Cash back credit card has many features .Hearing the name itself many people find this type of credit card attractive. This article provides you with valuable information in relation to the following:
- What is the principle behind cash back credit card?
- What are the major features of cash back credit cards?
- What are the pros and cons of cash back credit cards?
Cash back credit cards sound pretty attractive to almost all credit card users. After all, what credit card customer doesn’t like the idea of getting money back from their credit card company? Before you rush out to get a cash back card, though, you will want to step back and consider all the features, disadvantages, and advantages of these types of credit cards. It is only by doing so that you will know whether these cards are right for you.
How Cash Back Credit Cards Work
Cash back credit cards look and work just like any other credit card. They allow you to shop at stores, over the telephone, and in person. They allow you to charge purchases from participating merchants and they charge you interest for any balance not paid off at the end of the month. However, credit cards offer cash back or money back perks to encourage customers. Credit card companies and other institutions realize that these cards attract customers because customers love cash prizes and rewards.
There are basically two types of credit cards with cash back advantages: credit system cards and cards that offer cash back coupons in the mail. The first type of card adds credit or points to your card each time you make a purchase with your card. When you have enough credits or points, you can apply for cash rewards or for other bonus rewards. The second type of card regularly sends card users coupons or gift certificates that can be used as cash at specific retailers. This type of card is especially popular with large stores. Many store credit cards offer a cash-back feature that is only valid in-store, which encourages shoppers to make more purchases in the store.
Some Cash Back Credit Card Features To Look For
If you decide that credit cards with cash back advantages are for you, do consider the features you will want to look for in your card:
- Credit limit
Many stores and companies will encourage you to get the largest spending limit possible, arguing that the more money you spend, the more rewards you will enjoy. While it is true that you will get more rewards with more spending, you should never get a card limit that you cannot repay comfortably each month. There is no point in going into debt just for the promise of a few dollars.
- Flexible rewards system
Look for cards that give you some flexibility when it is time to redeem your rewards. If you can choose from a range of products or can choose cash, you will have a more rewarding system than one that only sends you coupons.
- Interest rates
As with all cards, cash back reward credit cards allow you to carry a balance and charge you interest on your balance. Choose a card with the lowest rate possible, so that you will not end up paying too much if you do have to carry a balance.
- Type of rewards system
Read the fine print of any credit card offer and try to determine exactly how the reward system works. Will you get coupons, credit on your credit card bills, or actual checks? Make sure that the rewards system being offered meets your expectations, or you will end up disappointed.
- Credit amount
If you decide to try a card that credits you for every purchase made, determine how much credit you need to gather before you get your reward. If you need many points and you only use your credit card occasionally, you may never get to enjoy any rewards.
- Expiry dates
Some credit cards offer you only a limited time to redeem your rewards or points. If you spend little via credit cards, these types of cards may not give you time to get your cash rewards.
- Special card features
There are cash back business credit cards and student cards with cash rewards. If you qualify for a specific type of credit card, chances are good that you can get that card with cash back reward options
To pay for the rewards, some cards charge hefty annual fees or fees when you try to redeem your rewards. Always try to find no-fee cards or cards with very low fees.
- Limited time offers
Some cards make it easy to rack points up – for a limited time. After that, getting credit or rewards may be a very slow process indeed. Always read the fine print to find out what sort of credit system the card uses after the introductory offer is over.