Cash Back Credit Cards: Get Paid to Shop
Cash back credit cards operate as their name implies; you
receive cash from the credit card company based on the
amount you spend. That's right - you earn money just for
swiping the card! But before you apply, there are some
factors you should know about cash back credit cards. Read
on to learn how cash back credit cards work and find one
that best fits your lifestyle. How Cash Back Credit Cards
Work
While the concept is the same in all cash back credit
cards, the method for calculating your reward varies
greatly. Some companies offer up to 5% cash back on
frequently purchased items, such as gas or groceries. So if
you spend $1,000 at the grocery store each month, you can
expect a return of $50. Other offers calculate a straight
percentage of cash back on all purchases. Still others
include a point system. You might earn one point for each
dollar you spend. The points can then be redeemed for cash.
Another way that cash back credit cards differ from one
another is in the rebate system. Many companies will send
you a rebate check at a certain time or year or when you
earn a certain amount of money, such as $25. Some credit
the money to your account. Others require you to request
the reward money.
Why the Fine Print is Important
With some cash back credit cards, you must spend a certain
amount before you receive a higher percentage of cash back.
This tiered option is usually spelled out in the fine
print. So if you see the wording "up to 1%" on the
application, check the fine print. This could mean that the
first $1,500 you spent will only earn 0.25%. The next
$1,500 will earn 0.50% cash back. Once you spend $3,000,
you will earn 1% cash back. This method varies from card to
card, so be sure to read the details.
Select the Best Option
Keep in mind that some cash back credit cards are only
available to those who have good to excellent credit. Also,
many times these cards come with higher interest rates. If
you carry a balance from month to month, you may end up
spending more on interest payments than you earn through
the cash back system.
Another factor to consider is the way to earn the most for
your spending. If you spend a lot of time on the road every
week, a card with cash back on gas may be a good option. If
you have high grocery bills, look into a card that offers a
good return at supermarkets. If you do not want to be
limited to where you can earn money, check out a company
that offers a set percentage return on all purchases. By
looking through your options, you can find what works best
for you.
Cash back credit cards offer great incentives to the
consumer. If you use your card regularly and pay off the
balance each month, the cash back credit card may be
perfect for you. And its rewards add up fast. Enjoy the
ease of swiping your card; then use the extra dollars you
earn for a plane ticket, a fancy dinner, or a vacation
splurge.
