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Can You Get Cash Back with a Credit Card?

By: Melissa Thomas, SVP Operations and Payments

Posted on 11/8/2022 3:08:17 PM

Woman smiles down at her credit card in one hand while holding several shopping bags with purchases she made with her credit card rewards points.

If you're looking for ways to earn extra cash, using a credit card that offers cash back rewards may be a good option. You can earn money simply by making purchases you would make anyway! In this blog post, we will discuss how to get the most cash back from your credit card and some tips on how to use it wisely.

What is cash back and how does it work with credit cards?

Cash back is a type of credit card reward that gives you money back on your purchases. You can earn cash back in two ways:

  1. By getting a percentage of your purchase amount back as cash,
  2. By earning points that can be redeemed for cash.

For example, if you make a $500 purchase on a card that earns 3% cash back, you could earn $15 back in rewards. The rewards are typically issued at the end of your statement period or billing cycle and can be redeemed in a few different ways. Your points can be redeemed as cash back to pay down your credit card balance or to deposit into your bank account. Another option is to redeem them in the form of a check or gift card, depending on your specific cash-back credit card. It is important to note that most rewards won't be available in a usable form right away.

Different cards have different rewards structures and allow you to earn more points in certain categories, like gas or groceries. To get the most out of your cash-back rewards card, find one that aligns well with your spending habits, so you're earning the most points possible in the areas where you normally spend the most money.

There are several different types of cash back credit cards available, so it's important to compare rates and fees before you choose one. So how do you go about choosing the right credit card and earning cash back? Here's what you need to know.

How to choose a credit card that offers the best cash back deals

When evaluating different credit cards and their rewards programs, there are several factors to consider. Some cards offer a flat rate of cash back on all purchases, while others offer higher rates for specific categories of spending, such as dining, travel, or gas. A good place to start is to find a card that offers a decent percentage of cash back on all purchases, in order to get the most value from your card. This way, you're earning points with every purchase you make. Community First's Visa Signature Card is a great example of this type of card, offering 1.5% back on every purchase you make, as well as an introductory $150 cash bonus if you spend $1000 in the first 90 days.

As we mentioned before, if you find yourself spending a significant amount of money in one or two categories on a regular basis, try choosing a card that offers extra cash back in those spending categories. An avid traveler would want a card that offers extra cash back on hotels, flights, and rental cars, especially when booked through that card's travel portal. Travel credit cards specifically have become a hot topic as travelers get more and more comfortable taking trips in a post-Covid world. Forbes has a helpful comparison guide to choose the best travel credit card of 2022.

Regardless of whether you choose a card with a flat-rate cash back on all purchases or one that offers more in certain categories, you should use your card on all eligible purchases. Make it a habit to put all purchases you can on your credit card, without carrying a balance to the next month. This way you'll be sure to earn your rewards in the appropriate categories without having to remember what your specific rewards structure is.

Another thing to consider when choosing a cash back credit card is the annual fee. Some cards charge an annual fee, while others do not. If the card has an annual fee, make sure that the amount of cash back you earn will outweigh the cost of the fee.

Finally, remember to read the fine print to make sure there aren't any restrictions on how and when you can redeem your rewards. Some cards may have a minimum amount that you need to accumulate before you can redeem your rewards, while others may only allow you to redeem rewards once a year. It's also important to be aware of any expiration dates on your rewards, as they may disappear if not used within a certain time frame.

By taking the time to read the terms and conditions of any credit card before applying, you can avoid any surprises down the road and ensure that you're getting the most value from your card.

Let Community First help choose the best credit card for your needs with our Credit Card Selection Tool.

How to maximize your cash back earnings

There are a few things to remember in order to maximize your cash back with a credit card. First, make sure you use your card for all eligible purchases. This means using your card for everyday expenses like groceries, gas, and utilities. You can also use your card for larger purchases, like furniture or a new TV.

Most importantly, make sure to pay off your balance in full each month. This is essential because carrying a balance will negate any rewards you earn and will actually end up costing you money in interest payments. If you can't pay off your entire balance each month, try to at least pay off enough so that you're not paying any interest fees.

How to use your cash back rewards to save money on everyday purchases

One of the best ways to use your cash back rewards is by using them to offset the cost of everyday purchases, such as gas or groceries. This can be a great way to save money on these regular expenses.

For example, if you have a card that offers 3% cash back on grocery purchases, you can use that money to help pay for your groceries each month. This can add up over time and can really help reduce the cost of your grocery bill.

The same goes for gas purchases. If you have a card that offers 3% cash back on gas, you can use that money to help pay for your monthly gasoline expenses. This can save you a lot of money over time, especially if you drive a lot.

If you're looking to make a larger purchase such as a vacation or new furniture, let your points accumulate over time and then redeem them for that purchase. Sometimes, your purchase will end up being cheaper if you pay for it with rewards points. For example, a vacation booked with points earned on a travel credit card will be cheaper in the long run because you earned extra cash back in certain categories and reached the cash value of your vacation faster than just saving up money for it. Essentially, you made free money on purchases you would've made anyhow, and then used that free money to fund your fun vacation.

Couple on motorbike smiles as they zoom down a road towards the camera

The best ways to spend your cash back rewards

There are many different ways to spend your cash back rewards, and it really depends on what you value most. If you love to travel, you can use your rewards to book flights, hotels, and rental cars. Or, if you prefer to shop, you can use your rewards to offset the cost of your purchases.

You can also use your cash back rewards to pay down debt or to fund a savings account. This can be a great way to get ahead financially and to make the most of your rewards.

No matter how you choose to spend your cash back rewards, remember to use them in a way that will benefit you the most. That might mean using them to save money on everyday expenses, or it might mean using them to book a luxurious vacation. Whatever you choose, make sure it's something that will make you happy and help you reach your financial goals.

Learn more about Community First's CURewards Program, earning you one point for every $1 you spend on a qualifying credit card.

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