Friday, October 12, 2007

Maximize Your Cash Back

Maximize Your Cash BackWhy not earn some free money each month by using your credit card? It’s the cash back from your credit card. The major credit card companies are offering some great deals when it comes to cash back due to increased competition and market saturation.

I recently upgraded my credit card account at Chase from Basic to Premium and got a nice cash back deal. 1% cash back on all purchases and 3% cash back on special purchases. You also get $250 for every $200 you redeem.

There are three ways you are saving money when using a credit card. An average charge of $3000 per month will net you about $500 per year in straight forward cash back using the scheme described above. Since the card lets you pay back the balance after a lag of 30 days – you earn interest on that balance for 30 days (if you keep the money in a high yield savings acoount). And finally if you sock away your cash back in the same saving account which earns about 5% interest your savings account will throw back an annual interest of about $150. So a monthly charge of $3000 nets you about $650 free money every year.

Bottom line – if you regularly use a credit card it makes sense to check around and get a card which maximizes the cash back to you. Nothing wrong with making your card work for you.

Please share with us cash back deals that can benefit the blog readership.

1 comment:

Anand Asthana said...

Nice reminder on checking out the credit card paybacks. My card just pays 1% on special purchases. I need to find a better deal.