Written by Salina Jivani
We all love a little bang for our buck, right? Especially when it comes to earning rewards on credit cards? But it’s discouraging when those credit cards only reward people who spend a ton of money. Because, let’s be honest, most of us are on a budget here. And while $6,000 a month might not put a dent in Warren Buffet’s bank account, that’s way more than most of us spend, or can afford to spend, in a billing cycle to see the light of reward points.
How exactly do reward points or rewards cash work?
Most cards review your spend in a specific category (say the amount you spent on travel, groceries, gas or retail) during a billing cycle and give you a percentage of that spend back in either reward points or cash back. You can then use these points or cash in several ways, depending on what the credit card’s program offers. For example, it might give you the option to redeem your earnings in the form of a gift card or a check or, if you have a travel rewards card, you might be reimbursed for flights or hotel stays.
Say, for instance, your card gives you 3% back for groceries you charge on the card, and you spend $300 on groceries one month, you would have earned $9 for just that billing period—$9 you otherwise wouldn’t have! Plus, most cards give you different returns for different categories of spend. So while you earn 3% for groceries, you might earn an additional 2% for gas charges. Meaning your reward dollars will add up quickly!
But what if you’re on a tight budget and don’t have the luxury of spending hundreds of dollars a month to reap true rewards? Don’t worry, someone’s already thought about that.
Here are three cards designed for people on a limited budget, but who want to earn a decent amount of rewards for their spend.
US Bank Cash + Visa Signature
While many cards dictate what categories of spend you’ll earn rewards for, with the US Bank Cash + Visa Signature card, you get to select two categories of your choice that will receive the card’s highest tiered reward of 5% cash back, for a maximum reward of $2,000 per quarter. Purchases for groceries, gas or restaurants receive 2% back and the rest of your purchases will receive 1% back.
The card has no annual fee and a 0% APR introductory rate on balance transfers for the first year.
Barclaycard Cash Forward World Mastercard
If you’re looking for unlimited reward, this card’s for you. You’ll get 1.5% back for every purchase, plus an additional 5% when you decide to redeem your cashback earnings.
Does it get better than that?
Well, actually, yes it does. As a signup bonus, you’ll receive an additional $100 when you spend $500 in the first three months.
The Barclaycard Cash Forward World Mastercard has no annual fees and also a 0% APR introductory rate for the first 15 months.
For people who don’t have a high amount of card spend, the Chase Freedom card might be just right for you. Once you successfully sign up for this card, you’ll automatically receive a $150 sign up bonus, given you spend $500 on your card within the first three months. If you have an authorized user on your card and they make a purchase, any purchase, within that first three month period, you’ll receive an additional $25 in rewards.
Additionally, you’ll have a chance to rack up more rewards when you make purchases in specific categories of spend, which rotate every quarter. So for example, one quarter you might earn rewards for card charges in the categories of restaurants and department stores. The next quarter you might earn rewards when you spend in the categories of home improvement and ground transportation, etc. You’ll receive a set 5% cash back anytime you spend in the allocated categories. The maximum you can earn in a quarter for categories that fall in the 5% cash back bracket is $1500. All other purchases you make that don’t fall into the specified quarterly categories will earn 1% cashback.
The Chase Freedom card has no annual fees and also a 0% APR introductory rate for the first 15 months.
Remember that earning cash rewards on credit cards is a privilege that’s extended only to those who are responsible with their money and credit. If you have outstanding debt on your credit, make sure you manage that debt to get approved for and reap the benefits of these credit cards. Aside from scraping up some extra cash, you’ll gain the added benefit of being able to better afford luxuries later on in life.