How to stack cards to get the most on your everyday spending

Running an errand to fill up your gas tank or restock your pantry may not be the most glamorous part of your day, but, with the right cash back card, you can make those everyday tasks much more rewarding.

Best credit card combinations for everyday spending

  • For maximizing points
  • For maximizing cash back
  • For Amex loyalists

There are many cash back credit cards that offer bonus rewards on everyday purchases such as gas and groceries. One of our favorites is the Blue Cash Preferred® Card from American Express, which gives you a whopping 6% cash back on U.S. supermarket purchases and (up to $6,000 in purchases per year, 1% thereafter), 6% cash back on select U.S. streaming services 3% cash back on transit and U.S. gas station purchases and 1% cash back on everything else.

The card does charge an ongoing $95 annual fee ($0 introductory annual fee for the first year), but we think that fee is well worth it if you want to earn the most cash back on your everyday spending. We figure that the average shopper who spends $15,900 on the card would earn around $323 in cash back each year.

Combination one: Maximizing points

The Chase Freedom Unlimited® is another great card to pair with the American Express Blue Cash Preferred card. Just like the Cash Magnet card, it offers at least 1.5% cash back on every purchase. However, the rewards that you earn with the Freedom Unlimited card are a little more versatile than the Cash Magnet card and it comes with additional cash back categories: 5% on Chase Ultimate Rewards travel, plus 3% on dining and drugstore purchases. You can transfer them to certain Chase Ultimate Rewards cards, including the Chase Sapphire Preferred® Card, which awards a 25% bonus on those points when you redeem them for travel for the Chase Ultimate Rewards portal.

If you prefer to earn points rather than cash back on purchases that fall outside the Blue Cash Preferred card’s bonus categories, Ultimate Rewards cards are a great way to go:

Estimated yearly rewards: Amex Blue Cash Preferred + Chase Freedom Unlimited

Combined Rewards Average Rewards Rate Estimate cash back earned (after ongoing annual fee)
  • 6% U.S. supermarkets (up to $6,000 in purchases, 1% thereafter) with the Blue Cash Preferred card
  • 6% select U.S. streaming services with the Blue Cash Preferred card
  • 5% Chase Ultimate Rewards travel with the Freedom Unlimited card
  • 3% dining and drugstore purchases with the Freedom Unlimited card
  • 3% transit & U.S. gas stations with the Blue Cash Preferred card
  • 1.5% other purchases with the Freedom Unlimited card
3.49% $459.91

Combination two: Maximizing cash back

If you prefer cash back rewards and want to earn the most cash back possible, the Citi® Double Cash Card and the Blue Cash Preferred cards is one of the ultimate card pairings. The Citi Double Cash card offers up to 2% back on every purchase – 1% when you make the purchase and another 1% when you pay your bill on time.

Combined with the Blue Cash Preferred card, the Citi Double Cash card pushes the rewards rate to 3.19% cash back for the average cardholder. We figure that a cardholder who spends around $15,900 per year on these two cards can earn nearly $412 in cash back per year.

Estimated yearly rewards: Amex Blue Cash Preferred + Citi Double Cash

Combined rewards Average rewards rate Estimated cash back earned (after ongoing annual fee)
  • 6% U.S. supermarkets (up to $6,000 in purchases, 1% thereafter) with the Blue Cash Preferred card
  • 6% select U.S. streaming services with the Blue Cash Preferred card
  • 3% transit & U.S. gas stations with the Blue Cash Preferred card
  • 2% other purchases with the Citi Double Cash card (1% when you buy, 1% as you pay)
3.19% $412

Combination three: Amex all the way

If you love American Express cards, or you just want to keep things as simple as possible for yourself by sticking to a single issuer – the American Express Cash Magnet® Card* that offers 1.5% cash back on every purchase makes a great partner to the Blue Cash Preferred card.

By swapping in the Cash Magnet card to earn 1.5% cash back on purchases that don’t qualify for a bonus with the Blue Cash Preferred card, the average cardholder can push their cash back rate to 2.91%, amounting to $368 in cash back with $15,900 yearly credit card spend.

Estimated yearly rewards: Blue Cash Preferred + Amex Cash Magnet

Combined rewards Average rewards rate Estimated cash back earned (after ongoing annual fee)
  • 6% U.S. supermarkets (up to $6,000 in purchases, 1% thereafter) with the Blue Cash Preferred card
  • 6% select U.S. streaming services with the Blue Cash Preferred card
  • 3% transit and U.S. gas stations with the Blue Cash Preferred card
  • 1.5% other purchases with the Cash Magnet card
2.91% $368

Other tips for stacking cards

Make it a trio of cards

You can further increase your earning rate by adding in an additional card that offers a bonus on other categories of purchases. For instance, you can earn 3 points per dollar on dining purchases with the Chase Sapphire Preferred card.

Use the right card for each category of spend

Stick to using your Blue Cash Preferred card for U.S. supermarket, select streaming, transit and gas station purchases. The card’s rewards rate on the rest of your purchases is low – only 1% cash back – so try to rotate in a card with a higher rewards rate for the rest of your purchases.

Max out the 6% bonus category

To get the most out of the Blue Cash Preferred card, you need to use up every dollar of spend for the 6% bonus category. The card cuts you off at $6,000 in purchases per year for the 6% bonus rate – that’s only $500 in grocery spend per month, which we think is a pretty manageable amount for the average family. However, if that’s outside your food budget, you might think outside the box and look for other items that you can purchase at the supermarket, which brings us to our next suggestion:

Buy gift cards

If you’re full up on groceries, many supermarkets will allow you to purchase gift cards with your credit card. You can stock up on restaurant, Best Buy or Amazon gift cards with your Blue Cash Preferred card to earn 6% cash back.

Switch to another card once you’ve hit the $6,000 spending cap

Keep close tabs on your supermarket purchases with the Blue Cash Preferred card. Once you hit the $6,000 spending cap, switch over to another credit card for your grocery purchases (such as the Cash Magnet card or the Citi Double Cash card) to earn a better rate than 1% cash back.

Bottom line

With the right credit combination, you can earn hundreds of dollars in rewards on your everyday purchases. While the average cash back card earns a mere 1.5% cash back, you can easily double that amount by pairing the right cards – not a bad incentive for running errands!

*All information about the American Express Cash Magnet® Card has been collected independently by CreditCards.com and has not been reviewed by the issuer.

Source: creditcards.com

Citi Custom Cash vs. Bank of America Customized Cash Rewards card

The Citi Custom Cash℠ Card and Bank of America® Customized Cash Rewards credit card are two cash back credit cards that offer a unique way to earn rewards. Instead of earning specific rates in specific categories, you decide which categories earn you bonus cash back. This is a great feature because it puts you in control of earning extra rewards through your credit card spending.

Citi Custom Cash vs. Bank of America Customized Cash Rewards

To help us compare some of the key features of the Citi Custom Cash card and the Bank of America Customized Cash Rewards card, the key highlights are included in this table:

Card

Citi Custom Cash℠ Card

Citi Custom Cash℠ Card

Bank of America® Customized Cash Rewards credit card

Bank of America® Customized Cash Rewards

Rewards rate
  • 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, then 1%
  • 1% cash back on all other purchases
  • 3% cash back in one category of your choice (gas, online shopping, dining, travel, drugstores, or home improvements and furnishings)
  • 2% cash back on grocery store and wholesale club purchases
  • $2,500 combined spend limit on 2% and 3% categories each quarter
  • 1% cash back on other purchases
Welcome bonus $200 (20,000 ThankYou points) after spending $750 in first 3 months of account opening $200 if you spend $1,000 in first 90 days of account opening
Annual fee $0 $0

Earning cash back

Both the Citi Custom Cash card and the Bank of America Customized Rewards card allow you to earn cash back after spending on the card. Both cards also allow you some control over the categories where you’ll get bonus rewards.

Regular rewards

The Citi Custom Cash earns 5% cash back on purchases in your top eligible spend category each billing cycle, on up to the first $500 spent, then 1% cash back. All other purchases earn 1% cash back.

There are other cards that offer 5% cash back, but most of those have rotating quarterly categories set by the credit card issuer, such as Discover’s rotating bonus categories. Some quarters, it might work great for you, but in other quarters you might find it hard to get much benefit. The Citi Custom Cash card is the first card that offers 5% cash back on the category in which you spend the most. You don’t need to set your 5% category through your account – you’ll automatically earn 5% cash back on purchases in whichever category you spend the most that month, on up to $500 in spending.

It’s important to note that the cash back you earn with the Citi Custom Cash is paid in the form of ThankYou points. This makes the Citi Custom Cash card even more exciting due to the flexibility of ThankYou points. You can always redeem your ThankYou points for cash at a rate of 1 cent per ThankYou point, but you can also combine your ThankYou points with points earned from other Citi credit cards (like the Citi Premier® Card) for added value, and then redeem them by booking your next trip on the ThankYou rewards center.

On the other hand, the Bank of America Customized Rewards card allows you to choose which category earns bonus rewards. You’ll earn 3% cash back on a category of choice (gas, online shopping, dining, travel, drugstores or home improvements and furnishings), 2% cash back on grocery store and wholesale club purchases and 1% cash back on other purchases. But there’s a catch: the 2% and 3% bonus categories are limited to a combined total of $2,500 in spending each quarter.

The Bank of America Customized Cash card is also part of Bank of America’s Preferred Rewards program. This can be a way to supercharge the rewards rate you earn with your credit card. How much cash you have in deposit with either Bank of America or Merrill affects your Preferred Rewards program tier, which in turn could boost your rewards rate.

Those who qualify for the highest tier, the Platinum Honors level, must have at least $100,000 on deposit, but they get a 75% bonus on all cash back they earn with the Customized Cash Rewards card. That means you’ll essentially earn 5.25% cash back in the category of your choice and 3.5% at grocery stores and wholesale clubs.

Sign-up bonus

When comparing the Citi Custom Cash versus the Bank of America Customized Rewards cards, the two cards have very similar sign-up bonuses.

The Citi Custom Cash is currently offering $200 (awarded as 20,000 ThankYou points) after spending $750 in the first three months of having the card.

The Bank of America Customized Rewards has a welcome offer of $200 if you spend $1,000 in the first 90 days of having the card.

While the spending threshold on the Bank of America Customized Rewards card is slightly higher, both welcome offers give the same bonus amount and relatively easy to obtain.

Redeeming cash back

Both the Bank of America Customized Rewards card and the Citi Custom Cash card allow you to redeem your cash back for checks, direct deposit or as a statement credit. Getting your cash as a statement credit is probably the simplest way to redeem your rewards, and there is no minimum amount to redeem for a statement credit.

As we mentioned earlier, with the Citi Custom Cash card, your cash back is actually paid out in the form of Citi ThankYou points. You can combine the ThankYou points you earn using the Custom Cash card with ThankYou points you earn with other Citi credit cards like the Citi Premier. This opens up another avenue to redeem the rewards you earn. At a rate of 1 cent per point, you can use your ThankYou points for travel or transfer them to Citi’s hotel and airline travel partners.

Since the Citi ThankYou points can be redeemed in a variety of ways, they are slightly more valuable than the Bank of America Customized Rewards’ cash back that are limited to only a few redemption options.

Other perks

The Citi Custom Cash card and Bank of America Customized Cash Rewards card are both very basic credit cards. They do not have a ton of other perks and benefits. One great feature is that both cards come with no annual fee. The Customized Cash Rewards card does offer an introductory 0% APR for 15 billing cycles for new purchases as well as balance transfers made within 60 days of opening the account, then 13.99% to 23.99% variable APR thereafter.

The Citi Custom Cash also offers a 0% intro APR for 15 months on both new purchases and balance transfers, as long as the balance transfers are performed in the first four months of account opening. Then the regular APR will be a variable 13.99% to 23.99%.

Citi Custom Cash Card: Best for lower spenders or those with very focused spending

The 5% cash back you earn with the Citi Custom Cash is limited to only the first $500 in spending each month. Any spending above that amount or in categories other than the one in which you spend the most only earns 1% cash back. Since 1% cash back is a fairly low cash back rate, it makes sense to focus your spending on the Custom Cash card in only one category each month, up to the $500.

Others who might consider the Citi Custom Cash card are those who have several different credit cards. If you plan to pair several credit cards, it may not be a big deal to spend in one category on the Citi Custom Cash card each month to snag the 5% rewards. If you can maximize the 5% rewards category each month, that’s an extra 30,000 ThankYou points or $300 each year.

Bank of America Customized Cash Rewards: Best for those with large deposit or investment accounts

Because of the power of the Bank of America Preferred Rewards program, the Bank of America Customized Cash Rewards is best for those who can deposit at least $100,000 with either Bank of America or Merrill. This will give you Platinum Honors status with Preferred Rewards and a 75% bonus on all rewards that you earn with the Customized Cash Rewards credit card. You’ll then earn 5.25% cash back in the category of your choice and 3.5% at grocery stores and wholesale clubs.

Even if you don’t have $100,000 to put away in a Bank of America account, at least $20,000 or $50,000 will also respectively qualify you for the Gold or Platinum tier. Though the increased rewards on those are lower, at 25% for Gold and 50% for Platinum, the Preferred Rewards does make the Customized Cash Rewards a more attractive option. If you don’t participate in the program at all, you only earn 2% and 3% in qualifying categories up to $2,500.

Bottom line

The Bank of America Customized Cash Rewards and Citi Custom Cash cards are both cash back credit cards that allow you to choose the spending categories where you can earn bonus rewards. If you know exactly which category you spend the most in, gas or dining or online shopping, the Customized Cash Rewards might be the better move – especially if you already have a good sum in a Bank of America or Merrill account to help boost your rewards.

For those who don’t spend as much or use multiple credit cards at a time to maximize rewards, the Citi Custom Cash card is also an excellent choice. Though the spend limit for the 5% cash back is rather low at $500, the Citi ThankYou points may be redeemed in so many ways, it gives the Custom Cash an extra edge in the competition. Both cards come with no annual fee, making them excellent cash back cards to consider. Which one is right for you will depend on your own specific spending habits.

Source: creditcards.com

The 3 types of cash back credit cards: Which one is right for you?

Getting ahead with a credit card may seem like a pipe dream, but there are plenty of people who rack up hundreds (or even thousands) in rewards without piling up debt. The key to maximizing cash back credit cards is simple – charge only planned purchases you can afford to pay off each month and never, ever carry a balance.

Cash back credit cards reward consumers with “free” cash back for each dollar they spend. This cash back is added to their rewards account when they use their credit card to pay for purchases, usually as a percentage of each dollar spent. Typically, cardholders can redeem their cash back for a check in the mail, statement credits to their account, gift cards and other options.

Factors to consider when choosing a cash back credit card

If a cash back credit card seems like what you’re after, you still have some important decisions to make. The first one is deciding on the type of cash back credit card that might serve you best by considering these factors:

A flat-rate cash back credit card offers one rate of rewards on everything you buy. For example, a rewards credit card with a flat rate might offer 1.5% back or 2% back for each dollar spent, then offer the option to redeem for statement credits, a check in the mail, gift cards or more.Generally speaking, flat-rate cash back credit cards are best for people who don’t want to deal with rotating rewards categories or earning caps.

Rewards credit cards with fixed bonus categories offer a higher fixed rate of rewards in some categories and a standard rewards rate on everything else. For example, you might earn up to 6% back on grocery store purchases, or a higher-than-average rate on dining or transit. In the meantime, you would still earn a standard rate on everything else you buy, usually 1%. Fixed bonus category cards are best for people who spend a lot in specific categories and want to maximize their rewards as a result.

Cash back credit cards with rotating categories also offer a flat rate of rewards for each dollar you spend, usually 1% back. Typically, cards with rotating categories let you earn 5% back on up to $1,500 spent in specific categories each quarter when you activate, after which you earn 1% back. Also, note that some have other bonus categories in which you can maximize rewards throughout the year. Like other cash back credit cards, rotating bonus category cards tend to offer welcome bonuses, 0% APR offers or both.

How to choose the best cash back credit card

Since credit cards with cash back can be so different, consider what would work best for your spending habits by thinking long and hard about the following:

Spending habits

Your spending habits should play a significant role in the cash back credit cards you ultimately sign up for. If you happen to spend a lot of money in categories like dining out, groceries or gas station purchases each month, for example, it wouldn’t make sense to skip over cards that offer a lucrative rewards rate on this spending.

If you aren’t entirely sure which categories you spend the most in right now, it can help to track your spending for a few weeks to see where your money goes. If you use a credit card already, you can look over your statements to see which categories you tend to spend the most in.

Rewards rate

Even if you decide on a specific type of cash back credit card, you’ll find that some offer a better rewards rate than others. For example, there are flat-rate credit cards that only offer 1.5% in cash back for everything you buy, but you’ll also find cards that give you 2% back with no annual fee.

Obviously, you should focus on rewards credit cards that offer the highest rate of cash back possible, whether you’re looking for a card with a flat rate, bonus categories or rotating bonus categories. For example, you may find a card with bonus categories that make sense with your lifestyle, then still pick up a 2% cash back credit card to use for miscellaneous purchases and bills.

Rewards limits and caps

Also, note whether rewards credit cards you’re considering set limits on how much cash back you can earn. Some of them do, and these limits are worth tracking if you’re someone who spends a lot with plastic every month.

For example, credit cards that offer 5% back on up to $1,500 in spending each quarter only let you earn $75 in bonus cash in rotating categories every three months. This doesn’t mean they’re not useful; you just need to know the limits you’re dealing with and how they can impact your rewards over time.

Redemption options

Finally, you should figure out how you can redeem rewards with the cards you’re most interested in. While some cash back credit cards offer a plethora of rewards options, others only let you redeem your cash back for statement credits to your account.

There is no right or wrong answer here; your rewards redemptions should suit your personal preferences, and that’s all that matters. If you want some flexibility, look at cash back credit cards that let you redeem for at least two or three options including gift cards, travel, merchandise, cash back and statement credits.

Should you get multiple cash back credit cards?

First, know that you don’t have to limit yourself to just one. There are plenty of consumers who successfully manage multiple cash back credit cards, which they use to maximize rewards in different categories as well as on miscellaneous purchases. With the right credit combination, you can earn hundreds of dollars in rewards on everyday purchases – and easily double your cash back reward.

Bottom line

Cash back credit cards really do offer the prospect of “something for nothing,” but you’ll benefit only if you are disciplined enough to avoid debt. Make sure you have a plan in place to earn rewards responsibly, and that you have an idea of the type of card you want to sign up for.

With some research and planning, you can earn cash back in no time.

Source: creditcards.com

Money-saving tips for hosting family for the holidays

The holiday season is all about spending time with family and making memories. It can also mean spending money if you’re hosting relatives in your home.

Putting these money-saving tips to work can make the time together with family over the holidays more enjoyable, without it being a drain on your finances.

See related: How to navigate the 2021 holiday shopping season

Create a budget for holiday spending

  • Prepare early
  • Match holiday budget categories to the right rewards card
  • Take advantage of Q4 rotating category bonuses
  • Scrutinize retail store rewards cards closely
  • Stack rewards to cash in on more holiday savings
  • 1. Create a budget for holiday spending

    As soon as family or friends announce their intentions to pay a holiday visit, it’s time to start thinking about your budget.

    “If you have company coming over or staying for an extended period of time during the holidays, you may want to please every
    but don’t get carried away,” says Rebecca Gramuglia, personal finance expert at TopCashback. The goal should be to create a budget that doesn’t require you to spend beyond your means.

    As you work out a budget that includes hosting family or friends for the holidays, make sure you cover all the bases. That includes:

    • Food and drinks to have at home
    • Dining out
    • Gifts and decorations
    • Holiday activities or entertainment
    • Gas or local transportation
    • Increased utility costs

    Deacon Hayes, finance expert and founder of Well Kept Wallet, suggests being clear on how many people are coming and how long they’ll be staying with you. This can help with planning out gifts, activities and meals, which makes it easier to pinpoint how much money you need to budget for a family get-together.

    buying groceries either.

    Of course, eating out is also an excellent option. In fact, dining out may even turn out cheaper for those of you with large families. For those who like to eat in the comfort of their own home during the holidays, plenty of cards have benefits on delivery apps or meal kits.

    In fact, when you use the Capital One SavorOne Cash Rewards Credit Card you’ll earn unlimited 3% cash back on dining and grocery stores, with $0 annual fee. Another contender is the Chase Sapphire Preferred Card that earns 3X points on restaurants, plus includes a free subscription to DashPass for one year.

    Stay in or paint the town

    With the focus on food and gifts during the holidays, what will you and the family do to spend time together? Don’t feel pressured to spend on this. Get creative by breaking out the board games and puzzles you already have at home to bond with family or throw a holiday movie night with microwave popcorn, smores and any streaming service. Your kids getting antsy during the holidays? Go on a drive to see some Christmas lights around the neighborhood.

    If you really love popular entertainment, check out the Citi Premier® Card. With it, you can easily rack up ThankYou points, which can be redeemed with Citi Entertainment®, giving you access to presale tickets and exclusive experiences like concerts and sporting events.

    2. Prepare early and for the worst

    By now, you must have heard plenty of news about supply chain issues and delays in shipping and logistics. As such, retailers have expected delays in all goods in the U.S. for months now, and these expectations are fast becoming true. Bloomberg reported that some of the biggest retailers like Target and Walmart have put money toward easing the process, but these extra expenses may result in fewer discounts during the holiday season.

    To avoid having your presents stuck in transit, try your best to shop as early as possible for your holiday needs, whether it be nonperishable ingredients for meals or gifts for your loved ones. Though you naturally plan presents around sales, you could do the same for holiday meals as well. Rather than a massive roast turkey, a nice roasted hen sounds equally delicious. You could also try shopping at small businesses, to both support the local community and switch up the kinds of gifts you usually give out.

    3. Match holiday budget categories to the right rewards card

    Saving money on holiday spending can be as simple as using your credit card for everyday items like groceries or gas when family is in town, says Gramuglia.

    “If you’re showing family members local attractions or taking day trips, you’ll be driving around a lot,” she says. “Plus, everyone is going to be hungry, so saving money on groceries is essential.”

    But don’t settle for using any cash back card when paying for meals, gas or holiday fun with the family. Pick and choose the cards that land on the nice list for paying you back the most rewards.

    If you need cash back on groceries and gas, you might try:

    • Blue Cash Preferred® Card from American Express: Earn 6% cash back at U.S. supermarkets, (on up to the first $6,000 in purchases each year), then 1%.
    • Bank of America® Customized Cash Rewards credit card: Earn 3% cash back in the category of your choice (including gas) and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in each quarter.

    Nermeen Ghneim, owner of personal finance blog Savvy Dollar, says while cash back cards are generally best for holiday spending, you shouldn’t count out cards that offer points or miles instead.

    For example, the American Express® Gold Card offers 4 Membership Rewards points per dollar spent on dining and on the first $25,000 in purchases at U.S. supermarkets each year (then 1 point). If you’ve got a big trip planned in the new year, you could charge holiday dinners or grocery shopping to your card, then use them to book through AmexTravel.com.

    Best ways to spend American Express points

    4. Take advantage of Q4 rotating category bonuses

    If you have the Discover it® Cash Back or Chase Freedom Flex℠ cards in your wallet, double-check your cash back calendar to see which purchases qualify for a fourth-quarter bonus.

    Here’s what Discover and Chase are offering bonuses for in the fourth quarter of 2021:

    • Discover categories include Amazon.com, Target and Walmart.com – enroll to earn 5% cash back on up to the first $1,500 in combined purchases (then 1%).
    • Chase Freedom Flex categories include Walmart.com and PayPal – 5% cash back on up to the first $1,500 in combined purchases (activation required), then 1%.

    If navigating bonus categories only adds to your holiday stress, consider a flat-rate cash back card instead.

    “For example, you could use one like the Citi® Double Cash Card,” says Hayes, which offers 1% cash back as you charge purchases and 1% cash back as you pay them off.

    This kind of flat-rate card can be good for charging things like holiday decorations or your utility bills and getting more than just 1% back on those purchases. Hayes says if you’re using cash back cards or any other type of credit card for holiday spending, plan to pay the balance in full or as quickly as possible to minimize interest charges.

    survey by CreditCards.com found nearly seven out of 10 people applied for retail credit cards on an impulse at checkout. While it is enticing to sign up for a credit card at your favorite retail store in order to claim a reward at checkout, it is important to keep in mind they usually come with higher APRs than non-retail cards. The average retail card APR is 24.35%, while the average non-retail card APR is 19.92%, potentially setting up shoppers for a painful bill if they carry a balance on their cards.

    At the same time, a store credit card that offers generous cash back rewards can help you save on holiday expenses, as long as you pay your balance in full at the end of the month.

    “I do a lot of shopping online, so the Capital One Walmart Rewards® Mastercard® and the Amazon Prime Rewards Visa Signature* card are my top earners,” says Ghneim. “Each earns 5% back on purchases.”

    The catch is that these cards only earn that rewards rate at their respective brands. Whole Foods purchases made with the Amazon Prime Rewards Visa are, however, an exception – those also earn 5% cash back. Purchases made through Walmart.com must be for grocery pickup or delivery in order to qualify for 5% cash back, while purchases made in-store qualify for only 2% cash back.

    Also, consider how you can redeem rewards earned with a store card.

    Walmart and Amazon give you more redemption options, including gift cards and travel.

    Other store-branded cards, however, may only allow you to redeem your rewards on future purchases. Not to mention, these cards can carry higher APRs compared to a traditional cash back rewards card.

    6. Stack rewards to cash in on more holiday savings

    There are several ways to add to your savings during the holidays, across virtually every spending category. Here are four more money-saving tips to try when family comes to town:

    To stack savings on groceries:

    “Be sure to take advantage of digital coupons available in your grocery store app,” says Ghneim. “Stack that with cash back from grocery store apps like Ibotta and Fetch Rewards.”

    If your grocery store has a loyalty rewards program that offers points toward purchases or exclusive discounts, sign up for that as well. And check to see if your preferred store accepts competitor coupons for additional savings.

    To stack savings on entertainment:

    “Try seeing if you can score tickets for a show or event for cheaper with sites like Groupon,” says Gramuglia. Then use a card like the Capital One SavorOne Cash Rewards Credit Card to earn 3% cash back on those purchases respectively.

    To stack savings on shopping:

    Cash back sites like Rakuten and TopCashback can help increase cash back earnings when you shop in-store or online with a linked cash back rewards card.

    “Be on the lookout for double and triple cash back from Rakuten to maximize your rewards,” says Ghneim.

    You can also stack savings by taking advantage of card-linked offers, which are exclusive savings deals that are linked to your rewards card. If you have an American Express or Chase rewards credit card, check out the linked offers on tap at Amex Offers and Chase Offers.

    To stack savings on dining:

    If you know you’ll be dining out with family, sign up for an app like Dosh, which lets you earn up to 10% cash back automatically when you pay with your linked card. Join restaurant loyalty programs to get rewards or coupons you can use to save on family meals during the holidays.

    Bottom line

    Even with the threat of supply chain shortages and the lure of Black Friday sales, don’t feel compelled to spend more than you need to when celebrating the holidays with your loved ones. And since you’ll be paying for food and gifts one way or another, you might as well use your credit cards to your advantage to maximize rewards. Above all, remember to stick to your set budget to avoid incurring debt so that you can embrace 2022 with a good handle on your finances.

    *All information about the Amazon Prime Rewards Visa Signature Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. 

    Source: creditcards.com

    Cash back credit cards: How do they work?

    What could be easier than getting a little money back on the things you buy every day? That’s how cash back credit cards work and what makes them appealing to some consumers.

    Cash back cards come in a variety of flavors – bonus category, tiered rewards and flat percentage cash back – but they all pay you back. Flat percentage cash back cards are ideal for the “set it and forget it” crowd, but bonus category and tiered rewards cards can offer more rewards – if you’re willing to put in a little legwork to maximize your cash back in select spending categories.

    How cash back cards work

    So how do all of these cash back cards work? It’s simple: Cash back is essentially a rebate of a percentage of the purchases you make on the card. With flat-rate cash back credit cards, every purchase earns the same percentage cash back, while with category bonus cards and tiered bonus cards, different types of spending earn more cash back.

    Card issuers can afford to pay cash back because merchants pay an interchange fee on each transaction. “When you pay a merchant $100 with a credit card, the merchant only receives about $97,” says Daniel Mahoney, a certified financial planner in Atlanta.

    For example, a TV that costs $700 would net you $14 with a 2% cash back card. The merchant, meanwhile, paid a transaction fee of around $21 when you paid with your credit card.

    “Rewards or rebates may also be funded by deals between the credit card issuer and specific merchants,” Mahoney adds. An example of this is cash back earned through card-linked offers.

    How do card issuers know what types of spending qualifies for which percentage of cash back? Merchant category codes are four-digit numbers denoting a business type, such as a gas station or grocery store. Merchant category codes are used by credit card networks to categorize and track purchases.

    How to earn cash back

    There are three main types of cash back credit cards: Category bonus cash back cards, which offer a high cash back rate in spending categories that change throughout the year; tiered rewards cash back cards, which offer consistent cash back in specific categories of spending; and flat-rate cash back cards, which get you cash back at the same rate on all purchases.

    Category bonus cash back cards

    Category bonus cash back cards offer the lure of 5% cash back from revolving spending categories. These categories are typically set by the issuer every quarter and are usually released a few months before the new quarter starts. Five percent back can be a nice haul if you’re able to max out the spending categories each quarter, but it takes a bit of work.

    First, you have to register for the bonus categories every three months, and spending in the categories is capped at a set amount each quarter (typically $1,500 in purchases). Since any purchase not in the bonus category earns 1%, you may not be getting the average return you think you are.

    Tiered rewards cash back cards

    Like category bonus cards, tiered rewards cards offer more cash back in select spending categories, but to maximize your earnings you have to think about which card to use with each purchase.

    There is a wide variety of categories for which you can earn that 5%, including restaurants, gas stations, grocery stores, select travel and transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment.

    Flat-rate cash back cards

    With simple cash back cards, also called flat-rate cash back cards, you earn a flat percentage with every purchase. There’s no need to track and activate bonus categories. You earn the same cash back on every purchase.

    Bottom line

    Whether you opt for a flat-rate, tiered rewards or category bonus cash back card, you can enjoy earning cash back on all (or nearly all) of your purchases, often with minimal effort.

    You may be surprised at just how much 1% or more cash back adds up to at the end of each month. Just be sure to take a close look at your spending habits and each issuer’s terms to be sure the cash back card you’re considering is a good fit for you.

    Source: creditcards.com