One of the most common incentives credit card companies and other financial institutions offers is cash back rewards. These are additional funds added to your bank account based on certain purchases made within the last billing cycle, typically ranging from 1% to 5%.
When you look at the types of cash back banks offer, you’ll see many different ways to receive these funds. Here are the main types of cash back offered by banks.
1) Flat Cashback
Flat cash back rewards are exactly as they sound: a fixed amount you earn for each purchase.
2) Percentage Cashback
Most credit cards that offer cash back give you 1%-5% cash back on every purchase. The biggest downside to these cards is that you have to wait for your rewards, so you may want to look at other options if you need cash quickly.
3) Hybrid Cashback
Hybrid cash back rewards you for spending money, but only to a certain point. According to the experts at SoFi, you may earn 2% cash back on all purchases up to $5,000 spent in one year and 1% cash back on everything else.
4) Credit Card Rewards
Credit cash back rewards can come in different forms. They include:
1) Flat-rate Rewards,
2) Percentage-based Rewards,
3) Tiered Rewards,
4) Bonus Reward Opportunities
5) Loyalty Programs.
When it comes to earning cash back, flat-rate rewards programs offer a fixed percentage that you earn for each purchase made.
5) Airline Miles
You can exchange these miles for free flights, upgrades, and other perks. You earn these points when using your credit card to pay for airfare, hotels, or rental cars. You can also earn airline miles through a rewards program linked to your credit card account or a specific airline’s frequent flyer program.
6) Hotel Points
If you have an affinity for staying at hotels, one option you may want to consider is a hotel points program. Points are usually rewarded based on how much you spend on your room.
7) Dining Reward Programs
One way to help make eating more affordable is to take advantage of dining reward programs. Depending on your budget, these cards can earn you up to 5% cash back for every restaurant visit.
8) Store Card Rewards
Store-branded credit cards often offer low-interest rates, rewards, and special financing deals that traditional credit cards don’t.
9) Search Engine Optimization (SEO) Incentives
Search engine optimization (SEO) incentives are payments offered to websites that agree to participate in a search engine’s advertising network. An SEO incentive encourages you to increase traffic on your website, leading to increased revenue and more visitors overall.
10) Charity Gift Cards
These cards offer a certain percentage back that donates to a charity. For example, if you buy a $100 gift card at your favorite retailer, you might get $5 or $10 back in cash and $85 donated to your favorite charity.
11) Crypto Credit Cards
Crypto credit cards are becoming increasingly popular as they allow you to pay with cryptocurrency wherever a traditional credit card is accepted. Several crypto credit cards are now on offer, such as those offered by Coinbase and Bitpay.
At their core, cash back cards work in similar ways. They pay you some amount of money after purchasing with your card. However, different cards offer different types of cash back.