Best tips for getting the most out of your cashback credit card

chase freedom unlimited cash back credit card

A few weeks ago, we covered the best cashback credit cards to choose from. However, something that many people don’t really dive into is how to best use that brand-new card. What are the best ways to take advantage? Well, we’re going to lay out everything you need to consider when trying to best use your cashback credit card.

Pay your cell phone bill to earn easy cashback

While most people think of using their cashback card for buying groceries, there are many other ways to use the card to earn extra cash for your spending. One way is to pay your cell phone or utility bills with your credit card. Sometimes your carrier or ISP could set it up so you pay from your bank account, but that won’t earn you any extra cashback. Setting up your monthly bills to auto-pay from your credit card will earn you easy cashback on bills that you’re already paying every month.

Something else to consider would be Apple’s iPhone Upgrade program. If you use this program in tandem with Apple Card, you’ll earn an easy 3% back on your iPhone purchase, which is absolutely killer. If you take the price of the iPhone 11 Pro, that means you’ll save $30 back just for using Apple Card, which is quite awesome when you consider most cards would only give you $10 back for that purchase.

Utilize rotating categories or check your card for the best cashback percentage

Depending on what card is in your wallet, you could have a tiered cashback structure or rotating categories. American Express’ Blue Cash Preferred card, for example, has three different categories with tiered cashback rates. Discover’s It card, on the other hand, uses rotating categories to give you 5% back in certain categories that change every three months.

With something like the Blue Cash Preferred card, there’s nothing for you to do except knowing what categories give what cashback and use the card. However, Discover’s system is a bit more complicated. Not only do you know to keep on top of what categories are in the current rotation, but you need to log onto the Discover website (or use the app) to enable the extra cashback each quarter. If you don’t enable the categories, you’ll be stuck at whatever your base cashback percentage is, meaning you’ll literally be losing out on extra money because you didn’t check and enable the bonus categories.

While credit cards can be tempting to just spend and make minimum (or just not full) payments, that’s always a bad decision if you can avoid it. Right now, times are tough, so it’s a little easier to just say “well, we’ll just hold off on paying the entire balance right now.” But, when you do this, interest starts to accrue. This rate can range from under 10% on some carts to nearly 30% on others, so be sure to check what your interest rate is.

Even if you’re earning 6% back on your purchases, carrying a balance on your card can cost you upward of 30% of the remaining balance, which can far outweigh the money you earn. While this doesn’t sound great, it’s easily avoidable if you keep spending within limits and ensure that you pay your card off every month in full. You don’t need to pay off the entire balance of the card, just make sure you’re paying off the statement balance and you’ll avoid interest charges, ensuring that you take full advantage of the cashback your card provides.

Looking for something else?

Now that you understand how to best take advantage of your cashback credit card, be sure to read through our credit card FAQ. Also, why not take a look at some cards to make a choice as to which you should sign up for. We’ve got a roundup of the best cards in every category, as well as some of our favorite 0% interest cards. Plus, we recently outlined the best cashback cards, if that’s something you’re into. For our comprehensive list of the best credit card deals around, check out our guide, which can be found here.

We also recently went over the best Amazon cashback cards to grab if you love shopping at the online retailer. However, if you prefer Target, we’ve also got a guide that helps you earn the most with purchases there, too.

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