Cashback credit cards
spending and earning the same time?
The concept of credit cards is an ingenious one. It has a lot of financial benefits for the company offering the card, and some for the people using them as well; if you consider paying interest on your purchases & being lured in to spending more & more as one. Actually, if one were to be honest, credit cards do have benefits for the customers, or they would not be so popular. One thing no one can deny is that it’s easy with these cards to get in to trouble unless you are careful, then again, it’s true for almost every thing in life. There are people, who are financially so organized and frugal in the monetary matters, which they normally pay their dues on time and thus don’t get charged any interest. At times, they start losing interest in having so many cards in their pockets. What do the credit card companies do then? Well, they come up with brilliant ideas like rewards & cash back on credit cards…. Got your attention now?
Understanding the Idea
When you look at most credit card offers, what they generally offer is a low interest rate but if some one does not need the credit card to get a line of credit, offers like cash back on your spending can be attractive for the customers . The idea is that you are spending the money so why not spend it through a cash back credit card and get a few dollars back into your pocket. How much money? That depends on the offer. Some cards offer up to 5% cash back. It might not seem a lot when looked as 5 dollars on every 100 dollars spent, but at the end of the year it becomes quiet a good amount that comes back to your pocket. Some cards do have a yearly limit on the cash rebate you can get, while others have none. When you start looking for a credit card that offers you cash rebate, you will require a fair bit of patience. You will find a lot of percentages and diffract categories of purchases mentioned in the card details. Soldier on… and you will get your time’s worth.
Making Hay
If you want to reap the rewards of a credit card offering cash back, you will have to be very particular about your payments. Cash back Credit cards or any other card that offers reward points; tend to have rather high interest rate. If, for some reason, you fail to make a timely payment, the interest rate is going to ruin all your rewards or cash back. Another important thing to keep in mind is that you will not be offered any cash back on your balance transfers or cash withdrawals on most cards. Some cards do offer rebate on withdrawal, subject to some conditions.
Words of wisdom
- Making sure that you pay your card off in full every month, can become easier if you use the direct debt option for payments. Some providers don’t offer the DD option, so you might have to look for something similar like ‘pay amount in full’.
- Choose your cash back credit card wisely. There are quiet a few reward based or cash back credit cards in the market. Reward points can come in handy as well, but normally they have some limitations regarding redeeming the points. Also, what can be better than cash that you can spend on any thing; it can go towards a golf club or a great pair of shoes.
A few don’ts
These credit cards are designed in a way that the only thing they are normally good at is making purchases, paying it off timely & getting some cash back for you efforts. Apart from that its use is very limited and can cost you dearly.
- Don’t ever use the cash back credit cards for withdrawing cash, you don’t get any cash back for that, but at times get charged hefty interest even of you pay it off in full. Withdrawing cash on such cards is a definite no-no.
- So too is balance transfer. Even though most cash back card balance transfer sound inviting, don’t step in to that trap. Why? You are not getting anything for doing it and it will be at a comparatively much higher interest rate than a normal card, and will only make life hard.
The bottom line with these cards is; use them for the purpose you chose them and get a separate card for your balance transfers or cash advances, chances are you will be a happy customer.
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