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Here’s How Ebates And Other Cashback Sites Really Work

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Earning discounts and cash back just for shopping online might sound too good to be true. But cashback websites such as Ebates, BeFrugal, Swagbucks, Ibotta and Mr. Rebates can actually work. And as long as you go through them for purchases you need to make anyway, using these sites can be more lucrative than shopping with a rewards credit card.

Ebates is one of the largest and most commonly known cashback sites. Founded in in 1999, the site has more than 10 million users and has paid out more than $1 billion in cashback rewards. And numerous personal finance bloggers told HuffPost they felt it offered the best deals compared to other similar sites.

Kate Horrell, a personal financial educator for military families, started using Ebates nearly 20 years ago. At the time, she had a new baby and was on a tight budget, and retailers were offering huge rebates through the site. “It was a good way to get some of those things we needed at very low prices,” she said.

Horrell has received a total of $2,355.93 in rebates since she signed up, according to a screenshot of her account that she shared with HuffPost.

Marc Andre, a personal finance blogger at VitalDollar.com, is also a regular Ebates user. “Just a few days ago, I made a $50 purchase and Ebates saved me $10,” he told HuffPost. “All I had to do to get that $10 was click once on the browser alert to activate Ebates, and click a second time to let Ebates try the coupon code that it was suggesting. I didn’t even know that site participated with Ebates, so without the browser extension I would have paid an extra $10 for the same purchase.”

Is Ebates A Scam?

Some people wonder if sites like Ebates are a scam. How can they pay out all that cash? According to Chelsea Hudson, senior public relations officer for Ebates competitor TopCashback, the misconception occurs largely because people don’t understand how these types of companies make money.

Hudson said cashback sites work with affiliate networks that represent online retailers. The cashback sites receive a negotiated percentage of the purchase price for referring new consumers. Some of that cut goes to the shopper and the site keeps the rest.

“When users make a purchase via a cashback site, the site places a cookie to track your activity,” Hudson said, noting that cookies are simple text files that store information such as the site name and a unique user ID. “Cashback sites use cookies to remember the link you used to get to the retailer’s site from the cashback site. This is vital to your cashback journey; without a cookie, the cashback site and affiliate network can’t confirm your purchase or your referral.”

However, Hudson said that once the retailer confirms the referral was made by a cashback site, it can take several additional weeks to receive the money from the network. “Cashback process speeds vary between retailers,” she said. “For example, a major online retailer like Walmart has a quicker payout speed than a travel merchant, since the majority of travel merchants make cashback payable after your stay.”

In fact, cashback sites can take anywhere from a couple weeks to several months to pay members their rewards, due to the affiliate networks’ process for confirming purchases. That can seem like a red flag to members who assume they’ll be paid out instantly.

“The number one complaint made by users of popular cashback sites like Ebates and TopCashback across review sites is ‘I never received my cash back,’” she said.

How Ebates Works

You can sign up for Ebates using your email address, Google or Facebook account. The easiest way to use Ebates is when shopping online, but it’s also possible to earn rewards in-store as well.

There are a few ways to save money while shopping online. The first is to search on Ebates.com for a product across all of the site’s participating retailers and find the best cashback deal. Once you do, click through to the retailer’s site and proceed with your purchase as you normally would.

The second is to use the Ebates browser extension for Chrome or Firefox. If you’re on a retailer’s website that offers cash back, the extension will display a button notifying you.

To test it out, I headed over to Target.com. Immediately, the Ebates extension informed me that I could activate up to 1 percent cash back, with the exception of a few categories. By clicking the red button, the cashback deal would automatically be applied to my purchases through the site.

Target.com

The Ebates Chrome extension notifies shoppers of cash back opportunities at Target.

Finally, you can take advantage of Ebates through online search results when the extension is activated. For example, when I searched Google for “coffee mugs,” Ebates listed the cashback rewards opportunities right in the search results. I could then click through to the retailer’s website and activate the cashback offer to secure it.

In addition to earning cash back, Ebates also finds online coupons and promo codes you can try out to earn additional discounts. This feature is similar to tools such as Honey and Wikibuy, which might do a better job of aggregating these types of deals. Even so, it doesn’t hurt to have one more tool scouring the web for added deals.

Ebates will pay out our cash back every three months as long as your balance is at least $5. You can choose to be paid via check or PayPal.

Cashback Sites Do Have A Few Drawbacks

Even though Ebates is not a scam, the service has some downsides you should know about before you sign up:

  • Privacy concerns: Though you don’t have to use a Facebook account to log into Ebates, that is an option. However, you might find that Facebook’s platform is too invasive when it comes to gathering and sharing data. Plus, as Hudson mentioned, cashback sites like Ebates need to use tracking cookies to work, which follow your activity online.

  • Unpredictable rewards: Another somewhat annoying feature of Ebates and similar sites is that the cashback offerings can vary day to day. That means you might make a purchase today that awards you 2 percent cash back, only to find out a week later that you can make the same purchase for 5 percent back. If you can wait a bit and scout out the higher cashback rewards, using Ebates is worth it. But if you need to make an immediate purchase, you might miss out on some savings.

  • Some products don’t qualify: You might also be disappointed to find that even though Ebates offers lucrative cashback on a certain site, not all the products necessarily qualify. Take the Target example from above ― though the site was offering 1 percent back, those rewards didn’t apply to items such as electronics, toys or books.

  • Delay between purchase and payout: As Hudson also mentioned, one of the biggest complaints about Ebates and other cashback sites is the amount of time it takes to get the money. With Ebates, you can expect a check four times a year at most ― and only if you’ve accumulated at least $5 ― so you can’t really rely on consistent income by using it.

How To Maximize Your Savings

Using cashback sites on their own can net you some pretty valuable rewards. But if you want to increase those savings, there are a few best practices and tricks you can employ.

Enable cookies. Since tracking cookies are necessary for cashback sites to work, you’ll need to ensure you’re being tracked properly. Hudson said you should clear your cookies before you use a cashback site to ensure any previous retailer visits are wiped from your history, and then make sure cookies are enabled. “Don’t open any additional tabs or deviate from the journey by browsing other sites,” she said. Also be sure to turn off any ad blockers or firewalls that could prevent cookies from working.

Check competitors. Ben Luthi, a money and travel writer, said that if you really want to maximize your return, you should check the site Cashback Monitor first. “It has just about every cashback website, points and miles portal and more,” he said. All you have to do is enter the online retailer in the search bar and you’ll get the current cashback rate among all companies so you can go with the best deal. In fact, Luthi said he likes to use Ebates on occasion, but personally prefers the deals he finds on TopCashback and Swagbucks.

Add the browser extension. Luthi also said it’s important to add the Chrome or Firefox extension to your browser, which will give you a pop up if you’re on a website with a deal. It’ll also display cashback opportunities in Google search results. “I’m a lazy online shopper, and that eliminates the step of visiting the cashback website and clicking through to the retailer from there,” Luthi said.

Stack it with other rewards. “What I really love about Ebates is that you can combine it with other cash back and rewards,” Andre said. By stacking a few levels of rewards, you’ll save even more. For example, Andre will buy discounted gift cards at Raise.com.

“I might pay $45 for a $50 restaurant gift card at Raise ― a savings of 10 [percent],” he said. Then Ebates will offer an additional 1 percent cash back for purchases at Raise.

“And if I purchase with my Citi Double Cash credit card, I’ll get another 2 percent cash back,” Andre added. In that scenario, he earns a total of 13 percent cash back. Not too shabby.

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4 things kids need to know about money

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(NC) Responsible spending includes knowing the difference between wants and needs. Back-to-school season, with added expenses and expectations around spending, is the perfect time to not only build your own budget for the year ahead, but also to introduce your own children to the concept of budgeting.

The experts at Capital One break down four basic things that every child should know about money, along with tips for bringing real-life examples into the conversation.

What money is. There’s no need for a full economic lesson,but knowing that money can be exchanged for goods and services, and that the government backs its value, is a great start.
How to earn money. Once your child understands what money is, use this foundational knowledge to connect the concepts of money and work. Start with the simple concept that people go to work in exchange for an income, and explain how it may take time (and work) to save for that new pair of sneakers or backpack. This can help kids develop patience and alleviate the pressure to purchase new items right away that might not be in your budget.
The many ways to pay. While there is a myriad of methods to pay for something in today’s digital age, you can start by explaining the difference between cash, debit and credit. When teaching your kids about credit, real examples help. For instance, if your child insists on a grocery store treat, offer to buy it for them as long as they pay you back from their allowance in a timely manner. If you need a refresher, tools like Capital One’s Credit Keeper can help you better understand your own credit score and the importance of that score to overall financial health.
How to build and follow a budget. This is where earning, spending, saving and sharing all come together. Build a budget that is realistic based on your income and spending needs and take advantage of banking apps to keep tabs on your spending in real-time. Have your kids think about how they might split their allowance into saving, spending and giving back to help them better understand money management.

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20 Percent Of Americans In Relationships Are Committing Financial Infidelity

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Nearly 30 million Americans are hiding a checking, savings, or credit card account from their spouse or live in partner, according to a new survey from CreditCards.com. That’s roughly 1 in 5 that currently have a live in partner or a spouse.

Around 5 million people — or 3 percent — used to commit “financial infidelity,” but no longer do.

Of all the respondents, millennials were more likely than other age groups to hide financial information from their partner. While 15 percent of older generations hid accounts from their partner, 28 percent of millennials were financially dishonest.

Regionally, Americans living in the South and the West were more likely to financially “cheat” than those living in the Northeast and Midwest.

Insecurity about earning and spending could drive some of this infidelity, according to CreditCards.com industry analyst Ted Rossman.

When it comes to millennials, witnessing divorce could have caused those aged 18-37 to try and squirrel away from Rossman calls a “freedom fund”.

“They’ve got this safety net,” Rossman said. They’re asking: “What if this relationship doesn’t work out?”

As bad as physical infidelity

More than half (55 percent) of those surveyed believed that financial infidelity was just as bad as physically cheating. That’s including some 20 percent who believed that financially cheating was worse.

But despite this, most didn’t find this to be a deal breaker.

Over 80 percent surveyed said they would be upset, but wouldn’t end the relationship. Only 2 percent of those asked would end the relationship if they discovered their spouse or partner was hiding $5,000 or more in credit card debt. That number however is highest among those lower middle class households ($30,000-$49,999 income bracket): Nearly 10 percent would break things off as a result.

Roughly 15 percent said they wouldn’t care at all. Studies do show however that money troubles is the leading cause of stress in a relationship.

That’s why, Rossman says, it’s important to share that information with your partner.

“Talking about money with your spouse isn’t always easy, but it has to be done,” he said. “You can still maintain some privacy over your finances, and even keep separate accounts if you and your spouse agree, but you need to get on the same page regarding your general direction, otherwise your financial union is doomed to fail.”

With credit card rates hovering at an average of 19.24 percent APR, hiding financial information from a partner could be financially devastating.

But, Rossman adds, it’s not just about the economic impact but also the erosion of trust.

“More than the dollars and cents is that trust factor,” he said. “I think losing that trust is so hard to regain. That could be a long lasting wedge.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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7 Examples Of Terrible Financial Advice We’ve Heard

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Between television, radio, the internet and well-meaning but presumptuous friends and family, we’re inundated with unsolicited advice on a daily basis. And when it comes to money, there’s a ton of terrible advice out there. Even so-called experts can lead us astray sometimes.

Have you been duped? Here are a few examples of the worst money advice advisers, bloggers and other personal finance pros have heard.

1. Carry a balance to increase your credit score.

Ben Luthi, a money and travel writer, said that a friend once told him that his mortgage loan officer advised him to carry a balance on his credit card in order to improve his credit score. In fact, the loan officer recommended keeping the balance at around 50 percent of his credit limit.

“This is the absolute worst financial advice I’ve ever heard for several reasons,” Luthi said. For one, carrying a credit card balance doesn’t have any effect on your credit at all. “What it does do is ensure that you pay a high interest rate on your balance every month, neutralizing any other benefits you might get from the card,” Luthi explained. “Also, keeping a 50 percent credit utilization is a surefire way to hurt your credit score, not help it.”

Some credit experts recommend keeping your balance below 30 percent of the card limit, but even that’s not a hard-and-fast rule. Keeping your balance as low as possible and paying the bill on time each month is how you improve your score.

2. Avoid credit cards ― period.

Credit cards can be a slippery slope for some people; overspending can lead to a cycle of debt that’s tough to escape.

But avoiding credit cards on principle, something personal finance gurus like Dave Ramsey push hard, robs you of all their potential benefits.

“Credit cards are a good tool for building credit and earning rewards,” explained personal finance writer Kim Porter. “Plus, there are lots of ways to avoid debt, like using the card only for monthly bills, paying off the card every month and tracking your spending.”

If you struggle with debt, a credit card is probably not for you. At least not right now. But if you are on top of your finances and want to leverage debt in a strategic way, a credit card can help you do just that.

3. The mortgage you’re approved for is what you can afford.

“The worst financial advice I hear is to buy as much house as you can afford,” said R.J. Weiss, a certified financial planner who founded the blog The Ways to Wealth. He explained that most lenders use the 28/36 rule to determine how much you can afford to borrow: Up to 28 percent of your monthly gross income can go toward your home, as long as the payments don’t exceed 36 percent of your total monthly debt payments. For example, if you had a credit card, student loan and car loan payment that together totaled $640 a month, your mortgage payment should be no more than $360 (36 percent of $1,000 in total debt payments).

“What homeowners don’t realize is this rule was invented by banks to maximize their bottom line ― not the homeowner’s financial well-being,” Weiss said. “Banks have figured out that this is the largest amount of debt one can take on with a reasonable chance of paying it back, even if that means you have to forego saving for retirement, college or short-term goals.”

4. An expensive house is worth it because of the tax write-off.

Scott Vance, owner of taxvanta.com, said a real estate agent told him when he was younger that it made sense to buy a more expensive house because he had the advantage of writing off the mortgage interest on his taxes.

But let’s stop and think about that for a moment. A deduction simply decreases your taxable income ― it’s not a dollar-for-dollar reduction of your tax bill. So committing to a larger mortgage payment to take a bigger tax deduction still means paying more in the long run. And if that high mortgage payment compromises your ability to keep up on other bills or save money, it’s definitely not worth it.

“Now, as a financial planner focusing on taxes, I see the folly in such advice,” he said, noting that he always advises his client to consider the source of advice before following it. ”Taking tax advice from a Realtor is … like taking medical procedure advice from your hairdresser.”

5. You need a six-month emergency fund.

One thing is true: You need an emergency fund. But when it comes to how much you should save in that fund, it’s different for each person. There’s no cookie-cutter answer that applies to everyone. And yet many experts claim that six months’ worth of expenses is exactly how much you should have socked away in a savings account.

“I work with a lot of Hollywood actors, and six months won’t cut it for these folks,” said Eric D. Matthews, CEO and wealth adviser at EDM Capital. “I also work with executives in the same industry where six months is overkill. You need to strike a balance for your work, industry and craft.”

If you have too little saved, a major financial blow can leave you in debt regardless. And if you set aside too much, you lose returns by leaving the money in a liquid, low-interest savings account. “The generic six months is a nice catch-all, but nowhere near the specific need of the individual’s unique situation… and aren’t we all unique?”

6. You should accept your entire student loan package.

Aside from a house, a college education is often one of the biggest purchases people make in their lifetimes. Often loans are needed to bridge the gap between college savings and that final tuition bill. But just because you’re offered a certain amount doesn’t mean you need to take it all.

“The worst financial advice I received was that I had to accept my entire student loan package and that I had no other options,” said Gina Zakaria, founder of The Frugal Convert. “It cost me a lot in student loan debt. Now I tell everyone that you never have to accept any part of a college financial package that you don’t want to accept.” There are always other options, she said.

7. Only invest in what you know.

Even the great Warren Buffett, considered by many to be the best investor of all time, gets it wrong sometimes. One of his most famous pieces of advice is to only invest in what you know, but that might not be the right guidance for the average investor.

In theory, it makes sense. After all, you don’t want to tie up your money in overly complicated investments you don’t understand. The problem is, most of us are not business experts, and it’s nearly impossible to have deep knowledge of hundreds of securities. “Diversification is key to a good portfolio, and investing in what you know leads to a very un-diversified portfolio,” said Britton Gregory, a certified financial planner and principal of Seaborn Financial. “Instead, invest in a well-diversified portfolio that includes many companies, even ones you’ve never heard of.”

That might mean enlisting the help of a professional, so make sure it’s one who has your best interests at heart.

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