5 Unusual Ways to Use Your Cash Back Credit Card Rewards

Cash back rewards credit cards are one of the most popular types of credit cards. It's no surprise, considering you can use the money for virtually anything.

While many people put their cash back rewards toward their statement balance (a smart move!), there are some more creative ways to use that money. Here are a few.

1. Pay for child care

Child care expenses can eat into a family budget, costing parents up to 19% of their median income. Even if it's not taking up that much of your budget, it's likely still a major expense. The average amount parents spent on child care climbed to $11,582 last year.

Your cash back rewards likely won't cover all your child care expenses, but a year's worth of rewards could help cover the cost of a summer camp or part of one month's child care costs.

2. Birthday gifts for family

I often send my nieces and nephews cards for their birthdays, and for the younger ones, I frequently include a few dollars in the card. But with more than 10 nieces and nephews, even a small amount adds up quickly!

I've used annual cash back for Christmas gifts in the past, but applying it to any gift is a good idea, especially if you only need a few dollars here and there throughout the year.

3. Invest in the stock market

I don't use my credit card to pay for all my purchases, but during times that I use it frequently, I've earned more than $600 annually.

That's a nice chunk of change that could be put to good use if I invested it. Let's assume I start with $0 in a brokerage account and invest $50 monthly ($600 annually) in a low-cost index fund that earns an annual historical rate of return of 10.2%. In 10 years, I'd have $9,654!

4. Treat yourself

I remember working at a job I felt stuck in, and while I was looking for different work, I would set aside a small amount of money every few months to buy something for myself. I purchased exciting things like a weed trimmer, because I lead a fascinating life.

The point is that these small purchases allowed me to reap some small benefits from an unsatisfying job. Cash rewards cards can do the same. If you need a little motivation, use those rewards to give yourself a boost without having to tap into your monthly budget.

5. Pay your tax bill

We're halfway through the year, and some people may already be thinking about how much they might owe the IRS this year. As someone who pays estimated taxes throughout the year, it's certainly on my mind.

To help offset your tax bill for this year, now might be a good time to let your cash back rewards accumulate. While it may not cover everything you owe, even an extra several hundred dollars could make your repayment much easier.

Cash back rewards are a great credit card perk, especially if you use them to cover everyday expenses. With a bit of planning, you can set aside your cash back rewards to cover unexpected bills or for fun gifts for yourself and others.