Cards that offer cash back can be good boosts to your finances, particularly if you’re using them to buy things you would purchase anyway. You could think of it as a nice bonus.
“The biggest money-saving secret isn’t necessarily all about finding new tricks but instead looking at what rewards cards you have and making sure your spending behaviors align,” said MB Bell, a senior advisor at Valuedynamx who has worked in the loyalty and rewards industry for 25 years. “Don’t be afraid to ditch any cards that don’t offer meaningful rewards or rewards you don’t actually use.”
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Here’s a look at five ways your cash-back card can be a great money-saving secret.
Also see eight tips to save money every month without sacrificing your lifestyle.
1. Maximize Spending on Essentials
Cash-back cards that reward groceries, gas or utilities let you earn on the purchases you already make.
“In a tight economy, directing daily spending onto the right card is like giving yourself a quiet raise with cash back that cushions essentials without extra effort,” according to Christopher Stroup, founder and president of Silicon Beach Financial.
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2. Stack Rewards Smartly
Stroup noted that when combined with digital coupons or store loyalty programs, cash-back cards can multiply savings.
“The trick is strategy: aligning the right card with the right purchase category,” he said. “Done consistently, it’s not just pocket change, as it can mean hundreds in annual savings without lifestyle sacrifice.”
3. Use for Recurring Costs, Not Splurges
Charging recurring bills, like cellphone or internet service bills, to a cash-back card can create reliable rewards, but only if you pay in full each month, per Stroup. This turns fixed expenses into a built-in savings plan, without the debt risk that comes from using plastic for impulse buys.
4. Redeem Strategically
It’s also important to look at how to redeem strategically to ensure you’re maximizing the benefits.
“Many issuers let you redeem cash back as statement credits, direct deposits or even toward high-yield savings,” Stroup said. “Choosing the option that strengthens your financial plan like paying down debt or boosting emergency savings turns rewards from a short-term perk into a long-term money strategy.”
5. Treat Rewards as a Bonus, Not Income
Key to utilizing credit cards for cash-back rewards is to view the money as a bonus, not a part of income. Relying on cash back as income could put your finances in a tough spot later.
“Cash back isn’t a substitute for budgeting — it’s a boost. Viewing rewards as extra fuel for goals like travel, investing or paying down loans keeps you in control. The danger comes when people inflate spending just to chase points. Discipline makes rewards meaningful,” Stroup said.
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This article originally appeared on GOBankingRates.com: 5 Ways Your Cash-Back Card Could Be Your Money-Saving Secret Right Now
