Our Favorite Ways to Use the Cash Back Your Credit Card Earns

cash back credit card

The best feature of a cash back credit card is the cash back, of course. It doesn’t take a brain surgeon (they are smart, aren’t they) to figure out that receiving cash back for the spending you are doing in the first place is a nice perk to this type of credit card. The best way to use a cash back credit card and really get the most out of it is to charge everything. I mean, everything; pay your mortgage and your utility bill and everything in between with your card.

You’ll want to pay that off at the end of the month, though. You won’t earn much cash back if you leave a revolving balance on the card when you are done spending for the first month. Any cash back you earn is really wasted when you pay interest charges, and you cannot spend much when you have a lower balance. Our advice is to use it as much as possible so you can take advantage of it to the best of your abilities.

Our next recommendation is to use the cash back once per year. Leave it alone and don’t bother cashing it in every month; save it for a special occasion. Save it for the holidays when you want to pay off your balance after shopping, or when you have a birthday and want to go on a trip. That added cash flow is even more appreciated when you use it this way. I have on friend who uses her cash back during the holidays for her shopping and one who uses her to book her birthday trip each year. You can, obviously, use yours for whatever you want. However, we have a few really amazing suggestions for you when it comes to using your cash back the most beneficial way possible.

Pay Your Taxes

It’s not fun, we know. But if you owe taxes when you file your return, wouldn’t it seem nicer to pay your taxes with this money rather than the money you actually work so hard for throughout the year? At the very least, it might lower your taxes enough so that you can feel a little better writing that bigs check to the government.

Save It

The best thing to do with any money you receive that is not already dedicated to living expenses is to save it. We love this idea since it means you can put it away for a rainy day or for retirement or something of that nature. It’s not a bad idea to go ahead and use this method at all. We appreciate it, and we think you will also.


You spent all year shopping for this money back, so why not spend it on something that you really want? Some people have their eye on something that they cannot justify purchasing with their hard earned income from their job, so why not purchase it with this money? It’s a nice little gift to yourself. I have a girlfriend who takes her cash back every year and buys herself a new handbag from her favorite designer of the moment since she has kids and feels bad doing things for herself when she could be doing for them.

Holiday Shopping

One of the best ways to use your cash back is during the holidays. It’s an expensive time of year, and it seems like a great idea to make it less expensive by using your cash back. Since so many cash back credit cards offer your cash back to you through the use of a statement credit, it makes sense to charge your Christmas purchases and then pay them off with your statement credit. The key here is to use up all the cash back you’ve earned throughout the year to make it more profitable for you.

Create An Emergency Fund

If you don’t have an emergency fund, and may people don’t, now is the time to create one. You have no idea when you might need new tires or you might need to replace an appliance or take an emergency trip somewhere, so why not go ahead and make it a point to create an emergency fund with your cash back so that you never have to worry about these things again? It’s nice to know you have a little something to fall back on when you are in the midst of an emergency.

Pay Off Debts

Anyone with debt should pay it off any chance they get to pay it off. With cash back, you can put a serious dent in your debt and help you get back to living a life that is a lot more financially free. There’s nothing wrong with financial freedom, if you ask us. Pay off a debt, and it will be a great feeling.

Photo by Getty Images


Leave a Reply