First, there are different types of cash back credit cards. Some only offer cash back on certain purchases like gas or groceries. These usually offer a slightly higher percentage back because they are specialized. Others offer cash back on everything so the reward might be slightly lower.
The plan here is to use cash back credit cards effectively. By doing this you can minimize your costs and end up actually making a decent amount of money from them.
Here are a few key things to remember when using cash back credit cards:
- Pay your balance off as often as possible. By doing this, you pay little to no interest.
- Only use the card for purchases the earn you cash back.
- If the above rule applies, use the card to pay bills.
- Never buy things simply to earn cash back, it defeats the purpose.
- If possible, only use the card for purchases you have the cash for to keep your balance low.
The rest is common sense. You can find some of the best cash back credit cards here.