How to Maximize Cash Rewards Cards

Cash rewards cards are credit cards that come with a cash back offer, usually as a credit on your statement. Each card has its own rewards rules, but most operate on a percentage or points system. Maximizing your rewards with one of these cards obviously means maximizing how you spend with the card, but we disclose some tips and tricks to get you to high rewards faster below. 

Understand How to Accrue and Use Your Rewards

Most cards let you accrue cash back as a percentage of spending. If the reward is 1 percent cash back, that means for every $100 you spend with the card, you earn $1 back. 

Other cards may let you accrue cash back points that convert to money via a statement credit. For example, you might earn a point for every dollar, and each point is worth 1 cent. The math comes out the same: for ever $100, you earn $1 back. 

Read the fine print to understand: 

  • How much cash back you can earn; some cards limit rewards and others are unlimited 
  • Whether you have to take action to claim cash back; some cards apply it automatically each statement, but others require you to claim rewards online or via phone 
  • Whether cash back expires; cards that require you to take action to claim rewards may put a time limit on your cash back 

Spending in the Right Categories 

Some cash rewards cards let you earn more money back when you spend in certain categories, and this is a great way to maximize what you earn. For example, a card might have 3 percent cash back on purchases at groceries stores and 1 percent back on all other purchases. Making it a priority to use that card whenever you’re shopping at grocery stores maximizes your earnings. 

A few rewards cards offer cash back in different categories each quarter. You might earn more at wholesale clubs one quarter, on fuel and dining out another quarter, on groceries a third quarter and on select online purchases the final quarter. The key to maximizing cash rewards with such cards is planning ahead. For example, stock up at the wholesale club on nonperishable goods such as toilet paper during the right quarter, and do you holiday shopping in the quarter that pays you most to buy things online. 

Maximize Spending With Your Card

Simply putting your rewards card to regular work is one of the best ways to maximize rewards. If you have a card that offers 2 percent cash back on all purchases, for example, and you spend $1,000 every month with that card, you’ll earn $240 for the year. 

The idea is to spend on things you would already be buying and pay off your balance each month to avoid interest charges (which diminish the value of your cash back). If you use your cash rewards card to pay for groceries, fuel and other regular expenses, you can make a surprising bonus in cash back every year.