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Cash Back

    Cash back credit cards are a wonderful way to save some serious cash. Typically a cash back credit card will give a percentage back for each purchase. However, a flat rate on every purchase is rarely the only aspect of the credit card. The rebate rate is most often based on the type of purchase, purchases made so far during the year, and whether or not there is a monthly balance.

    If the cash back credit card is based on the type of purchase the cardholder will most likely get an additional rebate for using their card at certain types of businesses. For example, a card may offer 1% cash back on all purchases and 3 % at gas stations and grocery stores. If the card is based on the amount spent during the year, holders may get a lower amount of cash back at the beginning of the year and a higher amount later. For example the holder might get only .05 % back for their first $1000 spent during the year, 2% for the amounts between $1000 and $5000, and 4% for anything over $5000. Then at the beginning of the next year the process starts all over again. Cash back credit cards that are based on monthly balances will often give a larger rebate if the cardholder is maintaining a monthly balance. For example, a card may offer 1% cash back on all purchases and 2% cash back if the holder maintained more than $100 in debt on the card the previous month.

    One important thing to look for with cash back credit cards is how the credit card company repays the cash rebates. Probably the best way to get paid back is when the cash rebates are added to the account at the end of each month. However this is not always the case. Very often cash back credit cards will pay the cash rebates in the form of gift cards, or check that has to be requested by phone. Cash rebates may also be limited. For example, a company may advertise a generous 3% cash rebate, but limit rebates to $500 per year.

    Although there are many different cash back credit cards out there the average consumer can find one that is good for them by carefully reading the terms. Legally credit card companies must disclose all credit card terms and cannot be deceptive in doing so. Therefore a little bit of reading will usually provide all of the important clauses.

    The advantages of cash back credit cards are huge. For the average person, cards that give cash back for groceries, pharmacies and gas can save around 3% on these daily costs. Businesses may be interested in using cash back credit cards on all of their expenses and purchases to increase their profit margins. Frequent shoppers can find cards that give cash back for their favorite stores to help save a buck or two on their favorite items.

    Overall cash back credit cards are a good bet. They provide a discount on top of any sales or coupons and are usually very easy to use. As with most credit cards customers should be wary of high interest rates and annual fees. Making sure there is no annual fee and paying card balances promptly every month can avoid costly charges. With a little bit of research cash back credit cards can save a lot of money and be very useful.

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