Do You Know How Much Cash Back You’re Getting? – Technologist

Many consumers are following money expert Clark Howard’s advice to spend with a credit card instead of a debit card.

On top of the added consumer protections, cash back credit cards also offer the opportunity to put money back in your pocket while conducting your everyday spending. That’s great!

But when is the last time you checked in on your cash back rates?

If you’re using an old bank-issued credit card, there’s a good chance that you’re leaving money on the table!

In this article, we’ll help you figure out how much you’re earning on your spending, show you what newer credit cards are offering and we’ll talk about how that aligns with what Clark thinks is best for rewards credit cards.

Table of Contents

• Why Your Old Credit Card May Not Be Cutting It
• Clark Recommends This Type of Cash Back Credit Card
• Go To The Next Level with Our Cash Back Credit Card Tool

Why Your Old Credit Card May Not Be Cutting It

During a recent episode of The Clark Howard Podcast, a listener wrote in surprised to learn that his bank-issued credit card was no longer offered as an option on the bank’s website.

As it turned out, the card was what is called an “orphan” or a “senior” card. These industry terms mean it is a credit card that was phased out of the menu for new customers but kept active for existing customers who applied for the card in the past.

And, in many cases, they’ve left you behind in an old, outdated rewards system by design.

“That’s banking 101,” Clark says. “They live off people’s inertia.”

Many bank-issued credit card users will find that their “old” rewards program is not nearly as desirable as the ones offered by the top rewards credit cards.

If you haven’t made any changes to your credit card situation in recent years, you may want to take a close look at the rewards program your bank is offering you.

• How much cash back are they awarding?
• Are there strings attached? (ex. annual fees, spending caps, categorical restrictions)
• Does your rewards menu match what they’re offering new customers?
• Is the valuation of your rewards at 1% or worse?

If you have underwhelming answers to some of these questions, you may need to shop around for a better card. (Note: Don’t close your existing card account in this process. You could damage your credit score!)

Let’s take a look at some options to push your cash back rewards earning potential to 2% and higher.

Clark Recommends This Type of Cash Back Credit Card

If you’re a long-time listener of Clark’s, you likely know that he’s been steadfast in his strategy for earning credit card rewards.

Whether you’re new to the credit card game or have been at it for years, he believes a solid rewards earning base begins with having a cash back credit card that has no annual fee and earns 2% cash back on all of your purchases.

Being able to pull one of those out at any time — without fear of spending caps or category restrictions — is a great way to ensure a solid cash back return on your spending.

“It means everything you buy is essentially discounted 2%,” Clark says.

Team Clark has a list of cards that meet this level of cash back rewards. And we all have our favorites based on small details aside from the cash back earnings.

Clark has long suggested the Citi Double Cash® Card because of its simplicity. Personally, I enjoy the ability to invest my 2% cash back in my retirement account via the Fidelity® Rewards Visa Signature® Card.

Go To The Next Level with Our Cash Back Credit Card Tool

If you’re already earning 2% cash back on your spending, you’re doing great. But could you be doing even better?

There are three basic ways to beat the 2% cash back you can earn on everyday purchases with a no annual fee card. And two of them have a catch:

1. Get a rewards or travel credit card with an annual fee. You may find that you’re able to comfortably earn more than 2% back with one of these expensive credit cards, but your annual charge volume needs to be quite high to offset the fee you’ll pay each year. Several of the top cards have annual fees that top $300.
2. Align yourself within a bank or credit union’s ecosystem for enhanced rewards. There are no annual fee credit cards on the market that will offer more than 2% if you’re willing to sign up for banking or investment products with a bank or credit union. Bank of America has a prominent program for this.

Before you make the commitment necessary for those paths, we have a third option we’d like you to try first!

There are credit cards with no annual fee that will reward you with as much as 5% cash back on purchases made in specific categories. These cards specialize on rewards for things like dining, gas or grocery shopping.

If you have a monthly budget, take a look at how much you spend on each category. Then head over to Team Clark’s Cash Back Credit Card Tool to enter the numbers.

The results should give you some optimized choices beating 2% catered to your specific household spending patterns!

How much cash back are you earning right now? We’d love to hear about your credit card experiences in the Clark.com community.

The post Do You Know How Much Cash Back You’re Getting? appeared first on Clark Howard.