If Millennials Switched To A Cash Back Card, Here’s How Much They Could Earn

It’s easy to save money on every purchase with a cashback credit card. Some cards make it super easy, giving you unlimited 2% cashback on every purchase. Other credit cards offer elevated rewards for specific spending categories.

You can technically get more cash back if you have a rotation of credit cards that offer 3%-5% cashback in specific categories. However, a card with unlimited 2% cashback is easy to find and provides a great starting point. Millennials can save extra money with these cards, but you would be surprised at how much the savings add up in the long run.

Clothing

The average millennial spends $2,070 per year on clothing and sneakers. You might as well get some cashback on those purchases, and it adds up if you get unlimited 2% cashback on your credit card. Just with clothing, a millennial can save $41.40 per year.

Food

The average millennial spends $6,370 per year on food. That comes to $530.80 per month, so a millennial with a family will likely spend more than that. You can save money in this category by cooking your own food and eating out less often. You’ll also get some money back if you use a credit card for those purchases. A 2% cashback credit card will give you $127.40 per year from this category.

Gas

The average millennial spends about $3,306.53 on gas each year. Gas price fluctuations and driving habits will play a role in how much you pay for gas. Assuming you spend as much as the average millennial and use a 2% cashback credit card, you will receive $66.13 per year.

Entertainment

The average millennial spends $3,457 on entertainment each year. You can save money by getting rid of unnecessary streaming subscriptions and looking for free entertainment options like movies at your local library. However, if you spend like the average millennial, a 2% cashback credit card will put an extra $69.14 in your pocket.

Travel

Travel is a big-ticket expense that comes to $4,400 per year for the average millennial. Traveling in areas that are a few hours away will save you money since you can drive instead of flying to those destinations. A 2% cashback credit card saves $88 per year if you spend like the average millennial.

How To Find The Best Cashback Credit Card

An unlimited 2% cashback credit card is a good place to start. Using the five spending categories we covered, the average millennial will save $392.07 per year. That’s a lot of extra money, but you should consider the following details about any credit card:

• Rewards program: Do you want unlimited 2% cashback for every purchase, or are you willing to open multiple credit cards to get elevated cashback for some categories? If you go the latter route, look for cards that offer higher cashback in your most active spending categories.
• Additional perks: Most credit cards offer 24/7 roadside assistance, but you may also get other bonuses that make traveling even better.
• Annual fees: You can find credit cards with no annual fees. However, you may have to pay a small fee each year for credit cards that have the best rewards. Annual fees are easier to justify for big spenders who can maximize their rewards.
• Interest rates: Credit card rewards won’t do you much good if you incur interest on your credit card debt. APRs are on the high end for these financial products.

This list can help you choose a better cashback credit card, but it’s best to compare options and see what you like. These are some of the best cashback credit cards to consider.

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