Subscription Services to Maximize Your Cash Back Rewards Credit Card
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Have you ever felt like you could be making more out of your subscription services from cash back rewards on credit cards? The endless monthly charges for streaming services, news sites, and meal kits can add up. But, did you know there's a smart way to use those annoyances? You can maximize your cash back rewards.
Understanding Cash Back Rewards on Credit Cards
Cash back rewards on credit cards are not a fancy marketing gimmick. They are a legitimate way to get a percentage of your money back on everyday purchases. The key is to use your credit card responsibly to reap the benefits without falling into debt.
How Cash Back Rewards Work
These rewards usually come as a percentage of the amount you spend. For example, a card might offer 1-2% back on all purchases. Some offer higher rates on specific categories, like groceries, dining, or subscriptions. These rewards are usually issued as a statement credit, a direct deposit, or gift cards.
Types of Cash Back Rewards Credit Cards
Cash back credit cards can be overwhelming, but categorizing them can help. Most cards fall into:
- Flat-Rate Cards: These offer a fixed percentage of cash back on all purchases.
- Tiered Cards: These provide different cash back rates for different types of purchases.
- Rotating Category Cards: These cards offer higher cash back rates in categories that change quarterly.
Choosing the Right Cash Back Card
Selecting the best cash back card depends on your spending habits. If you use services like Netflix, Hulu, and Spotify, consider a card that rewards subscriptions or has high cash back rates. It will maximize your benefits.
Subscription Services and Cash Back Rewards
Using a credit card for subscriptions can maximize cash back rewards. This segment will break down how you can optimize rewards.
Common Subscription Services Eligible for Cash Back
Here's a look at some of the most popular subscription services where you can earn cash back rewards:
| Category | Examples |
|---|---|
| Streaming | Netflix, Hulu, Disney+, Amazon Prime Video |
| Music | Spotify, Apple Music, Amazon Music |
| Magazines/News | The New York Times, The Wall Street Journal |
| Software | Microsoft Office 365, Adobe Creative Cloud |
| Meal Kits | Blue Apron, HelloFresh, Home Chef |
These services often recur on your credit card. They are a prime candidate for cash back.
Strategies for Maximizing Cash Back Rewards on Subscriptions
Here are some strategies you can use to maximize your cash back rewards:
Automate Payments
Setting up automatic payments ensures you earn cash back. You won't miss out due to late payments. Plus, automating payments can improve your credit score by ensuring timely payments.
Combine with Other Offers
Some credit cards offer promo cash back on certain subscription services. The rates apply for a limited time. Keep an eye on such offers to combine them with your regular cash back rewards.
Utilize Multiple Cards
If you have more than one cash back credit card, use each one for its highest reward categories. For instance, one might offer 5% back on streaming services. Another offers 2% on all purchases. Use the relevant cards as needed.
Pay Annual Fees Wisely
Cards with annual fees might offer higher cash back rates. Calculate if the rewards you would earn surpass the fee to determine if it's worth it.
Examples of Top Cash Back Credit Cards for Subscription Services
Choosing the right card makes a significant difference. Here are some of the best ones tailored for subscription services:
| Credit Card | Cash Back Offerings | Annual Fee |
|---|---|---|
| Chase Freedom Flex | 5% on rotating categories, often includes streaming | $0 |
| Blue Cash Preferred® from Amex | 6% on streaming services | $95 |
| Citi Double Cash Card | 2% on all purchases (1% when you buy + 1% when you pay) | $0 |
| Wells Fargo Active Cashâ„ Card | 2% on all purchases | $0 |
| US Bank Cash+® Visa Signature® | 5% on 2 categories of your choice, including streaming | $0 |
Each card has unique features for different needs and preferences. So, pick the one that best aligns with your subscription services.
Spotlight on a Few Cards
Chase Freedom Flex
The Chase Freedom Flex gives 5% cash back on rotating categories. It often includes streaming services. It's a great card if you want flexibility. It requires tracking changing categories.
Blue Cash Preferred® from American Express
It offers a whopping 6% cash back on streaming services, which is hard to beat. It has an annual fee. So, make sure your streaming costs justify it.
Citi Double Cash Card
If you prefer simplicity, this card offers 2% cash back on all purchases. It's a simple option for subscriptions. No need to worry about categories.
Benefits of Using Cash Back Credit Cards for Subscription Services
Using a credit card for subscriptions has benefits beyond cash back. You might not have considered them.
Financial Tracking
Using a credit card for all your subscriptions makes it easier to track your spending. This consolidation simplifies budgeting. It gives a full view of your monthly expenses in one place.
Purchase Protection
Many credit cards offer purchase protection. It covers items against damage or theft for a limited time. This feature can be handy, especially for higher-priced subscriptions like software services.
Rewards for Responsible Credit Use
Using your credit card for small, recurring costs, like subscriptions, can help build your credit score. Timely payments contribute positively to your credit report.
Potential Pitfalls and How to Avoid Them
Credit cards for subscriptions have many benefits. But, be aware of their potential pitfalls.
Overusing Credit
The convenience of credit cards can sometimes lead to overspending. Stick to a budget and only charge what you can afford to pay off in full each month.
Neglecting Annual Fees
Annual fees can sometimes exceed cash back rewards. This is true if your subscription spending isn't high. Calculate yearly rewards versus the fees to ensure it's a good deal.
Missing Payment Dates
Missing a payment can lead to hefty interest rates and negate any rewards you've earned. Set calendar reminders or automate payments to avoid this.
Maximizing Additional Perks Beyond Cash Back
Some credit cards offer perks beyond cash back on subscriptions. They can enhance your experience.
Promotional Offers and Discounts
Credit cards often have promo offers. They include free months or discounts on subscriptions. Keep an eye out for these offers to save even more.
Complimentary Subscriptions
Certain cards come with complementary subscriptions or memberships. For instance, some may offer a year's worth of a streaming service as a sign-up bonus.
Travel and Purchase Insurance
Many cash back credit cards include travel insurance and purchase protection. While not about subscriptions, it can help with big purchases and trips. It may provide peace of mind.
How to Apply for and Manage a Cash Back Credit Card
To maximize rewards, identify a suitable credit card and manage its use with care.
Application Process
- Research Cards: Identify which card aligns best with your spending habits.
- Check Eligibility: Ensure you meet the credit score requirements.
- Apply Online: Most applications can be filled out online. Have your personal and financial information on hand.
- Await Approval: Approval times can vary. Some may be instant, while others might take a few days.
Managing Your Credit Card
- Set Up Online Account: This makes monitoring your spending easier.
- Automate Payments: To ensure you never miss a payment, automate the process.
- Track Rewards: Regularly check how many rewards you've accumulated and how you can redeem them.
- Stay Updated with Offers: Credit card companies frequently change their offers. Staying informed can help you make the most of your account.
Real-Life Scenario: Maximizing Cash Back on Subscription Services
Let's look at a concrete example. It will show you how to maximize cash back on subscription services.
Scenario: Monthly Subscriptions
Imagine you have the following monthly subscriptions:
- Netflix: $15.99
- Spotify: $9.99
- Adobe Creative Cloud: $52.99
- The New York Times: $10
- Blue Apron: $59.99
Choosing the Right Card
You choose the Blue Cash Preferred® Card from American Express. It gives 6% cash back on streaming services. You use a 2% cash back card for everything else.
Calculating Your Cash Back
- Netflix and Spotify (6% cash back): (15.99 + 9.99) * 0.06 = $1.56
- Adobe Creative Cloud, The New York Times, Blue Apron (2% cash back): (52.99 + 10 + 59.99) * 0.02 = $2.44
Total Monthly Cash Back: $1.56 + $2.44 = $4.00
Annual Cash Back: $4.00 * 12 = $48.00
You've earned $48 in cash back. You did it by using the right credit cards for your subscription services. It's not a fortune. But, it's free money for your efforts!
Evaluating the Annual Fee
The annual fee for the Blue Cash Preferred® Card is $95. However, if your subscription costs were higher, it might not be worth it. If you used it for other streaming services and grocery shopping, it offers 6% cash back on those. You could offset the fee with little difficulty.
FAQs on Maximizing Cash Back Rewards
Can I Use Multiple Cash Back Credit Cards for Different Subscriptions?
Absolutely. You can use different cards to maximize your rewards based on each card's strengths. Just be sure to track all the payments and due dates.
What Happens if I Cancel a Subscription?
If you cancel a subscription, you won't earn cash back on it. But, the accrued rewards should remain.
Are Cash Back Credit Cards Worth It?
For responsible users who pay their balance in full each month, cash back credit cards are worth it. They essentially give you a discount on every purchase.
Conclusion
Maximizing cash back on subscriptions is a smart, easy way to boost rewards. By learning how cash back programs work, you can save money. Choose the appropriate cards and make effective use of them. This will turn your recurring expenses into savings.
Use these tips. Your monthly bills will become a rewarding experience. Subscriptions that once drained your finances can now boost your savings. They reward you with cash back. You can use it to treat yourself or save for the future.
You deserve to reap the benefits of your financial habits, so why not start today? Happy earning!
