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Cash back rewards credit cards are a great way to generate passive income especially if you like and know how to manufacture spending. Cash back rewards credit cards complement miles or points based cards when you think about your rewards earning potential. For example, you can earn Chase Ultimate Rewards points with the Chase Freedom and Freedom Unlimited cards that can be transferred to your Chase Sapphire Reserve that can be used for travel. Pair the Chase Freedom with manufactured spending to get most out of the 5% cash back.
Why You Need These Cash Back Rewards Credit Cards
Using a cash back rewards credit card can be very rewarding. Over the long-term these no reason to no use a cash back rewards credit card to build a base of free cash! We will touch on how we use credit card manufactured spending to earn a profit from our cash back rewards credit cards.
We pair up credit card churning with manufactured spending to maximize our travel rewards points. This allows for us to travel the world for little to no cost. In the churning community we call that travel hacking.
Here we will discuss a number of tips that will help you understand how to optimize your credit card spending to get the best cash back rewards.
Building up a rewards points balance in the form of cash back is key. People need to stop underestimating how important it is to obtain rewards points. Here is how you can use Reddit churning to rack up rewards points quickly.
Rewards points are indeed assets and should be treated as such. You need to build a credit card portfolio like an investment portfolio because you never know when the music will stop and the rewards systems will become devalued.
Can you get cash back from a credit card? Where can you get cash back?
Can you get cash back form a credit card? Of course you can. That’s why I’m here!
There are a number of regional banks that offer cash back rewards credit cards in addition to these names, so stay on the lookout for your cash back options.
I highly suggest that you only spend on your credit card what you can repay at the end of the month. Building a credit card balance over time does not make sense for cash back rewards.
You end up paying much more in interest over time and this will ultimately crush your rewards. Not only will this ruin the benefits of a cash back rewards credit card, this can end up ruining your entire financial position.
How to get cash from credit card
When using a cash back rewards credit card you do not receive the cash back instantly. The cash back from your purchases comes in the form of points. The points are usually credited to your account at the end of the month. Once the points are credited, you are able to withdraw or convert your points into cash back that goes directly in your bank account.
Cash back rewards credit cards are easy and simple. The banks usually give you a user friendly platform to track your points as you make purchases. Now you know how to get cash back from a credit card….
Maximize your cash back rewards with credit card manufactured spending
Through manufactured spending, you can build up a significant cash back rewards points balance. You can actually make income from manufactured spending in certain situations.
Manufactured spending is the idea of spending money on your credit card to turn it into cash that can then repay your credit card balance.
Credit card manufactured spending is a way of artificially spending money to earn rewards points. Credit card churners also use this to hit the minimum spending requirement on their credit cards to earn the rewards bonus faster.
I love credit card manufactured spending. It is an easy arbitrage opportunity that gives me the flexibility to travel around the world. Here are some of our favorite ways to manufacture spending.
When to manufacture spending with your cash back rewards credit card
So… when should you use credit card manufactured spending with a cash back rewards credit card? You only want to manufacture spending when you have a profitable opportunity to do so.
For example, with the Chase Freedom card they offer 5% cash back on select stores on certain quarters. If the month is PayPal, I will buy $1,500 (max amount for cash back) in virtual gift cards only that uses PayPal as a payment gateway.
Each virtual gift card costs $5.95 per gift card and can only be purchased in $500 increments. Thus, my total cost for purchasing the gift cards is $17.85.
I will take the virtual gift cards into my local grocery store to buy a money order with my virtual gift card. A money order typically costs about $1.60, so my total cost is around $20. However, with $1,500 in spending, I obtain $75 in cash back from the 5% cash back rewards.
This leads to an overall profit of about $55 or $55 in rewards for simply taking a trip to grocery store. I’ll take that all day. With the Chase Sapphire Reserve you are able to redeem the rewards points for 1.5X the value for travel, so really my $55 profit is about $75!
Hey, that could get me a free night in a hotel somewhere. Do you like free hotel rooms? I know I do.
Our Three Favorite Cash Back Rewards Credit Cards
These are three of our favorite cash back rewards credit cards to consider. These credit cards give you maximum flexibility to build a cash back rewards points balance and also use these credit cards for manufactured spending.
I max out my Chase Freedom with manufactured spending every quarter. This is fantastic since I get about $75 added to my Chase Ultimate Rewards points balance each quarter. This is about $225 per year.
Here are our three favorite cash back rewards credit cards to consider:
1. Chase Freedom
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
- Enjoy new 5% categories each quarter
- Unlimited 1% cash back on all other purchases – it’s automatic
- 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.99-24.74%. Balance transfer fee is 5% of the amount transferred, $5 minimum
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
- No annual fee
The categories helped us rate this card as one of the best credit cards for coffee lovers.
2. Discover it® – Cashback Match™
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
- INTRO OFFER: Discover will match ALL the cash back earned at the end of your first year, automatically.
- Redeem your cash back for any amount, any time. Cash rewards never expire.
- Use your rewards instantly at Amazon.com checkout.
- No annual fee.
3. Chase Freedom Unlimited
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. You will receive 15,000 in rewards points, which can then be converted into $150 in cash rewards back to you (at a rate of 1 cent per point).
- Add your first authorized user to your account (someone you trust, obviously) and pocket another $25 as a thank you when they make a purchase within the first 3 months from account opening.
- Unlimited 1.5% cash back on every purchase automatically. No worrying about enrolling in bonus categories.
- No annual fee.
Conclusion on Cash Back Rewards Credit Cards
If you don’t have at least one of these cards heading into 2019 you are simply missing out. To maintain outstanding credit, use these cards everyday for all of your purchases and then pay off your balance in full each month.
Monitor your credit score with Credit Sesame. Their free tool allows you to get alerts and monitor your credit score with ease. Are you going to get cash back from your credit card?
Now go out and EARN SOME CASH BACK! If you haven’t already, get these credit cards now to add to your portfolio of cash back rewards credit cards.
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