Wouldn’t it be great if you got paid for the spending you’re already doing? Well, there are a few ways where you can make this dream a reality.

This week, we’ll discuss a few ways that savvy shoppers can earn a little something in return for their purchases—specifically, cashback and rebates.

Cashback: What It Is and How It Works

Credit cards are one of the most common ways to pay for goods and services. Chances are, you use one for everyday purchases or even as a “just in case” option for emergencies.

Lending institutions implement "rewards programs" to encourage people to use their credit cards more often. One such reward is cashback.

An in-depth article from Investopedia defines “cashback” as:

• A refund of a small percentage of a card purchase.
  

Cashback is most commonly found in credit cards with rewards programs. Debit cards may also provide cashback, but their execution differs significantly. This article will focus on its use in credit (although some debit cards may have a rewards program including cashback).

Credit cards with cashback may offer this reward in several ways. Here are two of them:

A cashback-centric card may use this benefit as its flagship feature. When you make purchases with the card, a certain percentage is tallied as the cashback offer. When your statement drops, you get a listing of the total cashback offer, which can then be redeemed through a direct deposit or check. There may also be an option to receive it as a gift card.

Cashback cards list a percentage defining the size of your reward. For example, take a cashback card that says you can earn up to 2% cashback on your purchases. If you charge $1,000 during your statement period, you will get $20 back.

Another option is a points-based card. Instead of a direct percentage of purchases being converted to cashback, the amount you charge earns “points” that may be redeemed for several things. You may be able to redeem the points for cashback, and how much you get depends on the rewards program. You may receive your cashback as a direct deposit, statement credit, or gift card.

Points-based cards are different because their programs allow you to use your points for other things, like merchandise, tickets for travel, or statement credit. This can be considered a more flexible option, depending on your preferences.

A word of caution: cashback is not free money. No matter the program, cashback is directly related to how much you charge, and you will have to pay off your balance just like a regular credit card. We recommend reviewing a guide on sustainable credit card use to understand the basics of spending with credit.

Why take advantage of a cashback program? The most straightforward answer is that you’re getting money for using your credit card. The money you receive can be used in many ways, including:

• Adding cushion to a savings account
• Paying down an existing balance
• Simply having extra pocket money
  

The Lowdown on Rebates

Discussing cashback also conjures up an old-school, but no less relevant, way of getting a bit back for your purchases. We’re talking about rebates.

A rebate is a type of discount where a consumer receives payment for buying a product or service from a company. Typically, the buyer pays full price for something and receives a set amount of money or a discount for another product.

Rebate offers are time-sensitive and require the buyer to redeem the reward actively. In simple terms, the process goes like this:

• You buy a product or service offering a rebate.
• You fill out and submit a form to the company with proof of purchase.
• You receive payment after the company processes your rebate.
  

It can take several weeks for a rebate to arrive. The company may issue the rebate payment as a check, gift card, or coupon for another item.

Rebates reward buyers for trying out new products and services. Like cashback, rebates can be used to pad out a savings account or have some spending money on hand for later.

Where do you find rebates? There are plenty of avenues to hunt these deals. One key aspect of rebate offers is that they are mainly manufacturer-based. So, if you plan to buy something from a popular brand, you can look at their website for any active rebates.

“Big box” and department stores often partner with manufacturers to promote rebate offers. If there’s a particular chain you love shopping at, they may have a listing of rebates on their website for you to browse.

These days, shopping apps list cashback and rebate offers from stores and brands. It might be worth downloading and browsing these apps to find special offers and discounts. We’ve briefly covered shopping apps before, but some apps to start your search include:

• Honey
• Ibotta
• RetailMeNot
  

Spending is a facet of our day-to-day life, but that doesn’t mean it has to be a drain. Consider cashback and hunt for rebates to put some extra money back in your wallet.

If you want to learn more about rewards programs, why not try First Florida? We offer the Diamond Rewards Visa® credit card and Rewards Checking, offering a little extra for your everyday purchases. Explore our website or visit a branch for more information.