possible. Scattering spending over several cards will slow your earnings because each will likely have a minimum balance to reach before issuing your cash back.
- Study up – Read all the information pertaining to the cash back program. Make sure you understand which purchases qualify, the minimum points required to receive cash back, method of cash back delivery, etc. Method is important because you want to make sure the process isn’t too complicated or time-consuming. For example, some rewards can come in the form of debit cards that are tricky to use.
- Start spending – Pay all your regular expenses with your chosen credit card. Check on your monthly bills as well. Daycares, utility companies, and all sorts of places accept credit cards. This can help you get more cash back quickly.
- Pay the card – Make sure to pay your credit card balance in full before the end of the balance period so that you aren’t paying interest to the credit card company. No sense in paying money for your cash back, right?
- Pay attention – Each time you pay your balance, look to see if you have met the minimum requirement to request your cash back. Make sure you request to be paid out at every opportunity. Changes on the account such as closing the account or discontinuation of the program could adversely effect your ability to get your cash. So get it early and often.
- Repeat – Do this over and over again.
I know that with many reward cards you can choose between gift cards and cash, and that the gift cards have a higher dollar amount than the cash back. I recommend you stick with the cash. Why? Well, even if they have a card for your favorite retailer, you may not really need items from that retailer at the time. Also, if you’re anything like me, you’ll have another $10 left on the card and wind up buying something that requires you to kick in some of your own cash. At this point you’re not just spending someone else’s money, you’re spending your own. And the point here is really to make a tiny bit of money. So, get out there and use those credit cards (but only on stuff you were going to buy anyway, and pay those things off every payday!)