Many credit cards offer cash back on purchases. These cards also come with an initial bonus that can be redeemed as cash or as gift cards or statement credits.
One such card is Discover Cashback Rewards Card. It gives you 5% cash back on various categories. Every year they have a quarter where you can get 5% for your Amazon.com purchases. The trick is to park a large amount of money , for example $1500 to your Amazon gift card to spend your entire year. This way you get 5% for your Amazon shopping.
How to get 6% cash back instead of 5%
The cash back can be redeemed for gift cards, for example Bay Area restaurants, sometimes with an additional 1% bonus. Thus the cash back really comes to 6%. For example, one such gift card is Black Angus Steakhouse gift card that we get from Discover cash back rewards. This will allow you to enjoy little fun on the side.
There is also a signup bonus: Get a $50 Statement Credit after you apply and make your first purchase within 3 months of being approved.
6% risk free return on your money is very good compared to other investments out there. This 6% you gain is not taxable.
Typical cashback calendar looks like this:
What are the redemption options?
Here is what it looks like and further below are example of redemptions for gift cards:
