Redeeming Cash Back Points

Cash back cards are great for everyday spending. I think of it this way, you’re getting cash back or points for money you would have spent regardless. As long as you pay your credit card bill off in full every month, you’re going to take advantage of these rewards. As you know, if you pay your bills off in full, you’ll be able to avoid those pesky interest rate charges.

I’m going to show you today on how you can redeem your cash back points and how it all works. Since all credit cards are different, we are just going to create a fake credit card and show you the points redeeming process will work.

Let’s say you’re applying for a points-based credit card. A cash back and points based card are different but in the long run, you’re able to redeem it for some sort of cash reward.

Let’s look at the points based card that I’ve created:

For every purchase you make at a gas station, supermarket, drugstore = 3 points
For all other purchases = 1 point

Now, most credit card companies work the same when it comes to points redemption. You’ll be able to log into your account and see your point total. Companies like Citi(r) Bank will allow you to use those points for just about anything. From airline tickets to gift cards, you can get anything.

Let’s say your spending for a family of 4 looks like this for 3 months:

Gas purchases ($100/week) for 3 months = $1200 = 3600 points
Supermarket ($150/week) for 3 months = $1800 = 5400 points
All other purchases ($50/week) for 3 months = $600 = 600 points

Now, the spending up here looks like any typical family of four. The points up very quick just doing everyday spending and this doesn’t even include bills. Adding your bills to your credit card will rack up the points fairly quick as well. Now, for the total of 3 months, we’re going to have 9600 points.

Most credit card companies vary when it comes to using their points but for example, with one credit card company, you can get a $50 amazon.com gift card for as little as 5,000 points. So, for all of that spending, you’re able to get almost $100 worth of amazon stuff!

Cash back cards are a fantastic way to get cash back with your spending. Just be responsible and it’s like getting rewarded just for using your card.

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