Imagine someone paying you to shop. Well, that’s essentially what happens when you use shop-and-earn schemes. Credit card companies and other outfits offer numerous perks to incentivize you to use their cards and spend more.
However, for best results, you need to game the system. Yes, spending a lot of money on your cards will unlock substantial rewards, but you want to do it in a way that benefits you the most.
So, what’s the optimal strategy? That’s what you’re about to find out. Keep reading to learn how to level up your cash-back bonus offers and get more from shop-and-earn schemes.
Look At Your Spending Habits And Check Them Against Annual Card Fees
The first step is to explore your spending habits and see how you use your money right now. Writing everything down and understanding the big picture is helpful when choosing the most suitable credit card.
The most straightforward approach is to use the app attached to your credit card. These break down expenses into categories, such as travel, household bills, and entertainment. You can also use a pen and paper and do it manually.
Once you have an amount, you can ask whether a specific credit card is worth the annual fee. A low card spend could mean you don’t make enough money through cash-back bonuses to justify the subscription.
Choose A Card With A Decent Sign-UP Offer
Next, you’ll want to choose a card with a decent sign-up offer. These can help you decide between products offering similar rates.
Most sign-up offers work in the same way. You get cash back when you spend a certain amount within a given timeframe. If you don’t reach the threshold, no bonus cash back.
For example, some lenders will offer $200 cash back after spending $500 on purchases over the first three months. Others require you to pay more, but the bonuses are bigger. For example, a credit card might ask for $6,000 on purchases in the first three months in exchange for a $900 bonus cash back. You’ll want to choose which balance is right for you.
Take time to go through the deals to see which suits you best. Credit card companies change them all the time to stay competitive and offer the most enticing rewards.
Find Cards That Offer Cash Back In Your Spending Categories
Another pro tip for maximizing cash-back bonus offers is to get credit cards that offer money back in the spending categories you use most, for example, travel, entertainment, and groceries. (You should already know these if you completed step one above).
For example, if you spend a lot of time driving your car around, you might want a credit card with rewards for using it at gas stations. Likewise, if you make a lot of purchases on Amazon, you might want a card that rewards online purchases.
You can also find some cards offering cash back on non-category purchases. For example, the Discover it Cash Back scheme gives you 1 percent cash back on all purchases and up to 5% in ongoing active categories for bigger rewards.
The Chase Freedom Flex card is interesting because it changes cash back bonus offers every quarter to a different sector without an annual fee.
On the positive side, it means you can get cash back on purchases across sectors throughout the year, allowing you to take advantage of opportunities when they arrive. On the downside, you may need to wait for rewards on big purchases in some areas, such as travel.
Use Cash Back Apps
However, credit cards aren’t the only bonus cash-back option. Apps can help you increase your earnings beyond what credit card companies offer.
Take Dosh, Rakuten and Ibotta, for instance. These apps give you cash back on top of your qualifying purchases, helping you earn even more when using your credit card. Check their websites to see which spending categories offer the biggest discounts.
Use Flat-Rate Cash Back Cards
Finally, you might want to use flat-rate cash-back cards to complement those only offering bonuses in select categories. This approach gives you more flexibility and lets you continue saving when you need to make urgent purchases (and can’t wait for a category-based deal to come along).
Remember, there are no rules against owning multiple credit cards. Having several means that you can take advantage of category offers when they come along or choose the card with the best cash-back rate when special purchases are unavailable. Most people use flat-rate cards for mortgage payments, utility bills, and insurance premiums.
