Advantages of Cash Back Credit Cards

June 28, 2012 by  Filed under: Credit 

A hot trend in the credit card industry meant to entice new customers to use their credit card over the competition, is offering cash back on purchases. Cash back credit cards give the account holder a percentage of their spending back. The actual “cash” may vary and be awarded in gift cards, credit toward other purchases, money transferred to a bank account, or actual checks. The popularity of these cards is growing as smart consumers want to get something extra for their purchases.

Drawbacks

Credit cards offering rewards programs occasionally come with extra requirements in order to earn, use or retain the points you earn. Some cards come with an annual fee as the requirement for the cash back bonuses, and some have minimum spending limits. Cash back cards can, at times, also have higher interest rates than their non-rewards card counterparts. Some of these cards carry an interest rate of up to 21%. Some cards have a fee to redeem your reward points or to get your checks.

Various Cards and Perks

Some programs specialize in certain items; and many have incentives during different quarters. This system, often called rotating rewards, is very common among the card companies offering cash back rewards. These bonus rewards tend to focus on the types of purchases made most often like department stores, grocery stores, gasoline, or travel.

  • Cards like the Citi Forward Card offer great cash bonuses for college students or teens. On all purchases get you one point for each dollar towards your cash rewards. In addition to that, you get 5 points for each dollar spent on books, movies and music.
  • For families a great choice is a card like the Blue Cash Everyday from American Express. This card offers the standard rewards earning of 1% on all purchases and gives 2% back on gasoline and department stores and even 3% back at supermarkets. On top of these rewards program offers, the Blue Cash Everyday card offers interest free purchases for the first twelve months.
  • Some rewards programs, such as the rewards offered through the Discover Motiva Card, offer extra cash bonuses for managing your credit well. By just paying your bills on time, not going over your spending limit, and keeping your balance on the card relatively low you get more rewards.

Cash back cards give an amazingly high number of options suitable for every type of person. There are cards to benefit those trying to build credit and for those who want to reinforce their good credit. For people who tend to purchase with cash, these cards offer the bonus of the cash back programs while allowing you to pay off your balance each month, keeping that “cash” lifestyle. The perks are definitely worth taking a look at when you are choosing a new credit card.

Debra Lee Dragon is a freelance writer providing content for CardGuys.com- a site that helps consumers find the best cash back credit cards and balance transfer offers. Find and apply for a credit card that best meets your needs, today!

Article Source:
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