How to Earn Maximum Cashback on Your Credit Card
Cashback credit cards offer a straightforward way to earn rewards on your everyday spending. By strategically using these cards, you can maximise the cashback you receive, effectively saving money on your purchases. This article will explore various strategies to help you earn the most cashback, tailored to the local market.
Understanding Cashback Credit Cards
Cashback credit cards reward you with a percentage of your spending back as cash. This makes them one of the simplest rewards programmes to understand, as there are no complex points systems to navigate. The cashback earned can often be used to offset your credit card bill or be deposited into your bank account.
Choosing the Right Cashback Credit Card
1. Compare Cashback Rates and Fees
Different cards offer varying cashback rates and fees. For example, the ANZ CashBack Visa offers $1 cashback for every $150 spent, with an annual fee of $40. In contrast, the BNZ Advantage Visa Platinum provides $1 cashback for every $90 spent, but with a higher annual fee of $90. It’s essential to compare these rates and fees to find a card that aligns with your spending habits.
2. Consider Additional Benefits
While cashback is a primary feature, consider other benefits the card may offer. Some cards provide additional perks like travel insurance, purchase protection, or the ability to earn rewards in other programmes, such as Flybuys. Weigh these benefits against the cashback rate to determine the overall value of the card.
3. Watch for Sign-Up Bonuses
Many credit cards offer sign-up bonuses that can significantly boost your cashback earnings. These bonuses often require you to spend a certain amount within the first few months of opening the account. Be sure to factor these bonuses into your decision when choosing a card.
Maximising Your Cashback Earnings
1. Pay Off Your Balance Monthly
To truly benefit from a cashback credit card, it’s crucial to pay off your balance in full each month. Carrying a balance can lead to high interest charges, which can quickly outweigh the cashback benefits. For instance, the ANZ CashBack Visa has an interest rate of 20.95% p.a.. By avoiding interest charges, you maximise the net cashback earned.
2. Use Your Card for Everyday Expenses
Using your cashback credit card for everyday purchases like groceries, petrol, and utilities can quickly add up to significant cashback rewards. Ensure that these expenses are within your budget to avoid overspending.
3. Shop with Cashback Partners
Some credit cards offer additional cashback when you shop with specific partners. For example, using your card at partner retailers can earn you extra cashback on top of the standard rate. Check with your card issuer to see if they have partnerships that can enhance your cashback earnings.
4. Take Advantage of Cashback Promotions
Keep an eye out for special promotions that offer increased cashback rates for specific categories or during certain periods. These promotions can provide an excellent opportunity to boost your cashback earnings on planned purchases.
5. Monitor Your Spending and Cashback
Regularly review your credit card statements to track your spending and ensure you’re receiving the correct cashback amounts. This practice can also help you identify areas where you can optimise your spending to earn more cashback.
Avoiding Common Pitfalls
1. Don’t Overspend for Cashback
It’s easy to fall into the trap of overspending to earn more cashback. Always stick to your budget and treat cashback as a bonus rather than a reason to spend more.
2. Be Aware of Exclusions
Not all purchases may qualify for cashback. Transactions such as cash advances, gambling, and certain business expenses are often excluded. Familiarise yourself with your card’s terms and conditions to avoid surprises.
3. Consider the Impact of Fees
While some cards offer higher cashback rates, they may also come with higher annual fees. Calculate whether the additional cashback will offset these fees based on your spending habits.
Earning maximum cashback on your credit card involves selecting the right card, using it strategically, and staying informed about promotions and partner offers. By paying off your balance monthly and using your card for everyday expenses, you can maximise your cashback rewards and enjoy the benefits of smart spending. Whether you’re new to cashback credit cards or looking to optimise your current strategy, these tips can help you make the most of your cashback opportunities.