Advanced Credit Card Hacks (Part 1): How To Maximize Your Cash Back And Cashback Rewards

Credit Card Hacks

Discover the best credit card hacks to maximize both your cash back and cashback rewards. Ready to get started? Here we go…

Are there any credit card hacks that can help you make money on your purchases or at least get some rewards for your patronage?

Oh, Yes there are….

So come along for the ride. Let’s embark on a journey to financial savvy where we unravel the secrets to maximizing your cash back and cashback rewards. Whether you’re a seasoned shopper or a newcomer to the world of credit, this guide is your golden ticket to turning everyday purchases into a treasure trove of returns.

We’re going to see several credit card hacks specifically tailored to helping you maximize your cash back and several specifically tailored at maximizing your cash back rewards.

Once you’re done here, click the link to access Part 2 of this blog post series “Advanced Credit Card Hacks (Part 2): Maximizing Rewards for Business and Student Cards“. Learn how to boost rewards and unlock the secrets of high earnings business and student credit cards.

The first thing we need to do is differentiate between cash back and cashback rewards. They’re close but not exactly the same.

1. What is Cash Back

1.1 Cash Back Definition

Cash back is simply a credit card benefit that refunds you a small amount of money (in different forms) when you buy something. You get cash back on a purchase.

1.2 Cash Back Forms

The cash back can be refunded to you in many forms depending on the credit card company that you are dealing with. Firstly, the cash back amount that you earned because of your purchase, can be applied directly to your credit card account, thus lowering the balance that you owe on that card. Secondly, it can be deposited directly into your back account in the form of money. Thirdly, it can be given to you in the form of a check that you can deposit into your bank account.

1.3 Straightforward Approach

Cash back on a credit card is straightforward. You buy something with the card, you get a percentage back in cash. That’s it.

1.4 Maximum Cash Back Amounts

Cash back rates are usually 1% to 5% of your purchase. That is what you get back. Moreover, it’s usually capped at a few hundred dollars. There may be exceptions, but this is the industry norm.

1.5 Real Life Example

If you spend $2000 on a new Smart TV, you can get back anywhere from $20 to $100, once again, depending on the credit card company you’re dealing with.

$2,000 at 1% = $20          $2,000 at 3% = $60          $2,000 at 5% = $100

2. What are Cashback Rewards

2.1 Definition of Cashback Rewards

Cashback rewards can be more flexible than straight cash back. They can take on many different forms. In truth, they appeal and cater to wider range of customers, satisfying many.

2.2 Cashback Rewards Forms

Cashback rewards typically come in the form of points, miles, statement credits, and gift cards. So let’s take a look at each….

2.2.1 Points

Credit card points are the most common form of cashback rewards. Every time you buy something with your card, you can earn points. You can then redeem those points for rewards like

• Merchandise
• Entertainment
• Travel accommodations
• Gift cards
• Statement credit
• Charitable Donations
• Investment Contributions and even
• Cash Back

2.2.2 What Are Miles On A Credit Card

So, what are miles on a credit card? Credit card miles are usually geared towards the travel industry. Here as well, when you buy something you earn miles. You can then redeem those miles for rewards like:

• Travel Upgrades
• Travel Packages
• Flights
• Airport Lounge Access
• Baggage Fees
• Airline Handling Charges
• Hotel Rooms
• Car Rentals
• Cruises
• Shopping

Click here to access our blog post “What Are Credit Card Miles: Ultimate Beginner’s Guide (Everything You Need To Know)“.

2.2.3 What Are Statement Credits

What are statement credits? Statement credits are rewards offered by credit card issuers that let cardholders use their earned points to decrease their credit card balance. Essentially, you collect points through your purchases, which vary depending on the spending category—commonly, categories such as dining, travel, and groceries offer higher points.

Once you have enough points, you can choose to convert them into a statement credit. This process will apply a credit to your account, effectively lowering the amount you owe on your card. This method of using your rewards points is straightforward and can directly reduce your monthly credit card bill.

2.2.4 Gift Cards

Another form of cashback rewards are gift cards. These gift cards are usually issued the for major retailors. Here are the categories gift cards generally cover…

• Retail Stores: (Amazon, Target, Walmart, Macy’s etc…)
• Restaurants and Services: (Starbucks, Olive Garden, Chipotle, Uber Eats, DoorDash etc…)
• Entertainment: (iTunes, Google Play, Netflix etc…
• Airlines and Hotels: (Southwest, Delta, Marriott, Hilton etc…)
• Gas Stations: (Shell, ExxonMobil etc…)
• Home Improvement Stores: (Home Depot, Lowe’s etc…)
• Grocery Stores: (Whole Foods, Kroger etc…)
• Specialty Stores: (Sephora, Best Buy etc…)

2.3 Diversified Approach

Because of the many different forms these rewards come in, redeeming cashback rewards can take a diversified approach. This may involve meeting minimum spending requirements, maximizing your bonus categories, and tracking your points and miles.

2.3.1 Meeting Minimum Spending Requirements

Many credit card rewards programs offer significant sign-up bonuses that require you to spend a certain amount of money within a specific timeframe after opening your account. Here is what you need to consider:

• Understanding Requirements: Know the exact amount you need to spend and the time frame. For example, a card may offer a $200 bonus after you spend $1,000 in the first three months.
• Planning Major Purchases: Aligning major purchases or bills with this spending requirement can help you meet the threshold without unnecessary spending.
• Budget Integration: Incorporate this spending into your budget to avoid carrying a balance that could incur interest, negating the value of the rewards earned.

2.3.2 Maximizing Bonus Categories

Credit cards often offer enhanced rewards rates on specific categories such as dining, travel, groceries, or gas. To make the most of these bonuses you need to consider:

• Category Rotation: Some cards rotate these categories quarterly and require you to activate the bonus. Keep track of these changes and plan your spending accordingly.
• Permanent Bonuses: Other cards offer permanent bonuses on certain categories. Use these cards strategically for everyday spending in their high-reward categories.
• Supplementary Cards: If your primary card doesn’t offer high rewards in a category you spend heavily in, consider getting a supplementary card that does.

2.3.3 Tracking Your Points and Miles

Managing your points or miles effectively is important if you’re looking to maximizing your rewards. Here’s how you can keep track and utilize them efficiently:

• Regular Monitoring: Regularly check your points or miles balance. You can go through your online banking portal or their mobile app. This helps you keep track of how many points you’ve earned and if there are any discrepancies.
• Understanding Redemption Values: It’s important to become familiar with the different redemption options and their value. This of course depends on the credit card company you’re using. As an example, points might be worth more when used for travel bookings through the card issuer’s portal instead of cash back or merchandise.
• Expiration Policies: Make sure you know the expiration dates of your points or miles. Some programs require activity on the account to keep points active, while others might have a fixed expiration date regardless of account activity.

2.4 Cashback Rewards Amounts

The dollar value of cashback rewards—whether in the form of points, miles, statement credits, or gift cards—varies significantly. This variation depends on the credit card issuer and the specific type of reward. Below, you’ll find a detailed overview of how each type of cashback reward is typically valued.

2.4.1 Travel Redemptions

Points and miles redeemed for travel-related rewards, such as flights and hotel stays, generally offer the best value. Their value can range from 1¢ to 2¢ or more each. This is particularly true when points or miles are transferred to an airline or hotel partner, where they can potentially increase in value depending on the specific redemption.

2.4.2 Statement Credits

Redeeming points for statement credits is straightforward and reliable, with each point usually valued at approximately 1¢. This method directly reduces your credit card balance, effectively converting points to cash.

2.4.3 Gift Cards

Points redeemed for gift cards typically hold a value of 1¢ per point. Occasionally, credit card issuers may offer promotions that enhance the value of points when converted to gift cards, enticing customers to opt for this redemption method.

2.4.4 Merchandise

Points redeemed for merchandise, such as electronics, home appliances, or sports equipment, through the credit card’s rewards portal often yield a lower value, frequently less than 1¢ per point. Although merchandise redemptions generally offer less value compared to other options, special deals or discounts available exclusively through the rewards portal can sometimes make this a more attractive option.

2.4.5 Charitable Donations

Redeeming points for charitable donations preserves their value at 1¢ per point, allowing you to contribute to causes you care about directly through your credit card’s reward system.

2.5 Real Life Examples

Let’s explore practical ways to maximize your cashback rewards through these real-life scenarios. Each example demonstrates effective strategies for using points and miles in everyday situations.

Example 1: Travel Rewards Maximized

Consider transferring 50,000 points from your credit card to an airline partner. Normally, a round-trip ticket to Europe can cost $1,200. By using transferred points, you could secure this flight for free, valuing each point at approximately 2.4¢.

50,000 points at 2.4¢/point = $1200

This method not only saves money but enhances the value received from your points.

Example 2: Statement Credits

Use 30,000 points to deduct $300 from your credit card bill, especially helpful after major purchases like home upgrades.

30,000 points at 1¢/point = $300

This redemption directly decreases your expenses, with each point offering a solid return of 1¢.

Example 3: Gift Cards During Promotions

During special promotions, redeeming 20,000 points might get you $250 worth of gift cards, instead of the usual $200.

20,000 points —–> $250 gift cards = 25% Bonus

This 25% bonus enhances your purchasing power, ideal for holiday shopping.

Example 4: Merchandise Redemption

If you’re interested in new tech, using 35,000 points might fetch a $350 camera through your rewards portal.

35,000 points at 10% = $350

Occasionally, promotions could increase the worth of your points by an additional 10%, making such redemptions more valuable.

Example 5: Charitable Donations

Donating 10,000 points to charity can be both fulfilling and financially wise. This action converts your points into a $100 donation, maintaining their 1¢ value per point and aiding a cause you care about without impacting your wallet.

10,000 points at 1¢/point = $100

2.6 Maximizing the Best Credit Card Rewards

To truly maximize the best credit card rewards, it’s crucial to fully grasp the variety of rewards programs on offer. Each card typically targets different spending categories such as travel, dining, or groceries, offering enhanced points for these areas.

Consider a credit card that rewards additional points for grocery shopping if you frequently spend in this category. Such targeted strategies are especially beneficial for optimizing rewards through regular expenses.

By strategically using your card for all suitable purchases and clearing the balance monthly, you avoid interest while maximizing rewards. Implementing these strategies ensures you’re effectively utilizing the best credit card rewards available, making every purchase more rewarding.

So now, let’s take at look at the reason you’re here…

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3. Cash Back Credit Card Hacks

Here are several credit card hacks specifically tailored to help you maximize your Cash Back. With that in mind, let’s delve deeper into each of these strategies and see how you can effectively optimize each hack so you can get the most amount of money possible back in your pocket.

3.1 Select Optimal Cash Back Cards

Really take a moment to review your monthly expenses. Firstly, break down where your dollars are going, be it groceries, dining out, or utility bills. Secondly, once you’ve pinpointed your highest spending categories, look for credit cards that offer exceptional cash back rates specifically for those categories. For example, let’s say that you find that your family’s food expenses are your biggest budget item. There are cards that offer exceptional cash back on supermarket purchases, potentially up to 6%. This can add up to big savings over time.

3.2 Maximize Rotating Category Bonuses

Cards that feature rotating categories can supercharge your cash back rewards. They do however, require a bit of planning. Every quarter, these cards offer elevated cash back (up to 5%) on different categories. Things like gas, dining, or department stores. So what you can do is plan your major spending accordingly. During the credit card’s tech-friendly quarter, buy your electronics. During the food-friendly quarter, stock up on you favorite food. You can squeeze out every penny of value. It’s crucial to set reminders to activate these bonuses, as they are not automatic.

3.3 Utilize Sign-Up Offers Wisely

Many credit cards use attractive sign-up bonuses to attract new customers. They offer, for example, $200 back if you spend $1,000 in the first three months. You can take advantage of these offers in big way. What you can do is time your next big purchase with your application for this “sign-up bonus” credit card. This could be anything from holiday expenses, to a planned purchase of home appliances. This strategic timing lets you hit the spending requirement naturally, without urging you to buy things you don’t need.

3.4 Activate and Use Card-Linked Offers

Most credit cards provide special offers that are linked directly to the card. The card needs to be activated before you can use it. These offers can be extremely lucrative, because many offer additional cash back on purchases at certain retailers. Therefore, why not make it a habit to review these deals regularly—perhaps as part of your weekly budgeting routine? Activating these offers before you shop will ensure you’re always getting the best deal available.

3.5 Use Your Card for Every Purchase

Use your cash back credit card for everything. Use it for every purchase, big or small. From a morning coffee, to a car wash, to an online streaming service. Make sure you’re collecting cash back (which is the nature of the card) on every transaction. In truth, the key here is to be vigilant and pay off your card balance in full each month by the deadline. If you don’t, the interest will whittle away any rewards you’ve earned.

3.6 Automate Your Recurring Payments

If you want to do a strategic move, automate your recurring payments by linking them to a cash back credit card. Now, your regular expenses turn into sources of rewards. You can set up your monthly fixed costs like the electricity bill, the insurance payment, and Netflix to be automatically charged to your cash back card. This method helps you better manage of your finances by reducing the number of transactions you need to handle manually, but it also makes sure that you earn rewards on these recurring payments each and every month. Therefore very dollar spent on these fixed payments gives you more cash back.

3.7 Diversify Your Card Portfolio

If you want to make the most of all your cash back opportunities, it’s a good idea to have several credit cards. Why you ask? Because each credit card offers different types of cash back rewards and you can chose the appropriate one for the appropriate reward. For example, one card might give you the best cash back when you eat out, so use that one to pay for meals. Another might be better for booking flights and hotels. Use that on for travel. By using each card for its best rewards category, you can earn more cash back overall. This strategy helps you get more benefits from your spending and can also improve your credit score by showing you can handle multiple accounts well. Make sure to pay all balances by their deadline to make it worthwhile.

3.8 Assess Annual Fees Against Benefits

Every year, take the time to evaluate the cost-effectiveness of each credit card that charges an annual fee. Look beyond just the cash back earned; consider other perks such as complimentary travel insurance, extended warranties, or exclusive discounts that add value to your lifestyle. If you find that the total value of these rewards and benefits does not justify the fee, it might be a sign to reconsider the card.

Comparing these cards with no-annual-fee alternatives can be eye-opening. Sometimes, switching to a card that offers slightly lower rewards but no annual fee could increase your net savings. This assessment helps ensure that every dollar you spend on fees is actually working to bring you greater overall value, aligning with your spending habits and financial goals.

3.9 Take Advantage of Online Shopping Portals

Credit card shopping portals can significantly boost your cash back earnings. These portals have partnerships with a multitude of retailers, ranging from clothing and electronics to home improvement stores, often providing higher cash back rates than you’d receive from shopping directly. Before making any online purchase, it’s worthwhile to first visit your credit card’s shopping portal to see if the retailer is listed.

Now, credit card shopping portals are not usually made public. You cannot access them like a regular website. Because they need to authenticate the user, you can only get to them via your account on the credit card company’s website.

Here’s how you can access these shopping portals through some of the major credit card issuers:

Chase: For Chase cardholders, the shopping portal is called “Shop through Chase.” Access it by logging into your account at Chase’s website.
American Express: American Express users should look for “Amex Offers” after logging into their accounts at American Express’s website.
Citi: Citi’s “Citi Bonus Cash Center” is accessible through the Citi account portal at Citi’s website.
Bank of America: Bank of America customers can find “BankAmeriDeals” by signing into their accounts at Bank of America’s website.
Discover: Discover cardholders can use “Discover Deals” by logging into their accounts at Discover’s website.

Capital One Shopping: This a tool that automatically finds and applies the best deals at checkout. It offers extra rewards, saving you money and maximizing your earnings on every online purchase. You can access it at Capital One Shopping.

This extra step can lead to substantial savings, especially during promotional periods when cash back rates are increased to entice shoppers. Also, combining these portal deals with other ongoing sales or coupons can maximize your savings even further, making each online purchase more rewarding.

3.10 Plan Your Billing Cycle Strategically

Timing your spending can be just as crucial as managing what you spend on. By aligning your larger purchases or significant bill payments with the start of your credit card’s billing cycle, you can optimize the use of your card’s grace period. The grace period is the time during which any purchases made do not accrue interest, typically lasting between 21 to 25 days after the close of a billing cycle.

Making big-ticket purchases right after your billing cycle resets essentially gives you nearly a full month plus the length of the grace period before any payment is due. This can be incredibly beneficial for cash flow management, as it allows your money to remain in your bank account longer. During this time, you can use these funds in ways that might be more immediately necessary or beneficial, such as investing, paying down other debts with higher interest rates, or simply keeping your savings intact to accrue interest.

4. Cashback Rewards Credit Card Hacks

These credit card hacks specifically tailored to help you maximize your Cashback Rewards. Here as well, let’s delve deeper into each of these strategies and see how you can effectively optimize each hack so you can get the most satisfying rewards possible with every swipe of your card.

4.1 Leverage Reward Multipliers

Maximizing your rewards is all about strategic card usage, especially when it comes to cards that offer multiple points per dollar spent in specific categories. For instance, if your credit card offers 3X the points on grocery spending, make sure to use it every time you’re at the supermarket. Furthermore, if you frequently dine out or travel, using a card that multiplies rewards in these categories. It will similarly accelerate your points accumulation. It’s also beneficial to keep an eye out for special promotions or limited-time offers that temporarily boost point multipliers, allowing you to plan purchases around these periods. By aligning your spending with these multipliers and timing your purchases strategically, you can exponentially increase the rewards earned, making each transaction more valuable.

4.2 Combine Cards for Layered Rewards

For this credit card hack, it’s about using a combination of credit cards strategically so you can significantly amplify the rewards you earn from a single purchase. This approach, often called “reward stacking,” involves using different cards to capitalize on various bonus categories and special offers. For example, begin by accessing a retailer through your credit card’s online shopping portal that offers additional points or cash back.

Once at checkout, switch to another card that provides a high reward rate specifically for online purchases or for that particular type of retailer, such as electronics or fashion stores. Additionally, if any of your cards offer seasonal promotions or dynamic spending bonuses, coordinating their use in a single transaction can multiply the benefits. This layered approach ensures that you maximize the potential cash back or points available, turning everyday purchases into a more lucrative opportunity.

4.3 Optimize Redemption for Peak Value

To maximize the value you get from your points, it’s important to redeem them during promotional periods when their value is significantly increased. Credit card issuers frequently offer promotions that enhance the value of points, particularly for travel-related redemptions such as flights and hotel stays. For example, during a promotional event, your credit card may offer a 20% to 50% bonus on points redeemed through their travel portal. This means that points typically worth $0.01 each could increase to $0.015 or even $0.02 during the promotion. It may not sound like a lot, but it is.

To take advantage of these enhanced values, keep track of upcoming promotions by subscribing to your credit card’s newsletter or regularly checking their website. Planning your redemptions around these peak times can lead to substantial savings, especially for expensive purchases like international flights or luxury hotel stays. Additionally, some credit card companies extend similar bonuses to other types of redemptions, such as merchandise or exclusive experiences.

4.4 Transfer Your Points Wisely

Moving your points to airline or hotel loyalty programs instead of using them directly through your credit card can often give you more bang for your buck. This is because some travel programs value the points more highly, especially for things like flight upgrades or luxury hotel stays. Before you transfer, look carefully at how many points you need to transfer and what you’ll get in return. Some programs have special deals where you need fewer points than usual for flights or hotel rooms, which can really add up to big savings.

Always compare different transfer options to find the best deal. This might mean checking several airlines or hotel chains to see where your points can stretch the furthest. By choosing the right time and program to transfer your points, you can make your rewards work harder and go further.

4.5 Take Advantage of Renewal Bonuses

Some credit cards offer you a special thank-you in the form of renewal bonuses when you pay your annual fee to keep the card for another year. These bonuses can be quite generous, giving you extra points or a higher percentage of cash back just for staying with the same card. These extra points can often match or even exceed the cost of the annual fee itself, making it a smart choice to renew your card. Before your renewal date, check what bonuses your card offers. It could be thousands of extra points that you can use for travel, shopping, or more, or an increased cashback rate that will apply to your purchases throughout the coming year. By taking advantage of these renewal bonuses, you essentially get more value back than the fee you pay, which can make sticking with your current card a smart financial move.

4.6 Exploit Shopping Portal Offers

This credit card hack is about making sure to visit your credit card’s rewards portal first, before you shop online. Many credit cards have partnerships with online stores. If you access these stores through your card’s portal, you can earn extra points or get more cash back than usual. For example, you might normally earn 1% cash back on purchases from a particular store, but if you visit the store through your credit card’s portal, you could earn 3% cash back or more. Always take a few minutes to check the portal for additional deals or bonus offers before making any online purchase.

So, here’s how you can access the shopping portals of some additional major credit card issuers. Five more have been listed above in section “3.9 Take Advantage of Online Shopping Portals“.

Capital One: Capital One cardholders can access “Capital One Shopping” by logging into their account at Capital One’s website.
Barclays: Barclays users can find “Barclaycard Rewards Boost” after logging into their accounts at Barclays’s website.
Wells Fargo: Wells Fargo’s “Earn More Mall” is accessible through the Wells Fargo account portal at Wells Fargo’s website.
U.S. Bank: U.S. Bank customers can find offers by signing into their accounts at U.S. Bank’s website.
HSBC: HSBC cardholders can use “HSBC Home&Away” by logging into their accounts at HSBC’s website.

4.7 Target Special Category Bonuses

Offers can change quickly and often. That’s why it’s important to stay alert to special category bonuses that your credit card company might offer for a limited time. These bonuses can significantly increase the points you earn on specific types of spending. For example, if your card offers a bonus like 5x points on dining during the summer months, make it a point to use this card when you dine out or order food. Additionally, some cards may offer increased rewards on categories like gas, groceries, or entertainment at different times of the year. Keeping track of these promotions and planning your spending around them can lead to substantial rewards accumulation. By aligning your purchasing habits with these temporary bonuses, you can make every dollar spent during these periods much more rewarding.

4.8 Use Points for Gift Cards When Boosted

It’s wise to keep an eye out for special promotions from your credit card company that allow you to redeem your points for gift cards at an increased value. These promotions can make each point more valuable than usual. For instance, during a promotional period, you might be able to exchange fewer points for gift cards of higher denominations. This could mean turning what is normally $1 per 100 points into $1.25 or even $1.50 per 100 points. By taking advantage of these offers, you effectively increase the purchasing power of your points. So, make it a habit to check for these boosts, especially around major shopping seasons like the holidays, when many issuers offer enhanced redemption options. Redeeming points for gift cards during boosted times is a smart move that can help you stretch your budget further, whether you’re buying gifts or simply treating yourself.

4.9 Schedule Purchases Around Reward Calendars

This credit card hack is about making the most of your credit card’s rewards, by planning your bigger purchases according to the reward calendar. Many credit cards offer higher points for certain categories during specific times of the year. For instance, if your card provides extra rewards for electronics in the first quarter, hold off on buying that new laptop or smartphone until then. Similarly, if there are increased rewards for home appliances or travel bookings in another part of the year, try to schedule your spending to coincide with these periods. This planning not only maximizes the rewards you earn but also helps you manage your budget more effectively. By syncing your purchase timing with these reward boosts, you ensure that every large expense brings you the maximum possible benefit.

4.10 Engage with Card Services

Regularly talking to your credit card’s customer service can be more beneficial than you might think. By staying in touch, you can learn about special promotions or extra rewards that aren’t widely advertised. Don’t hesitate to call or chat online with customer service to ask about any new opportunities for earning bonus points or to get updates on upcoming promotions. Also, if you ever face any issues with your card, like unauthorized charges or service glitches, discussing these with customer service might not only resolve the problem but could also lead to you receiving discretionary points as compensation. Additionally, expressing your loyalty and satisfaction with the card can sometimes prompt the service representative to offer you exclusive rewards as a thank you. So, make it a point to engage proactively with card services—it can turn into a rewarding experience.

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Once you’re done here, click the link to access Part 2 of this blog post series “Advanced Credit Card Hacks (Part 2): Maximizing Rewards for Business and Student Cards“. Learn how to boost rewards and unlock the secrets of high earnings business and student credit cards.