Simple Ways to Save Money From Cashback
How Cashback Can Help You Save Money. Let us see. The global economic outlook isn’t getting any better, at least not till 2021. According to the IMF, they estimate global growth to rise from 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021. These numbers forecast the extreme financial fluctuations that will definitely take a toll on your already stiff budget. Paying off loans during these years may take a big chunk out of your savings, and it may take years before you can finally start saving for your future.
Fortunately, there are plenty of ways you can save some extra money. One of the most prominent means to do so among credit card holders is the cashback incentive. Cashback simply rewards customers when they spend a certain amount of money. These cashbacks mainly offer on credit cards or cashback apps and sites. You can earn either direct cash or points that you can use to purchase from the same seller. While many see it as a mere marketing scheme by companies to lure consumers, it can benefit you in the long run.
Here are some perks of cashback that can help with your savings.
1. Help Pay Your Credit Card Bill
Many credit card companies offer a flat 1% to 5% cashback for a stipulated amount, which you need to spend in order to acquire the cashback reward. Some will let you convert it into points for future use, but most credit companies reduce your credit card bill by incorporating the number of cashbacks you have collected.
Credit bills themselves can be intimidating, and the interest charged upon late payments complicates the financial burden even more. However, with cashbacks, you can significantly reduce your credit card bill. For example, upon spending $3200 dollars per month, you can save $384 by the end of the year with a 1% cashback. However, you must pay your balance timely to avoid interests and loans.
Some cashback cards have 0% APR that allows you to pay certain purchases or debts without interest for a limited time. With a minimum APR, you can sweep off some debt and save money you would have spent on interest payments.
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2. Holiday Spending
Apart from receiving money saved through cashback schemes, you can also enjoy several holiday packages attached to cashbacks. These packages include travel perks such as airline upgrades and discounts on luxurious accommodation.
Many travel rewards also offer points or miles for the amount of money you spend on certain things. These reward points are deposited in your account and can be redeemed as cashback. Having some amount saved up, you needn’t worry about the substantial expenditure during holidays.
3. Save On Daily Utilities And Travel
When it comes to cashback scheme, there are many different choices available. One great way to save money is by choosing the cashback option that has maximum benefits for your daily use. Using cashback cards that offer decent savings on utilities and travel can help you save money. Daily commuting to work and public transits take a significant portion out of your income and expenses by the end of the year. So, cashback on commutes significantly cuts down on your daily travel costs and helps you save more money.
There are many cashback apps that help pay your utility bills by directly depositing the amount for the bill. For such cashbacks, you’ll be buying from retailers that are dealing with that app, site, or credit card. Besides covering amenities and local travel expenses, you can also extend the warranty on many expensive products with a cashback card. By doing so, you can easily save extra money.
4. Sign-Up Bonuses
People have increasingly started to use cashback schemes, instead of travel rewards, for vacations. This is because many cashback services offer lucrative sign-up bonuses, which include shopping expenses, discounts on popular vacation spots, and offers on hotel accommodation. These cashbacks can amount to more than 5% of your spending, and you can collect hundreds of dollars’ worth of points.
To avail these bonuses, you’ll have to fulfil a minimum spending requirement within the designated time. Many credit cards also offer sign-up cashback offers, which can reach a whopping thousand dollars in some cases, depending on your purchases and expenditure. Cashback cards, like Wells Fargo Cash Wise Visa card, offer an intro bonus of $150 cashback rewards, which you will earn after spending $500 in the first 3 months.
Cashback cards are flexible to use and provide multiple advantages over daily purchases. Despite being popular marketing gimmicks, cashback is a safe choice to help you with your savings. Most companies have started offering to as much as 5% on basic amenities like gas and groceries.
With cashback, there is more opportunity to save without having to compromise your lifestyle. Choosing the right card out of the pool, that suits your spending style and consumer type will immensely decrease your annual expense.
However, cashback will profit only from those credit card holders that pay their bills in time. Cardholders in debt will only load more interest and bills if they sign up for cashback cards.
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