You can get a lot of value out of a credit card. Rewards programs, for example, help you earn cash back or points toward travel rewards. But figuring out how much cash back you're earning on your credit cards is tricky. The best way to determine how much value your rewards provide is to look at the fine print.
What are cash rewards?
Cashback is the simplest rewards program. You earn cash when you spend on your card and then redeem it for a check or a statement credit.
Cashback cards are usually best for people who don't travel much or want something simple to track their spending with. If you are okay with manually tracking your spending and keeping an eye on thresholds, they can be a great way to save money over time without having to remember any special rules or restrictions.
How do cash rewards work?
Cash rewards are a type of credit card reward. They're usually given in the form of a statement credit, and they can be used for anything you want. You can use the cash back to pay down your purchases or redeem it for cash. If you redeem your cash back into your bank account or as a check, it will take two to four weeks to process after your statement closes.
If you decide not to redeem your cash back for cash or other forms of payment, then it will just show up on your next statement as an account credit (not counted against any outstanding balances).
How much cash back can you earn?
You can use the cash back credit cards to earn rewards on all of your purchases, but there are some limitations. For example, you may only be able to earn 1% in cash back on a particular purchase or up to a certain amount per month. Also, be sure to check the terms and conditions of any potential card before applying.
Cashback credit cards are available through different companies, offering different rates and amounts depending on their policies. It's important that you compare them before choosing one so that you're sure it will meet your needs and requirements when it comes time for you to pay off your balance at the end of the billing cycle. Some cards offer higher rewards during certain times of the year, like during tax time or in December when everyone buys gifts for friends and family members. As per SoFi financers, 'Upgrade from 2% cash back rewards to 3% cash back credit card for a whole year by getting approved for a SoFi Credit Card.'
How do you redeem cash rewards?
Redeeming cash rewards is a simple process. When you receive your statement, you'll see the amount of cash back you've earned and any other rewards applied to your account.
You can use these funds to pay for purchases in stores, online or by phone—or opt to redeem them in one of several other ways:
- Gift cards: You can put store credit on gift cards and give them as gifts. Or if you're low on cash, it's easy enough to buy yourself a quick dinner at Panera Bread, Applebee's or Subway while you're out shopping.
- Merchandise: Stores like Amazon offer gift cards for specific items (such as Amazon devices) that can be purchased by redeeming rewards points.