5 Ways to Earn Cashback Rewards Without Extra Spending

By Jay Cross. Last updated 9 July 2014. 17 comments

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Cashback rewards are a great way to make using your credit card even more lucrative. Unfortunately, consumers often become so obsessed with rewards that they completely derange their spending habits in order to earn them. The Wall Street Journal analyzed the problem in 2010, concluding that rewards cards do indeed lead to more spending and debt:

The initiation of a 1% cash back program yielded, on average, a $25 reward each month and an increase in spending by $68 a month and in credit-card debt of $115 a month.

The good news: debt is completely unnecessary for getting the most out of your rewards card. With some simple tweaks, you can earn cashback rewards using little more than your own current spending.

1. Pick the Appropriate Card for YOUR Spending Habits

We cannot overstate the importance of picking the best rewards card for your own unique lifestyle. Picking the right card isn’t easy, because they aren’t custom designed for individuals. Rather, highly paid marketing teams try to attract as many consumers within a broad group as possible — say, “students” or “business travelers.” Therefore, it’s up to you to decipher the marketing-speak and determine which card provides the most rewards for your spending habits. 

If you need help picking the right rewards card, check out my guide: Which Type of Rewards Credit Card is Right for You? Make sure you have the right type of card before continuing on to the next steps.

2. Use That Credit Card for All Routine and Recurring Expenses

The first place most consumers go wrong when it comes to earning rewards is assuming they need to somehow start spending more money. They actually begin looking for excuses to buy things in order to inflate their spending totals. 

This is the wrong approach: not just because it’s a sure fire path to debt, but because you spend plenty of money already! If, like most people, you do your day-to-day spending with cash or debit cards, simply making these purchases with your cashback card will boost your spending total without wrecking your finances. 

Almost everything the average person buys (from gas to utilities to groceries to rent payments) can be paid using credit cards. Consolidate all spending onto your credit card and just pay it off with cash each month.

(If you just want to use just one cashback card, the best one right now is the Discover It card. It offers the highest cashback rates: up to 20% cashback at specific retailers. Click here for more details about the Discover It card.)

3. Make Large Purchases With the Credit Card Instead of Cash or Debit

Looking to buy a new plasma TV? In the market for a new computer? Need to overhaul your wardrobe? All of these purchases are excellent candidates for using your rewards card. In one fell swoop, they will instantly add hundreds or even thousands of dollars to your spending totals, thus increasing your points.

What type of credit card are you interested in?
How much do you spend per month?
Do you carry a balance?

Plus, there are extra benefits to using your credit card for these purchases, including superior fraud protection and extended warranty service.

The key here is to only do this if you have the cash on hand to buy these items and were going to do so anyway. This way, you are simply doing planned spending in a more efficient and profitable manner. Avoid rationalizing major purchases that you don’t want or can’t afford just because “you’ll get the rewards.”

4. Repay Your Outstanding Debts With the Card

Another convenient and responsible way to accrue cashback points is servicing a debt with your rewards card. Many of us have some form of non-credit card debt, including:

  • Student loans
  • Professional training courses
  • Vehicle financing
  • Mortgages, HOA fees, or renter's insurance

All of these can generally be paid with a credit card. Look at this the exact same way as your routine, day-to-day spending. You have the cash to pay these loans every month, but it’s not the most efficient way. Instead, by repaying them via credit (and paying off the card with cash) you can partially offset your debts with the rebate you earn.

5. Offer to Pay for Your Friends and Have Them Repay You in Cash

Planning a trip with your friends? Here’s a way to get cash back form the journey: offer to pay their hotel and airfare with your rewards card, then have them reimburse you with cash. There’s no added expense for them nor you, yet you reap the benefits of the entire group’s spending when your next cash back rebate arrives.

This applies for almost anything, not just trips. If ever your friends or even a family member is about to make a large purchase, offer to do it for them. (Unless, of course, they’re as diligent about earning points as you are!)

The Takeaway

I want you to notice the consistent thread running through all of these tips. They aren’t just random suggestions. In each case, you are either utilizing your own spending or the planned spending of another person to earn rewards, NOT modifying your existing spending in any dramatic way.

Keep that principle in mind and you will earn more rewards with less risk than the vast majority of consumers!

What are your best tips for earning rewards without extra spending?

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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Guest's picture
Heather Speaks

l like these tips, especially #2...we usually pay our dental bills and other co-pays by check.

Guest's picture


In another post, "Why Would Anyone Pay Mortgages With Credit Cards?" you indicate you would need to pay 39500 before any cash rewards would start to kick in while paying your mortgage with a credit card. Yet in this post you offer it as a way to earn rewards without indicating set up fees (for the mortgage company highlighted in that article)or the fact that it is treated as a cash advance and subject to cash advance fees. I find this misleading unless there is a piece of information I am missing from somewhere else.

Will Chen's picture

Hi Michaele,

That's a good question. I'm really glad you pointed this out! It is always nice to know someone has been a reader for so long. =)

We definitely should do a follow up article that addresses specifically the pros and cons of paying off your mortgage with credit cards.

The post you're referring to is a 2008 article by a different author (Xin). It is addressing the specific situation of using American Express mortgage payment program.

According to the WSJ's reporting on this program:

"A cardholder with a $2,500 monthly mortgage payment would amass 30,000 card points a year. For a holder of the American Express "Blue Cash" card, that same mortgage payment would recoup $385 back in the first year. The Blue Cash card pays 0.5% for the first $6,500 charged and then 1.5% for every dollar after that."

It's possible that Xin wasn't using Blue Cash so the rewards didn't add up for her.

Regardless, I don't know how things stand with AMEX now (the terms might have changed for better or worse). However, there has been some new developments since that article published. There is a 3rd party bill paying service called ChargeSmart, which allows you to use it to pay mortgage payments. They charge 2.29% fee plus $4.95 transaction fee.

Let's say you sign up for Chase Freedom--which offers 1% cashback and $200 sign-up bonus if you spend $500 in the first 3 months.

If your mortgage is $800 a month. You charge it with Chargesmart, which would cost you $23.27 in processing fee. But you would earn $208 from Chase.

Guest's picture

That is for the first month (Chase and making 208.00 - something many people can make other ways just as easily without incurring the fees). I am sure it is obvious to you, but that makes it a one shot deal because after that you will only get 1%, while being charged over 2%.

There is also the very real concern that if you do not have enough money left on your credit card, the mortgage payment either will not go through (really bad for your credit report) or you will be charged a fee for going beyond your credit limit. I look forward to an updated article that includes long term strategy - a fix it and forget about it model, which is what I have with my mortgage being automatically deducted from my bank account.

Can you explain to me why I can reply to all comments except yours? Thanks.

Will Chen's picture

"Can you explain to me why I can reply to all comments except yours? Thanks"

On comment threads there are two levels of comments. Top level and second level. The "reply" button only exists on top level comments. There are never reply buttons on second level comments.

This is how it is on all our threads. For example, in this thread there is no "reply" button on Jason Topp's comment, because like my response to your comment, it is a second level comment:

The way to get around this is just to hit the reply button on your own original comment. That way your reply will appear as a second level comment right under my reply to yours.

I know this is crazy right? Why can't we just have reply buttons on ALL comments, first or second level? I've asked about this before but there's some weird Drupal thing that apparently makes this difficult. =(

# # #

"but that makes it a one shot deal because after that you will only get 1%, while being charged over 2%."

That's a good point. In my example I think you end up making a one-shot $184. For some people that's not worth the hassle of setting this up for just one payment. But maybe for other's that enough to buy an extra 3 weeks of groceries or a nice start for an emergency fund.

There might be other cards out there that would make paying mortgages worth it on more than a one-shot deal basis. As the WSJ article pointed out, Blue Cash is (or used to) be such an option under certain circumstances. Like you said, that would make a good specialized article about mortgages and credit cards.

# # #
"There is also the very real concern that if you do not have enough money left on your credit card, the mortgage payment either will not go through (really bad for your credit report)"

You are absolutely right. Like Jay pointed out, these rewards are only worth it for responsible people who won't let the lure of cash back to change their spending habits. If you're a responsible spender with good credit line, who is good at tracking your spending, you can try this. But for folks who barely have enough credit to get through the month, this is definitely NOT a good idea.

Guest's picture

Number 2 works really well! It puts regular earnings on your card ~automatic pilot style. I like number 5.

Guest's picture

I use my HSBC and earn reward dollars. I pay for all the things I always buy and anything that takes my card because I just go $ 75.00 check on it's way today! I never spend to get rewards. That is just not smart at all.

Guest's picture

#5 seems a bit awkward. I wouldn't offer to buy stuff for my friends and have them pay me back in cash. The only time I do this is at Costco where my credit card is also my membership card. Still I usually offer to put dinner on my credit card and take our friend's cash when I can. This both earns me points and saves me a trip to the ATM.

Guest's picture

Actually, this can work really well. My best friend and I take a vacation every year, and whichever of us makes the reservation (hotel, airfare, etc.) puts it on her credit card and gets the rewards. We try to split it fairly evenly, but at the end of the trip we figure out who paid for what (a spreadsheet comes in handy) and whoever paid less pays the other the difference by check/cash. That way we each get rewards and we don't have to worry about keeping minute track during the trip.

For example, on a trip to Hawaii: I get the airfare, she gets the condo, I get the groceries for the week, she gets the rental car, I get the snorkeling, she gets the ziplining. At the end of the trip, she's paid $50 more than I have, so I pay her $25. Done, and we each get some rewards on our credit cards. The way to make this work, of course, is to have the money set aside before the trip so you can pay the credit cards off that billing cycle. :-)

Guest's picture
david M

Citibank Thank You network ofter gives 5% on gas, food and pharmacies for 6 or 12 months. A great way to get extra points is to buy gift cards during the 5% period and then use them later.

The gift cards I can easily use are for food stores - thus before my bonus period ended I purchased $200 in gift cards to 3 different food stores or $600 which got me $30 in bonus or an extra $24 in bonus points. During the month after the bonus points expired I used those $600 worth of cards. Also during the bonus point period I puchased over $1,000 in Amazon gift cards which netted me $50 or $45 extra dollars in points!!!!

Guest's picture
Debbie M

I like #2, use the card for all your usual purchases, but I was hoping for something less obvious in this article.

#1, pick the right card, may not work because they can change the card on you. Then you cancel that card and again pick the right card. Repeat every few years. This sort of activity is not great for your credit score.

#3, use the card for large purchases, sometimes works, but often doesn't. The place I bought a car from did not accept credit cards for example, and lots of places charge a bigger fee than the reward you get.

#4, repay debts with it, again didn't work for me because the fees were higher than the rewards.

#5, offer to pay for my friends - this backfires if your friend forgets to pay you back (and you forget that they didn't pay you back). Also, nowadays it seems like everyone wants to whip out their credit card and take everyone else's cash and it gets annoying, especially if they don't tip well and especially when no one even brings cash, let alone exact change.

I don't have any other tips besides:
* Don't forget to activate the rewards if you have the kind that have to be activated periodically.
* Don't get caught up in strategies that you find are leading you to spend more. If you pay late fees, or find yourself using the rewards as an excuse to talk yourself into buying things, etc., it's time to change tactics.
* Compare the value of the rewards--cash is definitely good, but other things may give you a better value IF you were going to get those other things anyway.
* If your rewards change, stock up in rewarded categories (of things you would have gotten anyway, that won't go bad, for which you have room, etc.) before the change. For example, my rewards card offers extra percentage points this quarter for purchases in the categories of dining, department stores, movies, and charity. You can't really stock up on dining or movies (unless you move date night or some other tradition back into the quarter or unless you can get gift cards that qualify), but I held off on September's charitable contribution until October and will make January's in December.

Guest's picture

I know this goes against the definition of "credit", but for me the golden rule of using a credit card is to never (and I mean never!), carry a balance to the next month. This rule removes completly the interest rate of the card out of the equation.

Guest's picture

If you are going to be doing things like travelling or shopping online, check with your credit card to see if they offer a bonus for going through their website/'rewards mall'. The prices are the same as going directly to the relevent website, and you get extra rewards. I do this all the time when I book hotel rooms and rental cars.

Guest's picture

You could also do online shopping through Ebates. They have most major retailers and you get cash rewards. So you can get double rewards for the same purchase.

Guest's picture

This post is like the strategy to a game. Too many people get caught by this little cash rewards offer; it is not about spending way more to get a little reward, that just sounds silly. It is all about applying your cash reward card in the best way possible to your current spending. There are dos and there are don'ts, and this post does an awesome job of outlining those. Thanks!

Guest's picture

#6: As a cash-discount negotator! I use my rewards as a floor - as a negotiating point to get a higher discount than my points. I'll whip out my Fidelity 2% amex and then casually ask for a larger discount if I pay cash. You'd be surprised how many times it works. I've been meaning to do a post on this technique with some examples of when it works (and when it doesn't...). Maybe I'll do it for next week.

Guest's picture

"The first place most consumers go wrong when it comes to earning rewards is assuming they need to somehow start spending more money."

- Well in my case i did the same thing in the beginning, now i'm a little bit better in organizing and checking my warranty in case we pass our credit limits.