I’m not much of a gamer when it comes to churning credit cards for rewards, travel or cash back. (I’ve only once applied for a credit card in order to get a free flight — which I still haven’t cashed in on because I’m saving up for Hawaii.) But I recently wandered into the wonderful world of stacking cash back rewards.
Full disclosure: this won’t be a long-term game for me because I’m really cashing in on Discover’s 5% cash back for online shopping this quarter and I do most of my holiday shopping online.
For all you rookies to stacking cash back, it goes a little something like this:
2) Click through their site to your intended shopping site (ie: Amazon, Sephora or TOMS).
3) Make your purchase on intended site with a cash back credit card.
Confused? Let’s break it down with a real example.
Peach has been harping about wanting a very specific type of gloves. After a few unsuccessful attempts to find them in a brick-and-mortar store (silly millennial), I opted for Amazon. Within a few minutes I found what he wanted, but instead of checking out right through Amazon I went to Rakuten. Rakuten was offering 6% cash back on Amazon purchases.
Once on Rakuten, I clicked through to Amazon. When I made my purchase, I used my Discover It card, to cash in on that 5% cash back for online shopping this quarter.
So, my $16 purchase received 6% cash back from Rakuten plus an additional 5% cash back from my Discover card.
Sure, it was on a paltry $16, so I only earned $0.96 from Rakuten and $0.80 from Discover for a staggering $1.76, but say I make a $100 purchase. That’ll be $11 in cash back on a single purchase. Not too shabby.
As with all things related to credit cards and gaming a system, there are catches.
For starters, referral sites don’t give you cash back on any purchase. Right now, Rakuten and Mr. Rebates are offering cash back on Amazon for purchases in children’s, women and men’s fashion, home & kitchen, toys & games and Amazon local. The amount of cash back also fluctuates rather quickly. During Black Friday, you could score 8% back on Rakuten, but now it’s down to 4%.
Second, your cash back card might not offer cash back on a site you’re going to through a referral. I recently bought a pair of shoes on TOMS.com, and earned $6.56 back through Rakuten for the purchase, but Discover didn’t count it as shopping online, so I didn’t get the extra 5%.
If you have a flat-rate cash back card like Quicksilver, Fidelity or Citi Double Cash, then you’ll be guaranteed some level of cash back above 1% — but I don’t have any of those cards.
Some of you may be wondering how these referral sites work. I admit they sounded a little sketchy to me at first.
Basically, you can think about it just like a credit card reward. Credit card companies offer you a piece of the interchange fee they charge merchants in order to incentivize you to use their cards. That’s why (and how) companies offer cash back deals! And why you should be skeptical of of cash back above two percent — but that’s a post for another time.
These referral sites receive a kick back from retailers for sending you to the retailer’s online store. As a repayment, the referral site offers you – the customer – a little piece of the kick back.
You’re not going to get rich using these sites, but if you believe every dollar counts and you’re already going to be buying something online, it’s probably worth the extra two minutes of your time to see if you can get some cash back!
*If you sign up for Rakuten or Mr. Rebates with my referral code and make a purchase then I will receive a referral bonus.