How to Make the Most Out of Your Cash-Back Card?
Some extra cash in your wallet sounds nice, doesn’t it? Perhaps, you would use it for a lovely dinner on your anniversary, a vacation with your family, college savings, a just-once shopping spree, or pay a portion of your debts. For all those reasons, and the millions of others you can think of, a cash-back card could match perfectly with your needs.
Most cash-back cards are reasonably straightforward, and, in fact they’re the most obvious type of reward card. Consumers usually get a credit to their accounts, ranging from one percent to five percents of their spending. Some other cash-back cards offer automatic credits regularly, while others mail you the actual check. People love simplicity, so as you could have expected, consumers tend to prefer cash-back cards.
Those cards are great for those who don’t carry a monthly balance. Obviously credit cards that provide cash rebates often have a more expensive interest rate, which frequently wipes out any rewards you might get if you carry a month-to-month balance. If you can’t pay off bill each month, use a card with the least expensive interest rate.
As a whole, cashback can work as one of the best credit card deals if you can properly handle your cards so you're actually earning the cash, and not using it in any other forms. Always use your rebate card smartly and try to pay off the balance each month. If you can do this, then the cash you get is a pure reward, for all the effort you’ve taken in managing your card wisely.
You may be allowed to not carry a month-to-month balance, but unfortunately cards are not created identically. As with any other products, you unquestionably need to shop around. Ideally, you should pull out a calculator to find the most beneficial reward card, given your lifestyle and spending habits. Consider it as a sensible investment with some extra cash as rewards. You can also get some peace of mind from learning that you’ve done a profitable decision. These are a few things to remember when reviewing card offers:
This should be easy to spot, because only very few cards out of thousands that are available - charge annual fees. But if a card that has annual fee appears too good to resist, it is time to compare the benefits and crunch the numbers, then compare it with those without annual fees. When comparing for benefits, be completely realistic about which ones you will actually use. If a credit card with only $10 annual fee has a generous perk, like a 25,000 free international miles every year, but if you never even venture beyond your city limit, then it isn’t worth a dime!
Does It Require Cardholders to Carry a Balance?
Some cards offer you a bigger rebate percentage or a few freebies if you carry a balance. For example, a card may offers one percent rebate on all transactions but increases it to three percents if you carry a balance. This proposition should raise a huge red flag. Any credit interests are usually higher than the amount of cash-back rewards. Paying 14% in interest on your monthly balance for the privilege of a measly 3% rebate is ludicrous. If you’re contemplating such an offer, you should start with a good annual spending level. Figure out how much you will pay in fees and interest, and note the amount of cash you can get back. You should be shocked if you actually end up receiving more cash-back than the fees and interest.
These are five tips to get the best cash back credit cards:
1. Carefully evaluate reward program rules.
2. Don't carry a balance.
3. Charge everything, but you shouldn't blow your budget.
4. Keep up with your rebates on regular basis.
5. Maximize your rebates based on your spending habits.