If you’re going to use a credit card, you might as well get paid for it, right?
With a cash-back rewards card, you get money back every time you make a purchase — usually as a percentage of how much you spent.
That means if you charge $60 on a card offering 2% cash back, you’ll get $1.20. That doesn’t seem like a lot but think about how much you can earn if you make bigger and more frequent purchases.
The best part: Once you get it, the money’s yours to use however you like. Many people use their cash-back rewards to score travel miles or gift cards. But the advantages don’t stop there. Here are four cool ways you can use your cash-back rewards and rebates for your — and your bank account’s — benefit.
Reap all the rewards
Getting a rebate each time you use your credit card is enticing enough. But, depending on your bank or credit card issuer, you might be able to get your hands on a number of other perks and discounts.
Many cards offer sign-up bonuses and no annual fees. Some offer discounts, bonuses and points if you shop with certain online retailers, like Amazon or Target, or merchant apps, like Starbucks or Uber. Others offer cash back on mobile wallet purchases from Google Pay or Apple Pay. And there’s at least one cash-back card that offers protection against damage or theft of your cell phone.
The key to getting the most of out of your rewards is doing your homework. As you’re searching for cards, keep an eye out for special features that suit your lifestyle and spending habits. You can start comparing top cash-back credit cards here.
Donate to your favorite charity
Maybe you want to donate to a charity you love but struggle to find the extra money in your budget. Enter the cash-back rewards card.
Lots of card issuers let cardholders donate their cash-back rewards to a charity or cause of their choosing. Check the card company’s website to find donation options or consider getting a charity-branded credit card that automatically funnels cash rewards to the organization every time you make a purchase.
Just be sure to review how your card issuer treats charitable contributions. Some have no restrictions on donating, while others require cardholders to earn a minimum number of points on their cards first.
Lower your credit card bill
Remember, cash-back rewards cards are still credit cards, meaning each time you use them, you have to pay off the balance. Why not use the cash you’re already earning to shave a bit off your next bill?
Many cash-back rewards cards let you apply a statement credit to your monthly balance. Let’s say you have a $150 balance on your credit card, but you’ve earned $15 in points on your card. Using the statement credit reduces that balance to $135, which can make a substantial difference if you’re looking to make more room in your bank account.
Save or invest
Extra money is the biggest draw to getting a cash-back credit card. But, if you’re in no hurry to spend it, that additional income can help you accomplish some other financial goals, such as building your savings or jumpstarting an investment account.
And while words like “save” and “invest” may not get your blood pumping, seeing more money in your savings account or a major return on your investment just might.
Want to find a rewards card that pays you with perks, points and discounts? Go to Compare Cards by LendingTree and shop for the best in cash-back credit cards.