Credit cards can lead to a lot of debt, but if you use them correctly, you can actually get a lot of money and perks back. One Redditor has kept up with their bills but doesn’t have any credit cards. The individual is wondering how much they’re missing out by not using a cashback credit card to make their purchases.

This post got a lot of attention in the Personal Finance Reddit community, and several commenters shared their thoughts. A bunch of people also shared how they use cashback rewards for various expenses.

The Amount You Receive Depends On How Much You Spend

The Redditor should start by calculating how much they spend each month. You can then use that figure to figure out how much you spend every year. Knowing how much you spend makes it easier to determine how much you can get back from a cashback credit card.

While you can open multiple cashback credit cards to maximize your rewards, a card that offers unlimited 2% cashback on every purchase is pretty straightforward for this example.

The average American spends approximately $6,080 per month. Using this figure, we can start to discover the impact of a cashback credit card. If you get 2% cashback, your credit card issuer will give you $121,60 per month. That comes to $1,459.20 per year.

Pay Off The Entire Credit Card Balance Every Month

Many commenters recommended paying off the entire balance at the end of each month. While this won’t be a problem for the original poster, it’s important to keep this in mind if you have a credit card or want to open one.

If you pay the balance in full at the end of each month, you won’t have to pay any interest. Credit cards are notorious for high interest rates that can get above 30% APR in some cases. However, you get all of the upside if you pay it off.

A good way to approach your credit card is to avoid spending more than you can afford. If you earn $5,000 per month, you should not spend more than $5,000 per month on your credit card. If you have to borrow money that you can’t pay back by the end of the month, a personal loan is likely the better option.

Cashback Cards Come With Additional Perks

While cashback rewards often steal the show, your card likely comes with additional perks, such as discounts for various products and services. If you use a travel card, you may also get free nights at hotels or discounts on your flights.

When comparing credit cards, don’t just look at the reward programs. Some cards are very generous with their extra perks, while others don’t have many benefits beyond cashback.

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