Do All Purchases Qualify for Cashback?
Cashback credit cards can help you earn money back on your spending across many categories. Making purchases is an easy way to accumulate cash rewards over time.
But do all types of credit card purchases qualify for earning cashback? Are there transactions that don’t earn rewards? In this comprehensive guide, we’ll look at what spending earns cashback and what is excluded from rewards programs.
Overview of Cashback Credit Cards
With cashback credit cards, you earn a percentage of money back on the total purchases made during each billing cycle. Common rewards rates include:
- 1 – 1.5% cashback on all purchases
- 3 – 5% cashback on select bonus categories like groceries, dining, etc.
- Up to 10% cashback on special intro offers
As long as you pay your bill on time, the rewards you earn remain available in your account for future redemption. You can request payout after hitting minimum redemption amounts.
Now let’s look at what card spending typically qualifies for earning cash rewards.
Purchases That Qualify for Cashback
The vast majority of purchases made with a cashback credit card will earn rewards at the card’s standard rates. Here are examples of qualifying transactions:
- Dining at restaurants
- Takeout and delivery food
- Streaming services
- Shopping online and in stores
- Medical/healthcare spending
- Cell phone bills
- Rideshares like Uber/Lyft
- Airfare and hotel bookings
- Furniture and appliance purchases
- Electronics like laptops and tablets
- Home improvement supplies
- Children’s activities and lessons
- Gym and fitness memberships
- Insurance copays and deductibles
Essentially, any lawful goods or services you pay for with a cashback card will qualify and earn rewards based on the amounts charged.
Purchases That Don’t Earn Cashback
While most legitimate transactions qualify for cashback, there are some exceptions. Here are examples of purchases that don’t earn rewards:
- Cash advances
- Balance transfers
- Fees like late fees, overlimit fees, etc
- Finance charges and interest payments
- Gift cards bought with a credit card
- Gambling and casino gaming chips
- Bail bonds
- Fines like parking tickets
- Anything deemed high-risk or illegal
These types of transactions represent costs associated with credit itself, not purchases. Carrying debt service fees or cash withdrawals don’t qualify as normal purchases made with a cashback card.
Other Limitations on Earning Cashback
Beyond the examples above, there are also some other potential limitations on cashback rewards from credit card issuers:
- Foreign transaction fees don’t earn rewards – You pay these on international purchases
- Merchants categorized differently – Some may code like a cash advance even if buying goods
- Maximum rewards caps – Capping bonus category spending thresholds
- Ineligible purchases – Gift cards, money orders, etc as outlined by issuer
- Account status – Most rewards depend on your account being open and in good standing
- Returns and reversals – Cashback may be lost when purchases are refunded
Carefully review your card’s program details to understand all the nuances of what does and does not qualify for earning cash rewards.
Ways to Maximize Cashback Earned
To ensure you earn the maximum cash rewards with your credit card:
- Use your card for as many eligible purchases as possible – groceries, gas, bills, entertainment, etc
- Take advantage of bonus cashback categories and remember to activate them as required
- Be cautious with borderline merchants to avoid non-qualifying purchases
- Follow up on missing rewards – check statements routinely to catch any errors
- Pay your bill on time and in full each month – avoid interest negating your rewards!
- Redeem cash rewards at least annually – don’t leave earnings on the table
- Research referral bonuses – some cards give cash rewards for referring friends
- Read issuer communications – stay up to date on program policies and changes
- Compare other cards annually – make sure you still have the optimal cashback rewards for your spending
Common Questions About Cashback Purchases
Do I earn cashback when using my card via Apple Pay or Google Pay?
Yes, mobile wallet transactions qualify for cashback rewards on purchases the same as using the physical card.
What if my cashback earnings seem lower than they should be?
Check your account activity to ensure you actually completed purchases and didn’t just authorize them. If rewards are still missing, contact your card issuer.
Can I request rewards for a fee I was charged?
Unfortunately cashback is not earned on credit card fees for things like late payments, overlimit fees, etc. Those represent costs of having the card itself.
Are there purchases I can prepay with my card to earn cashback?
Yes, as long as the merchant or category qualifies, prepaying items like insurance premiums, HOA dues, etc can allow earning cash rewards on charges you’ll incur anyway.
Can I buy gift cards with my cashback credit card?
Technically you can buy gift cards, but many issuers exclude these purchases from earning rewards because cardholders were abusing this practice. Check your program policies.
The Bottom Line
Nearly any standard purchase you make with your cashback credit card will qualify and earn rewards, presuming it is a legitimate transaction made in accordance with card policies. But items like cash advances, fees, and gambling as well as foreign transactions and gift cards may not earn cashback.
Review your monthly statements routinely and follow up on any missing or lower than expected rewards. Monitoring your earnings helps ensure you receive full benefits. Just use your card responsibly for all your normal household spending to let cash rewards automatically build up.