Pennywise
Cash Back Credit Cards
by: Sahil | last updated: November 10, 2009
Category: Standard Credit Cards | Tags: Cash back credit cards, cashback credit cards, credit cards
Category: Standard Credit Cards | Tags: Cash back credit cards, cashback credit cards, credit cards
Cash back credit cards are those that provide a percentage of the amount spent back to the consumer. Usually this percentage may vary from 2% to 5% depending on the credit card issuer. The cash back amount can be either credited to the card or can be offered as a check payment. The percentage of cash back may vary internally as well and may be different for grocery purchases compared to other purchases. Cash back credit cards are good for those people who spend a substantial amount on shopping and regularly use the card for gasoline or grocery purchases.
Some premium credit cards offer as much as 20% cash back if you make purchases online using their website. A point to be considered here is that cash back credit cards are good for only those people who not only make big purchases but pay off the card in a timely manner. If you are paying interest, it means that any cash back that is earned is being negated by it. Therefore its advisable to ponder over the decision before choosing a cash back credit card.
In the recent past, gas rebate credit cards have become popular in the United States due to increasing crude oil prices. These cards provide cash back on gasoline purchases making them an instrument for reducing the expenditure towards fuel. However not all gas stations accept all the credit cards and there may be only specific merchants or companies that accept it. Ensure that you know which companies do accept it or if the card is accepted anywhere.
If you have decided to go for a cash back credit card then its best to choose a card that suits your habits and lifestyle. For example some cash back credit cards give you a flat amount regardless of how much you spend while others give it as a percentage of your spending. The others have levels with different stages of rewards depending on how much you use the card and where you spend it. Amex Blue Cash gives 1 to 5 percent cash back for purchases at supermarkets, gas stations, and drugstores, and 0.5 to 1.5 percent cash back for purchases everywhere else. However the 5 percent compensation and the 1.5 percent reward start only for latest purchases made after youve used up $6,500 in a year.
If you dont usually splurge that much, its better to use a card like Capital One No Hassle Cash Rewards, which offers 2 percent cash back on gas and groceries and 1 percent for further purchases, not considering of how much you pay out. Also look for a card that doesnt set a maximum value for the amount of rewards you can receive in a year (Capital One No Hassle and Amex Blue, for instance, have no restrictions).
Using your cash back card frequently instead of using cash will also augment the amount that you earn as cash back. Usually supermarket and drugstore purchases usually give higher cash back compared to other ordinary purchases. However it is also important to ensure that you do not end up spending too much enticed by the cash back. This may affect your credit score in a negative manner and nullify the advantage of cash backs.
Small business credit cards pay better rewards compared to personal ones and you do not have to be a full time merchant or own a business in order to acquire a small business credit card. If you are a freelancer or sell items on eBay frequently then you may be qualified for these cards.
Some of the top credit card companies that offer cash back cards are Capital One cash back card, chase freedom card, True Earnings card from Costco and American Express, and Discover Biodegradable More. All these are premium credit cards that require an excellent credit rating; however cash back cards are offered by almost all the major credit card companies for people with average or good credit. The most common credit cards are Visa, American Express, and MasterCard.
It is advisable to weigh the odds before choosing a cash back credit card since the cash back amount is not very large. Even a single missed payment or partial payment can make the cash back card redundant. Anyone who wants enjoy the benefits of a cash back card should be very punctual and honest in his credit related transactions.
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