What are cash back reward credit cards & how do they work?

Cash back reward credit cards can help you earn money back from nearly every purchase you make. To maximize your earnings, it's important to do research on which retailers and categories are eligible for cash back rewards on a given promotional cycle. Your credit card company or issuer may rotate eligible categories and may require you to activate the cash back participation feature on your account each month or quarter. Cash back reward programs tend to be flexible and allow you to earn a percentage of money back from everyday spending, travel and when shopping through participating retailers and merchants.

You may also want to be aware of some of the limitations, exclusions, and rules in order to maximize your points earnings and prevent any extra costs that may arise from interest rates on your credit card.

How can I get cash back from my credit card?

Shopping in certain categories or retailers may maximize your cash back earnings. Be sure to stay updated on any notifications or alerts on recent promotions or spending category updates from your credit card company.

Department store: You may be able to earn cash back points by making purchases from select department stores. Be sure to keep up with your reward program's list of participating stores and brands.

Grocery store: Some credit cards allow you to earn up to 5% cash back on grocery store purchases. Be sure to do research on which grocery stores are included in your card's cash back program since there may be specific supermarkets or stores that are excluded from cash back earnings or only eligible when specified during special promotions.

Travel and dining: Using your cash back credit card to book travel may help you earn a percentage of money back from airfare, hotel, and restaurants.

Select retailers: Keep an eye on rotating categories since this may change every promotional cycle. You may have the opportunity to earn cash back from specific retailers in addition to specific categories.

How many cash back points can I earn?

The amount of money you earn back may seem small, but it adds up over time. For example, if you are earning 5% back for every gas station, department store or grocery store purchase, you may see your cash back rewards increase with each billing cycle. In order to earn cash back points, you may need to spend within qualifying categories. Keep in mind that there may be limits or caps on how much cash back points you can earn within certain categories. You can learn more about category requirements or reward limits in your cardmember agreement or rewards portal.

The amount of money you earn through cash back rewards depends entirely on how much you spend and in what categories. For example, if you're a business owner charging $10,000 every year on gas and your gas rewards percentage is 4%, you could earn as much as $400.

Is it worth getting cash from my credit card?

Cash back points can be earned at your own flexibility. Your spending habits (in addition to your ability to minimize interest) may greatly influence how lucrative your reward earnings may be. To make your cash back points earnings worthwhile, you should aim to pay off your entire credit card balance each month to avoid interest charges.

When it comes time to redeem your cash back points, you may find redemption options that include gift cards to retailers and restaurants. You may also be able to redeem cash back reward points for discounts on hotel rooms and airfare.