How to use cashback and rewards programs strategically

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Introduction

Person receiving cashback notification on their smartphone

Using cashback and rewards programs in 2025 isn’t just about saving a few bucks—it’s a way to turn everyday purchases into real value. But many Americans leave money on the table by not using them strategically. According to a 2025 NerdWallet survey, 38% of cardholders fail to redeem rewards each year. Here's how to make your spending work for you.

1. Pick the Right Rewards Tool for Your Lifestyle

Whether you prefer cashback apps, credit cards, or loyalty programs, choose based on where you spend the most. For example, gas-heavy drivers may benefit from cards like the Citi Custom Cash, while grocery shoppers can leverage the Blue Cash Preferred by Amex. Apps like Rakuten and Upside are also great for everyday savings.

2. Stack Rewards for Maximum Value

Combine multiple programs to earn double or triple rewards. For example, use Amazon for online purchases, pay with a rewards credit card, and redeem through a store loyalty program. As we discussed in our side hustle article, even passive earnings like cashback can help grow your emergency fund.

3. Automate and Track Redemptions

Use your card’s app or platforms like AwardWallet to monitor points and cashback balances. Set up alerts for point expirations or bonus categories. In 2025, some cards let you auto-redeem into savings or statement credits—use this feature to stay consistent.

4. Don’t Overspend for the Sake of Rewards

This is where many fall into a trap. Spending more than you can pay off just to earn 1–2% cashback can cost far more in interest. In our post on whether to save or pay debt first, we emphasized that rewards never beat high-interest debt.

5. Leverage Sign-Up Bonuses (Responsibly)

Many cards offer $150–$500 sign-up bonuses after meeting spending thresholds. Use these for planned purchases like insurance premiums or big grocery runs. Avoid chasing rewards with unplanned spending—it’s not a real gain if it leads to debt.

Final Thoughts

Chart or infographic showing how to stack rewards and cashback tools

Cashback and rewards programs are powerful tools—but only if used wisely. With the right setup, they can supplement your savings goals, help cover rising costs, or even fund travel. Just remember: it’s only a reward if it doesn’t cost you more to earn it.

Published by financewisedaily

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