Learn how long to hold on to important paperwork, including credit card statements and tax documents, in this article from Lexington Law.
Learn how long to hold on to important paperwork, including credit card statements and tax documents, in this article from Lexington Law.
(Update 1/28/21: Readers are reporting seeing these referral links and signup offers back again.)
A few readers reached out about the absence a referral link being available on the American Express Green card. All other Amex cards are eligible for one referral offer or another, including the business Green card, but the personal Green card stopped being able to generate a referral link as of around a week ago. You also won’t see a bonus offer FOR the Green card when using another referral link.
It’s unclear if this is a temporary thing or permanent, and one reader tells us that select cardholders can still refer, but it seems to be gone for most people.
Cash back is a rewards benefit that many credit cards offer to cardholders. By taking advantage of it, youâll receive back a prespecified percentage of certain purchases you make. Many credit card companies will provide higher cash back rates on certain types of purchases, such as airfare, gas, food and more. Cash back is just one way that credit cards offer rewards, as mileage and points are some alternatives.
Before you spend too much money with your credit cards, make sure you have a financial plan in place. Speak with a financial advisor today.
What Is Cash Back?
The most commonly recognized style of cash back is what you have likely seen advertised as cash back credit cards. This specifically refers to earning a certain percentage of your credit card purchases back as cash rewards. However, cash back rates vary widely, as do the categories that they apply to.
You usually wonât see credit card cash back rates higher than 5%, while 1% is the typically minimum you will earn. Cash back categorization is significantly more complex though, with a merchant category code (MCC) system being the main organizing force.
MCCs run the entire cash back industry, as they ultimately decide how each purchase you make is classified. These designations coincide with cash back rates set by the issuer of your card. For example, you could use your card for a $50 dinner at a steakhouse, which has a ârestaurantâ code. If your card offers a 2% cash back rate on all spending at restaurants, youâd earn $1 cash back.
Familiar alternatives to cash back include point- and mile-based programs, though many cardholders are partial to cash back. Cash back affords cardholders an independence that is ideal, since you can redeem it for nearly anything.
Popular Cash Back Credit Cards
Discover, American Express, Mastercard and Visa all have cash back rewards credit cards available for prospective cardholders. Each abide by their own set of regulations, though card issuers decide on cash back rates, promotions and bonuses. Chase, Wells Fargo, Citi and Capital One represent some of the most active card issuers on the market today.
Below are a few examples of what you can expect to earn when looking for a cash back credit card:
Cash Back Credit Cards Card Name Cash Back Rates Cash Back Bonus Costco Anywhere Visa Card by Citi 4% cash back on eligible gas up to $7,000 per year, 3% cash back on eligible travel and restaurants, 2% cash back in-store and online with Costco and 1% cash back elsewhere None Bank of AmericaÂ® Cash Rewards credit card 3% cash back in a category of your choosing, 2% cash back at grocery stores and wholesale clubs and 1% cash back on all other purchases (up to a quarterly cap of $2,500 in combined grocery/wholesale club/choice category purchases) $200 bonus cash back for spending at least $1,000 over your first 90 days Capital OneÂ® QuicksilverÂ® Cash Rewards Credit Card Unlimited 1.5% cash back everywhere $150 cash back bonus when you spend $500 during your first three months Citi Double Cash Card 1% cash back on your purchases and another 1% cash back when you pay your bill None Capital OneÂ® SavorÂ® Cash Rewards Credit Card Unlimited 4% cash back on dining and entertainment, 2% cash back on groceries and 1% cash back elsewhere $300 cash back bonus for $3,000 spent over your first three months TD Cash VisaÂ® Credit Card 3% cash back on dining, 2% cash back at supermarkets and 1% cash back on everything else Earn $150 cash back when spending $500 within the first 90 days (See Terms) USAA Preferred Cash Rewards Visa Signature Unlimited 1.5% cash back on everything None Blue Cash Everyday Card from American Express 3% cash back on up to $6,000/year at U.S. supermarkets (then 1%), 2% cash back at U.S. gas stations and select U.S. department stores and 1% cash back on other purchases $150 bonus cash back for spending $1,000 over your first six months Getting Cash Back at Retailers
Picture this: youâre buying some groceries on a Sunday morning, but know youâll need $40 cash to fill up your car with some gas later. You could swipe your debit card at the supermarket and then head over to the ATM. Or you could ask for cash back right from the cashier, eliminating the extra errand.
The above situation represents the alternative definition of cash back. Itâs ultimately the use of a cash register as if you were swiping your debit card at the ATM. When you request cash back from a cashier, your bank account will be charged the amount you asked for. This enables the funds to be pulled from your account so the cash can be placed in your hand.
Although this generally only applies to debit cards, there are a few exceptions for credit cards. DiscoverÂ® allows cardholders to ask for cash back at more than 50 large retail stores without a transaction fee.
There are many benefits to utilizing credit card rewards programs. But spending money that technically isnât yours will always involve some level of risk. If youâre in good financial shape, though, cash back and other types of credit card rewards can help you take more vacations, save money on purchases and more.
Credit Card Tips
Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the authorâs alone, and have not been reviewed, approved or otherwise endorsed by the issuer.
Advertiser Disclosure: The card offers that appear on this site are from companies from which SmartAsset.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). SmartAsset.com does not include all card companies or all card offers available in the marketplace.
Photo credit: Â©iStock.com/SIphotography, Â©iStock.com/MJ_Prototype, Â©iStock.com/Juanmonino
The post What Is Cash Back? appeared first on SmartAsset Blog.
We don’t have to tell you that Thanksgiving looks and feels a lot different this year. This may be the first you you are cooking the big meal yourself. While we wish we could be there to help, the next best thing is to share with you our favorite tools for prepping a Thanksgiving feast. And once you’ve got all the tools ordered, be sure to check out our Pinterest boards, for all of our favorite recipes both for Thanksgiving dinner and for the accompanying drinks.
fat separator–ALL THE GRAVY-NONE OF THE GREASE
BRINING=ACING THE TURKEY GAME
SAVE STOVETOP SPACE -SLOW COOK YOUR MASHED POTATOES
BECAUSE YOU’RE PROBABLY NOT EATING THAT WHOLE PIE IN ONE SITTING…BUT WE WON’T JUDGE IF YOU DO
GET THE RIGHT TEMP
BASTE LIKE A PRO
BECAUSE MANHANDLING A HOT TURKEY IS NOT A GOOD LOOK
Stainless Steel Trash & Recycling Center
Read Must Have Tools for Thanksgiving Dinner Prep This Year on Apartminty.
It would be easy to fill up a wallet with just credit cards. A card to maximize airline miles. A card targeted at your favorite hotel chain. A card that gives you cash back on groceries. Even a card that earns you points when you spend at NFL games. So, where to begin? And where to end?
The short answer: you should have at least two – ideally each from a different network (Visa, Mastercard, American Express, Discover, etc.) and each offering you different kind of rewards (cash back, miles, rewards points, etc.). How many credit cards is too many? That depends on the individual – you should never have more than you can handle.
Experts say the number of cards one should have varies according to individual and circumstance. “Generally speaking, there is no one perfect number,” said Ethan Dornhelm, a vice president at FICO.
While the number varies by generation, credit score and other factors, the average American has three credit cards and 2.4 retail store cards, according to a 2020 survey by the credit reporting agency Experian.
To ensure a mix of credit cards and keep your credit score climbing, credit expert John Ulzheimer suggests asking yourself two questions about the cards in your wallet:
Credit utilization – how much credit you’re using each month, on average, of all the credit available to you from all your cards combined – accounts for 30% of your credit score under FICO’s traditional model.
If you can add another credit card while keeping your overall spending the same, you’ll lower this ratio – and boost your score.
See related: What is a good credit utilization ratio?
That former number sounds about right to John Corcoran, a hotel industry executive in Aspen, Colorado.
He’s got two for personal use – both airline mileage cards – and a third for work. He added the second mileage card solely for the points bonus, and is thinking about dropping it before the $90 annual fee comes due. “I don’t like credit cards,” he said. “I don’t like debt.”
On the other end of the spectrum is Naomi Sachs, an international business executive in San Rafael, California. Sachs estimates she has 20 or 30 cards “sitting in a sock drawer, unused” – generally retail cards she signed up for to lower the cost of a purchase at that store or credit cards she acquired for the points boost.
Sachs is carrying around in her wallet about 10 more cards, of which she uses two or three with regularity. As for cash? Maybe there’s a $20 bill in there somewhere. Debit? “I don’t put anything on debit, ever, ever,” she said.
Instead, she charges strategically, and checks her card balances a few times a week to stay on top of her finances. “I aggressively try to maximize my spend, for almost every single dollar, every single time,” she said.
Credit expert John Ulzheimer suggests two things that can help you determine the number of cards that is right for you. Always keep your overall credit card utilization low, and secure access to more than one credit card network.
While merchants in the U.S. accept the big four card networks – especially Mastercard and Visa, and, to a lesser extent, American Express and Discover – you can still find places where some of them are not accepted. Costco is one example. The warehouse club switched in 2016 from American Express as its card partner to Citi, so now the only card Costco accepts in-store is Visa.
And if you travel abroad, you should pack credit cards from a variety of card networks. While Visa and Mastercard are most universally accepted, and American Express signs are increasingly common in store windows across the globe, you will inevitably wind up in a place that doesn’t accept the type of credit card you have with you.
Beyond those two key elements, Ulzheimer explains, many approaches are valid, so long as they work for you.
See related: How to use your credit card wisely
Want to get more specific? Here’s a list of some particular situations you may find yourself in, and some experts’ thoughts on how that might affect what kinds of cards, and how many, you may want to carry in your wallet:
Start with one card, a secured card if necessary, then add a second card when you can prove to yourself that you are making your payments on time and paying your bill off in full each month, says Netiva Heard, a credit counselor in Chicago.
“It’s a learning period,” she said. “That’s why you start with just one card first, to get adjusted to those good habits.”
Cards that don’t offer rewards “are a complete waste of your time,” Heard says. She recommends thinking about what rewards would benefit you the most, and whether you want to pay an annual fee to get them.
Cards that don’t charge an annual fee generally come with lower introductory bonuses than cards that do and may not be as generous with rewards points on day-to-day spending. But be careful that you don’t sign up for more rewards cards than you can manage to juggle.
Heard advises most people to keep no more than three to five credit cards total in their wallets. Ulzheimer said two rewards cards seems like more than enough – one for airline points and one for cash back.
You should stick to the number of cards you already have, at least temporarily. Don’t open even one new credit card within at least six months of applying for a so-called installment loan. Opening a new card will lower your score by a few points due to the hard inquiry on your credit, “and you want it to be in the best shape possible when you go out to get that expensive loan,” Ulzheimer said.
That said, he added, installment lenders will pay the most attention to whether you’ve had a mortgage or auto loan before, if you paid it off on time and whether you tend to pay off your bills in general on time.
This is not a reason to get a new credit card, Ulzheimer said. “Opening a new card can actually backfire,” he said, because it will, at least initially, lower your score.
When you apply for a credit card, the issuer pulls your credit report, which triggers a hard inquiry. A hard inquiry can lower your score by five points, but it only affects your credit score for one year. After two years, the inquiry falls off your credit report. Note that applying for multiple credit cards at once can exacerbate the negative credit score impact of inquiries, at least in the short term.
A new credit card can also reduce your length of credit history, a key credit scoring factor that considers the average age of all your credit accounts. While length of credit history only counts for 15% of your FICO score, the effect can be significant if you only have one or two existing credit accounts.
On the other hand, if your new credit card has a high credit limit and you keep your balance low, the card can eventually boost your credit score by increasing your overall available credit.
If you need to close your credit cards to avoid using them, then do it, but know that every time you close a credit card, it can lower your score, he said – because it may reduce your available credit, thus increasing your aforementioned credit utilization ratio.
So, whether you have two or 20 cards doesn’t really matter. What’s important is that your cards give you access to more than one network and offer you the rewards that best meet your needs (which can change over your lifetime).
And, of course, you need to be sure you’re not juggling so many cards that you can’t keep track of all the payment due dates The whole point of having two to 20 or more credit cards is earning points or cash back on your everyday spending that you pay off every month. All the while, keep your credit utilization low so that your credit score climbs.
While many rewards enthusiasts focus on signing up for new credit cards to earn signup bonuses, not everyone has the time or desire to play the signup game. There is effort involved in tracking multiple cards, annual fees, and rewards programs, after all, and some people don’t want to spend their time or mental energy this way.
If you’re someone who falls into this category, you may be better off maximizing one or two cards instead of chasing rewards. Fortunately, you can earn plenty of rewards over time if you’re savvy about your card’s benefits and bonus categories.
The key to getting the most out of your rewards cards is understanding how they work and looking for opportunities to earn more points on your everyday spending. Here are some tips that can help.
Because rewards cards offer points based on each dollar you spend, maximizing the amount you can spend on credit is the best way to boost your rewards haul. The smartest strategy to use here is figuring out how many of your monthly bills you can pay with a credit card.
While you may not be notified or aware, it’s possible that bills you’ve been paying with a check or debit card for years can be paid with a credit card without any fees. While your bills may vary, some expenses you should try to pay with a credit card include:
Keep in mind that these are just some of the bills you could be paying with credit. Depending on your situation, you could have additional, uncommon expenses to cover that could be paid with credit with ease.
Also, remember that these additional bills should be paid with credit on top of your everyday expenses like groceries, dining out, gas or bus fare, and miscellaneous spending. Every time you buy something in person or online, you should strive to pay with your rewards card if you can.
It’s also important to leverage your favorite card bonus categories, whatever they may be. This is especially important if you have a few cards with different bonus categories since you’ll want to make sure you’re using the right card for bills that let you earn bonus points.
Let’s say you have a travel credit card that earns 3x points on dining and travel and another card that earns 6x points at the grocery store. In that case, you would be smart to use the travel card for dining and travel purchases and your other card when you stock up on food. While the amount of rewards you earn with individual purchases may seem nominal, using the right card for the right purchase can help you earn a lot more rewards over time.
Most of us have bills set up to be paid automatically, whether it’s our Netflix and Hulu subscriptions, gym membership, or utility bills. Make sure each bill you have set up to be paid automatically is set up to be paid with your rewards card and not a debit card. This way, you can earn rewards points on those expenses every month.
Many flexible rewards programs, frequent flyer programs, and hotel loyalty programs have shopping portals you can access to earn extra points. Major airlines like American, Delta, and United also have shopping portals that work similarly. (See also: How to Maximize Rewards Through Credit Card Shopping Portals)
Some programs like Southwest and Delta also offer dining clubs. These programs let you earn additional points or miles just for dining at participating restaurants in your area. It’s easy and it’s free to join, so you may as well earn extra miles on your spending if you’re going to dine out anyway. (See also: Everything You Need to Know About Airline Dining Rewards Programs)
If you are skeptical the average family can rack up meaningful rewards without signing up for new cards over and over again, look at how this might work in real life. For example, imagine a family of four with two rewards card-toting adults. Across the two of them, they have:
To figure out how much this family might earn, we used Bureau of Labor Statistics spending averages from 2017. Here’s a rundown of that data for the year plus how much a family could earn in rewards over 12 months based on average expenses:
Total rewards: $923.75
While $900+ is a lot to earn in rewards within a year, you have the potential to earn a lot more. After all, these are just some of the expenses the average family faces and not all of them. If you could pay some additional big bills with credit each month like daycare or your rent, you could significantly add to your bottom line.
While maximizing rewards cards is a smart idea if you’re using them already anyway, there are always pitfalls to be aware of when you’re using a credit card. Here’s what to watch out for during your quest for more cash back and travel rewards.
While there are many bills you can pay with credit without a fee, some vendors, merchants, and service providers charge a fee to use a credit card as payment. Fees are especially prevalent on bills such as utilities, cable or internet, rent, and insurance. Make sure to verify you aren’t being charged a fee to use credit before you proceed.
Don’t forget that some rewards cards charge annual fees. These fees may be worth it depending on your spending and rewards haul, but you should always factor them into the equation to make sure each fee is worth paying. If you’re against paying annual fees, look for rewards cards that don’t charge one.
Using a credit card for all your expenses may simplify your financial life, but it could also cause your budget to fall out of whack. Make sure you’re only spending on purchases you planned to make anyway, and that you’re tracking your spending and paying off your credit cards regularly.
Never use credit cards for purchases you can’t afford to repay if you’re pursuing rewards. The interest you’ll pay will always be much more than the rewards you earn. If you’re worried using credit will cause you to rack up debt you can’t afford to repay, you’re better off sticking to cash or debit instead.
If you accidentally overpay your credit card balance, your first thought may be that something is wrongâbut thereâs no need to worry. Read on to learn more.