Having some money set aside for a rainy day gives you the resources to handle unexpected car repairs or other emergencies without going into debt. However, making those contributions to your savings or retirement fund can be difficult, especially if you’re living on a budget. Fortunately, many credit unions and banks offer cards with cash-back rewards, which is essentially free money you can funnel directly into a savings account. 

Using Cash-Back Cards as Savings Tools

What Are Cash-Back Cards?

Many credit cards offer airline miles or sign-up bonuses to entice shoppers to use their products. Cash-back cards, on the other hand, give you back a percentage of the money you spend on qualified purchases. Some credit or debit cards only give rewards for purchases made at certain retailers, while others give you cash back for all your activity.

Choosing a Cash-Back Card

Before deciding to use a credit or debit card as a savings tool, read the fine print to make sure it includes your current activity. Buying things you wouldn’t have purchased without the reward will cost you in the long run, leaving you even less to put towards savings. Cash-back debit cards that reward you for any purchase are an excellent option since you don’t have to change your spending habits.

Using Cash-Back Rewards for Savings

Some banks or credit unions let you direct your reward payments into a specific account, making it easy to put that money directly into your savings. Others automatically deposit it back into a checking account, after which you can transfer it into a savings account or roll it over into an IRA.
 

As one of Totowa’s most established credit unions, North Jersey Federal Credit Union has been providing custom-tailored, affordable financial services for over 80 years. With their innovative cash back program, account holders can earn 2% back on every purchase to help build their savings over time. Visit their website for more information on their credit and debit card options. Call the credit union at (973) 785-9200 to ask about opening an account.