When it comes to building brand loyalty among their customers, companies have increasingly turned to credit cards. Many people look at co-branded credit cards and think of airline miles or hotel points.
These are definitely great options for those who like to travel. However, they are also quite limited in their redemption options. This is why cards that provide a certain number of points that can turn into cash are great options. The popularity of taking cash back on credit cards grew during the COVID-19 pandemic because people could not get out and use their travel points.
Cash Back Rewards Are Easy To Earn
There are some credit cards that pay consumers a point for each dollar they spend. These points are usually worth one cent each. Those who spend $1,000 a month will wind up with 1,000 points worth $10. Other banks are more generous with the rewards they offer.
Cards offering 1.5 or two points per dollar are common. Some of these come with a bonus in certain categories. For example, it’s possible to earn three points per dollar on spending at restaurants or gas stations with some cards.
According to the experts at SoFi, it’s never been easier to earn cash back with a credit card. SoFi now offers a credit card to those who hold a checking or savings account with them. This card offers 3% cash back on every dollar spent for the first 365 days the account is open.
This is in addition to a cash bonus for those who transfer money into a SoFi account via direct deposit. The bonus caps out at $300 for those who transfer at least $5,000 within the first month. When added to the 3% cash back on every dollar spent, this can really add up to a nice sum through the first year and beyond.
Cash Back Rewards Are Easy To Redeem
In addition to the ability to earn points easily, it’s also relatively easy to redeem them. With a credit card that earns points for only one airline, it can be difficult to find a flight that qualifies for a good redemption. Those looking for a flight with few stops or short layovers can find it even more difficult to find an appropriate redemption.
This is not the case with cash back. Many credit cards allow cardholders to redeem as little as $25. Statement credits are one option for redeeming the points. Some banks will send a check to those who ask for one. Still, other cards are tied to major brokerages. These allow cardholders to deposit their cash rewards into an investment account. Over time, the money invested in such an account could grow to a major stash that could partially fund a nice retirement. The best thing about cash back is the fact that it can literally be used for anything that cash can buy.
The recent COVID-19 pandemic caused many people to rethink their credit card rewards strategy. Cards that offer cash back have the greatest utility because the rewards have the greatest flexibility, regardless of whether cardholders want to travel or build wealth over time.