Maximizing cash rebates with credit cards
You can combine different cash rebate credit cards in order to maximize any cash rebates that you earn. First, you will need to learn the different kinds of cash rebate credit cards.
First type is what I like to call the “no-frills, basic” cash rebate credit card. It will pay you one per cent standard on your spend.
The second one is your “everyday purchase” rebate card. It will pay you more than the standard one per cent on purchases such as those made at drugstores, gas stations, standalone supermarkets, which can be termed as everyday purchases. On any other purchases you will be paid the standard rate.
The third type of cash rebate credit cards is the “tiered rebate” cards. These will pay you more than the standard one per cent, but only after you spend more than a predetermined amount annually. Some will require you to carry some minimum balance if you want to earn some “maximum rebates”, while others will give you less than one per cent if you spend below some threshold.
Now, if you want to maximize your cash back then you will first have to understand that your spending is divided into one, “everyday purchases” and second, “other purchases.”
If you have a simple basic cash back card then you will earn no more than one per cent on your everyday purchases. Instead you can earn more than that by taking the “everyday purchase” card.
Sometimes, the tiered cash back cards are quite complicated. Hence, most people avoid using them. Nevertheless, there is one thing about these types of cards and that is that it causes you to get more than the standard one per cent rebate on your “other purchases”. You do not get this on your basic or “everyday purchase” cards.
Therefore, you can earn maximum by combining the “everyday purchase” credit cards with the tiered rebate card. This will earn you cash back on your everyday purchases as well as your other purchases.
However, you will have to fulfill their conditions first before you can earn any cash back. You will have to exceed their annual spending limit on your tiered card. However, once you do that, you will get cash back on all your purchases; on everyday purchases through the everyday purchase cash back card and on other purchases through the tiered rebate card.
This kind of earning strategy will not work for everyone. Those who do not use their credit cards a lot will have no benefit from such cards. The reason is that you will have to spend at least $6000 in order to earn any maximum rebates. Spending any less will only give you less than one per cent on the tiered cards.