Cashback cards are one of the best ways to save money. And yet, many people still don’t realize just how much they could be saving with these types of accounts. Cashback cards can help you reduce the amount you spend on interest payments, plan for retirement, and even finance your next big purchase. Here are five reasons why everyone loves cashback cards:
Cashback cards are a good way to budget because you can track your spending. This can make it easier to spend within your budget since you’ll know exactly how much cashback you have left on the card at any given time. If you’re trying to stick within a certain spending limit, having an idea of how much money is left in your account can help keep you on track.
Cashback cards can help you reduce the cost of borrowing. For example, if you have a cashback card and have a balance on your credit card, the interest rate for the cashback card may be lower than other credit cards. This means that you’ll end up paying less in interest over time.
There are many reasons to use cashback cards, but the best reason is that they can help you reach your financial goals faster.
Here’s a scenario: You have an emergency fund goal of $10,000. In order for this goal to be met in one year, you need to contribute $833 per month.
With a 3 percent cash back credit card, you can earn $300 per year on purchases that charge 3 percent or less. This means that if you spend only on things with no annual fee and no interest rate, then all of those purchases will result in free money toward paying down debt or building up your savings account!
Cashback cards are great for paying off big-ticket items. For example, you could use your cashback card to pay for a vacation, a new car, or a house. You can also use it to fund the purchase of an engagement ring or wedding band if you get married soon.
It’s important to note that these purchases are not considered “ordinary” purchases and, therefore, would not qualify for any cash back rewards through the card issuer’s program.
If you’re a frequent traveler, cashback cards can help you earn rewards for your regular spending and redeem them for travel.
The Barclaycard Arrival Plus® World Elite Mastercard®, for example, offers 2x miles for every dollar spent on restaurant dining and travel purchases, plus 2x miles on all other purchases. And if you use the card to pay for your trip or vacation using the Barclaycard Travel Portal and redeem your rewards through its Travel Center, you’ll get 5% back in statement credit when booking a flight—a pretty huge value!
As per advisors like SoFi, “Financial independence doesn’t just mean being rich—it means getting to a point where your money works for the life you want to live.”
Cashback cards can be a great way to earn extra cash for everyday expenses, and they’re a safer option than using credit card debt to earn points or miles.