Cash Back Credit Card – What’s the Catch?


Cash back credit cards are gaining in popularity lately. If you are going to open a credit card account, why not open one that will reward you. Keeping a credit card current will improve  cash discount vs surcharge your credit rating. Getting a card with a rewards program will pay you in the process. Reward programs differ greatly from one card to another. Some cards offer specific types of rewards like gas, groceries, airline tickets, etc. If you enjoy eating out, you can get a card that will reward you with restaurant gift cards. Your reward program can be customized to your preferences. But the cash back option is the preferred one.

I was in real estate for years. A lot of my spending went towards gas while riding around to different houses. There are certain gas credit cards that offer the cash back feature. These days, I’ll do anything I can to save on gas expenses.

Every time you charge a purchase on the card, you earn reward points. Usually you receive one reward point for every dollar you charge. But sometimes you only get a point for every two dollars you charge. You can cash in your points on merchandise or discounts on purchases. But if your card has a cash back option, you can bank your points and build cash rewards. Cash back rates differ greatly: from one to twenty percent -so read the fine print.

All rewards programs are not created equal. Don’t assume that every rewards program has a cash back option. Rewards can be paid out in many different ways. Some programs only offer free merchandise, discounts, or bill paying as rewards. Some companies will send you a small catalog with items on which to spend your reward points. Some allow you to spend your points on merchandise in stores, but only certain stores. It is your responsibility as a consumer to know what kind of reward system your card offers. If you can’t find it in writing, call the toll free number and speak to a customer service rep. She can explain the reward program clearly. Make sure that the rewards program fits your specific preferences.

With so many credit card companies vying for your business, don’t settle for one that has a cap on reward points. Some companies let you earn unlimited points towards merchandise and discounts rewards, but set a cap on their “cash back” points. That’s not what you want. There are many companies that offer unlimited cash back points as well as unlimited reward points. Those are the cards for you.

Keeping your account paid up will reap more benefits for you. Many times, your credit card provider will offer bonus reward points to their best customers. So if you can’t pay the account off each month, you should pay more than the minimum amount due. Doing so will not only earn you bonus reward points, but it will beef up your credit rating.

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