Cash back credit cards are among the simplest reward cards available. They give you a percentage of your spending back in cash, which can be applied as a statement credit, deposited into a bank account, or sometimes redeemed for other rewards. However, maximizing the value of these cards requires going beyond the standard 1% cash back rate on earnings and redemption. Here’s how you can achieve more:
1. Choose Cards That Earn More Than 1% on Everyday Spending
The key to maximizing cash back earnings is selecting cards tailored to your spending habits. Many offer more than 1% cash back in specific categories. Here are some standout options:
High-earning, No-fee Cards:
- Capital One Savor Cash Rewards Credit Card: unlimited 3% on dining, groceries, entertainment, and streaming.
- Chase Freedom Unlimited®: unlimited 3% on dining and drugstore purchases, 1.5% on everything else.
- Blue Cash Everyday® Card from American Express: 3% on U.S. groceries, gas, and online retail purchases (up to $6,000 per category per/year, then 1%).
- Bank of America® Customized Cash Rewards credit card: 3% on a category of your choice, like dining, travel, drug stores, gas, online shopping, etc. Note that Amazon is included in the “online shopping” category, making this a sound choice for your Amazon purchases. It also earns 2% back at grocery stores and wholesale clubs. The 3% and 2% categories are capped at $2,500 in combined purchases each quarter, then you earn 1%.
Annual Fee Cards with Top Rewards:
- Blue Cash Preferred® Card from American Express ($95/year): 6% on groceries (up to $6,000/year, then 1%), 6% on streaming, and 3% on gas.
Cards With Rotating and Flexible Spending Categories:
- Chase Freedom Flex®: 5% on quarterly rotating categories (up to $1,500/quarter).
- Citi Custom Cash® Card: 5% on your highest spending category each billing cycle (up to $500).
- Discover it® Cash Back: 5% on quarterly rotating categories (up to $1,500/quarter).
Flat-rate Cash Back Credit Cards:
- Citi Double Cash® Card: 2% on all purchases (1% when you buy, 1% when you pay).
- Capital One Quicksilver Cash Rewards Credit Card: 1.5% on all purchases.
By carefully selecting and combining these cards, you can earn boosted cashback across your most frequent spending categories.
2. Pair Cash Back Credit Cards with Premium Rewards Cards
Many cash back cards can be supercharged when paired with premium rewards cards from the same issuer. This strategy allows you to move your cash back earnings into a premium card’s reward bucket, unlocking higher redemption values or the ability to transfer rewards to travel partners.
Examples:
- Capital One Pairing: Use the Capital One Savor Cash Rewards Credit Card for high-earning categories (e.g., dining), then transfer cash back into a Capital One Venture Rewards Credit Card or Capital One Venture X Rewards Credit Card account. From there, points can be redeemed for travel at 1 cent each or transferred to airline and hotel loyalty partners for even greater value.
- Chase Pairing: Combine a Chase Freedom Unlimited® with a Chase Sapphire Preferred® Card or Chase Sapphire Reserve® . Cash back converts into Chase Ultimate Rewards®, which can be transferred to partners like Hyatt, United, and Southwest. Alternatively, book travel through Chase Travel at 1.25–1.5 cents per point (depending on the Sapphire card).
This approach effectively upgrades the value of your cash back rewards, turning them into flexible points worth significantly more when redeemed strategically.
3. Earn Boosted Cash Back with Bank Relationship Bonuses
Many banks offer bonus cash back rates to loyal customers with qualifying accounts or high balances.
- Bank of America Preferred Rewards: Cash back boosts range from 25% to 75% for customers who hold $20,000 to $100,000+ in Bank of America/Merrill accounts. For example, a 3% category cashback rate increases to 5.25% with the 75% bonus.
- U.S. Bank Smartly Visa: Earns 2% on all purchases, plus an additional bonus of 25%–100% based on the balance in your U.S. Bank accounts. A balance of $100,000 earns a 100% bonus, effectively doubling the base rate to 4%.
These programs reward long-term banking relationships and can add significant value to your cashback strategy.
Final Tips
To maximize cash back rewards:
- Use a combination of no-fee and premium cards to cover a variety of spending categories.
- Redeem points strategically, leveraging transfer partners and loyalty programs when possible.
- Optimize your bank relationships for bonus earning rates.
By thoughtfully integrating these strategies into your credit card usage, you’ll unlock far greater value from cash back credit cards than their standard offerings!
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