How Do Credit Cards Give Cash Back?

Most credit card holders use their cards for making their everyday purchases. Credit card cash-back programs are a great way to earn rewards on the things consumers buy every day.

What Is a Credit Card Cash Back Program?

A credit card cash-back program is a type of rewards program that gives cardholders a percentage of their purchases back in the form of cash. Cash-back programs are usually tiered, meaning that cardholders earn a higher percentage back on certain categories of purchases, such as gas or groceries. Some programs also have bonus categories that change each quarter.

In order to participate in a cash-back program, cardholders must typically sign up for the program and activate it each quarter. Once enrolled, cardholders automatically earn cash back on eligible purchases. Many cards also offer sign-up bonuses for new members, as well as bonus cash back on specific categories of spending.

Cash-back programs are a great way to earn rewards on everyday spending, and they can be especially valuable to those who pay off their balances in full each month.

What Are the Benefits of Using a Credit Card Cash Back Program?

With most programs, cardholders earn a certain percentage of cash back on all of their credit card purchases. For example, they might earn 1% cash back on all of their purchases. When cardholders reach a certain amount of cash back, they can either redeem it for statement credits or for gift cards.

How to Maximize Rewards From a Credit Card Cash Back Program

To maximize rewards, it's important to understand how the program works and to use the card regularly. To earn the most cash back, cardholders should use their cards for all of their purchases, big and small. Taking advantage of bonus categories can help cardholders maximize their rewards and earn extra cash.

Finding the Best Credit Card Cash Back Program

Finding the best credit card cash-back program can maximize a consumer’s earnings. Prospective cardholders who take the time to do competitive research will find that their rewards will pile on higher over time simply by choosing a program that fits their spending habits. Those that are looking for the best cash back credit cards should consider the SoFi credit card.

SoFi is a financial services provider that offers a credit card that is ideal for saving, investing and paying down debt. Cryptocurrency enthusiasts can also take advantage of cash-back benefits. As per SoFi, "The SoFi Credit Card now lets you redeem points straight into crypto. You’ll earn 2% cash back on all purchases and can redeem it* directly into crypto with your SoFi active invest account."

Getting Started With Cash Back Today

Looking over each cash-back program’s terms and matching the cardholder’s spending habits to the highest-paying option can translate to hundreds, if not thousands, of dollars in earnings. Choosing the SoFi credit card offers flexibility and the added benefit of turning cash-back savings into cryptocurrency.

Photo: Blake Wisz, Unsplash