Make An Extra $50 to $75 A Month By Maximizing Cash Back

**There are currently no affiliate links in this post. All of the information provided is tools that I personally use and support to get cash back. I am not currently receiving any compensation for promoting these companies**

Maybe you are leary of credit cards and feel that credit cards that offer cash back aren’t worth the risk. I understand your skepticism, but I have been able to earn extra money simply by spending normally.

I like to get free money wherever possible. When I got my first credit card that offered cash back, I was cautious. I understood that I had to keep myself in control, or I would lose money and rack up debt. Although it is easy to overspend on a credit card, if you change your mindset you can make extra money. This article will explain step by step how I make an extra $50 to $75 a month by maximizing cash back.

Step 1 : Prepare for your First Cash Back Credit Card

Before you even think about getting a credit card you need to prepare for it. Maybe you have had debt in the past and are afraid you will go out of control. Or you don’t have much experience with credit cards and don’t know where to start. If you are unsure of yourself start small. Set aside enough money in a savings account that covers the potential limit of your card. For instance, if I am approved for a cash back credit card and the limit is $500, I will set aside an extra $500 in a separate account. If I overspend I have the money set aside to pay the card balance in full.

Know Your Credit Score

Before you try to get a credit card (or another credit card) know your credit score. I personally use creditkarma.com (it’s free!) on a regular basis. Although some argue it is not the most accurate information, it does have tools and generalized information that is helpful. Credit Karma also offers cash back cards that you qualify for based on your credit history. I have been using Credit Karma for over a year and have had no problems with the security of the site.

Do not apply for a Credit Card unless you are fairly certain you qualify. Every time your credit is checked, it hurts your credit score!

Have a Budget and Stick With It

In order for this method to work, you need to have a budget. Don’t even acknowledge having a credit card as extra money, because it is not. If you end up having to pay interest, you are not able to fully benefit from the cash back.

Change Your Mindset About Credit Cards

View your credit card the same way you would your debit card. Pretend that you have to have the amount you are spending or you will overdraft. View your credit card as a tool, not a loan. Please don’t go into debt trying to get cash back. If you are disciplined and careful this method can really work for you!

Once you have your first credit card that offers cash back, and have used it successfully for several months, go to step 2

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Step 2: Pick the Best Credit Cards That Offer Cash Back

Some credit cards are definitely superior to others when offering cash back. You may need several cards in order to get the most cash back. I know it seems overwhelming at first, but it gets easier.

The 3 Credit Cards I Use To Make An Extra $50 to $75 a Month

1. CitiBank’s  Double Cash Back Card

I use this card for daily purchases. I get 1% back when I make a purchase, and 1% back when I pay. Since I pay my card in full every month that is 2% on all purchases. It is like handing someone $100, and them giving you $102 back. Since I have a budget, and am careful about what I spend, I am earning money for doing absolutely nothing differently.

I redeem my cash back monthly, and simply have CitiBank deposit the cash into my checking account.

2. Discover Card

Discover was my first cash back credit card, and I love it. I currently only use Discover Card for it’s category spending.

Every 3 months Discover Card offers 5% cash back when you spend your money in designated categories. For instance June through September were purchases made at home improvement stores and on Amazon.com.

Since Discover only offers 1% on everything else, and I get 2% on everything through CitiBank, I only use it on the designated category.

One tip for remembering the 5% cash back category, is by using a preferred note taking app on your phone. Update the 5% cash back category every quarter, that way you have it with you all the time and won’t forget!

Discover Card also shares your Fico credit score with you every month. This helps me keep track of my credit!

Discover Card also allows you to redeem your cash back in the form of gift cards. The other cards don’t really offer this. Discover has partnered with several companies that offer a discount on their gift cards. There are many restaurants and stores that you can use $40 or $45 in cash back to get a $50 gift card. If you are planning on eating at that particular restaurant, or going to that particular store you might as well maximize the discount.

There were also many years that I used Discover Card cash back gift cards as Christmas presents for my family. I was able to give nice gifts without having to pay much out of pocket. It was helpful (especially when I was a broke college student).

3. Bank of America

The last Credit Card I use to maximize cash back is Bank of America (BOA)

I have a Bank of America Card that offers 3% on Gas, 2% on Groceries, and 1% on everything else. Since I already get 2% on everything, I only use this card for gas.

Unless Discover Card offers 5% for gas, then I will use Discover Card.

Since I don’t drive a lot, and only spend a little on gas, it is really easy to manage this 3rd card.

I usually just redeem cash back directly to my checking account yearly. I don’t earn a ton of cash back on this card, but every little bit helps!

Figure Out The Cards and Method That Works Best For You

Do research in order to figure out what card works best for you. Once you are able to manage one credit card then considering adding another card. It is better to start small.

I have been successfully managing credit cards for over 11 years. It is a skill that takes practice. At one point I had 8 credit cards but that was too overwhelming.

My perfect number of credit cards is 3, but you are not me, pick what is comfortable for you.

Step 3: Migrate All Your Spending To Credit Cards

Your heart may have just skipped a beat. It feels risky to put everything possible on the credit card. I was leary at first, but it has really paid off. I now put everything I can on the credit card.

It Really Can Simplify Things

Since almost all of my bills and spending are on credit cards (a majority of my expenses are automated) I really only have to focus on paying my credit card bill. Instead of trying to keep track of when to pay the internet bill, cell phone bill, and Netflix bill, it all is taken automatically from my card.

Make sure you pay the statement balance in full each month on time! You are defeating the purpose of making money from credit cards if you pay interest.

Automate

I recommend you work towards automating everything you can. Even if you can’t use your credit card for certain things (my mortgage is paid from my bank account) automate from your checking account!

If you automate most of your finances you are less likely to miss a payment. If you don’t miss payments your credit score sky rockets!

Never use your credit card if you are charged a fee. It is not worth it. The purpose of having a credit card is so you can make money from it!

Envelope System

If you are on a tight budget and currently using the envelope system, you may be confused about how you can use credit cards. Luckily by using the virtual envelope system you can still stick with your budget and get cash back from credit cards!

Virtual Envelope System

It is really easy to setup a virtual envelope system. All you need is envelopes and notecards (if you prefer the physical envelope system). Simply label the category on the envelope and write the category and the amount on a notecard. Every time you spend in that category on your credit card, deduct the amount from your notecard. Once the amount reaches $0.00 you cannot spend in that category any more.

You can use a similar method utilizing your favorite note taking app on your phone! I prefer to keep track digitally, but some love the physical envelopes.

 

The Great Credit Card Debate

Many financial gurus heavily criticise credit cards, and recommend that no one uses them.

While I agree that some people should never use credit cards ever, they can be an awesome tool to get free money.

I think the main reason why some financial personalities hate credit cards, is because they enable people to make bad choices. It can be really tempting to overspend, and some people simply can’t control themselves.

I do think that if you are disciplined and focused you can make smart financial choices. By using credit cards to earn cash back, and not allowing yourself to pay interest, you are outsmarting the credit card company!

I have had credit cards for about 10 years. During the last 10 years I have paid around $800 in interest due to financial hardships and being in college. I have also made over $9,000 in cash back! Although I have paid a little bit in interest (please never pay interest), I have actually profited greatly from credit cards!

Before you decide to try maximizing cash back from credit cards please make sure you are a responsible spender. Make all purchases with caution, and ALWAYS pay your statement balance in full on time!

What are your fears about credit cards? Have you earned money in cash back?