These days it is possible to get 5% cash back on a lot of your purchases. One of the ways I get 5% cashback on my purchases is by buying things in the rotating 5% cash back categories offered by my Chase Freedom and Discover it® card. Right now the Discover it® card is offering 5% cashback on home improvement purchases and the Chase Freedom card is offering 5% cash on restaurants, movies, and Lowes until the end of June. Both of them have a $1500 limit on purchases that will earn the cash back but since I’m not a big spender that is more than I would normally spend. It is still possible to get the full advantage of the 5% cash back offered though.
The methods to stretch your available cash back are fairly obvious but they didn’t actually occur to me until I read about them in a forum. The first method to stretch your cash back is to buy a gift card at a store in the current 5% cash back category. For example, since restaurants are in the 5% cash back category I could buy some $50 gift cards at McDonalds, Burger King, etc. for however much I think I’d spend at restaurants in the next few months. I’d want to make sure I didn’t spend over $1500 so I’d get the 5% on all my purchases. I don’t spend nearly that much at restaurants in a year so I wouldn’t have a problem with staying under the $1500 amount. I do use this strategy, but I usually just pick up a couple of gift cards before the end of the quarter and don’t worry about getting the absolute maximum amount of cash back.
Another method also involves buying gift cards. The difference here is that you are buying gift cards for stores that are outside the current category. For example, the Discover it® card is currently offering 5% cashback at home improvement stores. This isn’t beneficial to me since I don’t own a home and don’t really need anything from a home improvement store. To still earn a little cash back I’ve been buying $50 gas cards at Lowes. Even though I’m buying a gas card the purchase is still categorized as a home improvement purchase I still earn the bonus cash back. I’m only saving $2.50 with each purchase but it only takes 5 minutes and Lowes is on my way home from work so I think it is a good use of my time.
If you are shopping online you should go through a online cash back shopping portal like Mr. Rebates. Depending on the merchant you can earn even more than 5% cash back.
These are only some of the strategies to stretch your 5% cash back. These are the simplest strategies but if people are interested in reading about more strategies I will write about them.