Everyone loves the idea of earning some cashback each time they use a credit card. No wonder money back credit cards are one of the most sought-after rewards cards available in the market. However, to take advantage of your money back credit cards’ cashback options, you must first familiarize yourself with the various ways to redeem these rewards.
Redemption offers contain gift cards, statement credits, and the possibility to redeem the rewards for attractive, specific merchandise. Instead of then utilizing money back credit cards’ rewards points to spend on lavish goodies or for giving wings to your wanderlust dreams, you can instead improve your all-in-all financial health.
Using the rewards, amassed from your money back credit cards to settle in a better financial position, might not be a tempting and exciting alternative. Nevertheless, in the longer run, you might feel grateful for unhinging your temptations now and making the smarter money move.
Here’s a definitive list of the smart ways to take advantage of the cashback options from your money back credit cards
Start saving for an emergency fund
This is a quintessential tool if you wish to improve and wisely protect your finances. Most finance specialists advise starting saving from three to eight months’ worth of existence expenses to grow the ideal emergency fund. Your emergency savings provides you with the option to make wiser long-term commitments without having to fret about the pressing financial impact.
They can additionally help to avoid falling into any debt by dispensing a buffer for significant unanticipated expenses or even during a temporary diminution in income. Now, the cashback rewards from a moneyback that you make in a couple of months presumably won’t pay for an air purifier alone or be able to support the living expenditures for a few months either.
That said, every penny of cashback you set aside to grow your emergency fund encourages you to reach your end goal faster and help protect the rest of your finances a little more and better too.
Start saving for primary goals & aspirations
Cashback from money back credit cards can help recover your finances even when you don’t have a debt with a high rate of interest, and you have already created an emergency fund. Important financial objectives like saving for a down payment on a house or a car take a substantial amount of time to attain.
Designating the cashback that you earn from your money back credit cards can catalyze the timeline of accomplishing these goals. It may not appear worth it to curb the temptation and invest this relatively small cashback that you receive towards these goals requiring lump some amount of money.
Nevertheless, it can make a weighable exception. Ordinarily, people have to save up for years to attain these goals. In some cases, adding the moneyback, you earn on the top of your otherwise regular savings can help you reach your aspirations and purposes just a little sooner.
Pay for major planned or unforeseeable expenses
The moneyback that you earn can help support life’s vexing exorbitant purchases that no one desires to spend on but has to nevertheless. For instance, as a house owner, notable expenses like an air conditioner or a water heater or replacement for an old, damaged television might pop up when you least expect.
When the time comes to purchasing the required appliance, you may not have the money. It’s unlikely that these major expenses will not occur at all, so you can reduce them to weigh down on your budget by keeping aside your cashback to pay for them.
Even though you won’t be earning significant cashback from your money back credit cards in a few months to afford to pay for any surprise expenses, nonetheless, saving cashback over a longer duration might help ease up the financial constraint