In the past few years, cash back credit cards have become very popular because customers can get a percentage of each purchase back in the form of a cash rebate or incentive. Cardholders can get cash back on everything they buy, from groceries to monthly bills like cell phone bills. If you're thinking about getting a credit card with cash back rewards, here are a few things to think about before you apply. If you know what to look for and what kinds of offers are out there, you will be more likely to get the credit card that is best for you.
The first thing to think about is where you make most of your charges or a big chunk of them. Does that store or vendor only accept Visa and MasterCard credit cards, or do they also take cards from American Express and Discover? Most grocery stores and gas stations accept all or most credit card issuers. However, if you do a lot of shopping at Costco, Sam's Club, or BJ's, you should look into which credit card issuers they don't accept. Our local Costco is where we do most of our wholesale club shopping, so we chose an American Express credit card. Finding out which stores or vendors you charge at most often can help you get the most cash back on the things you buy.
The amount of cash back you can get on purchases with many cash-back credit cards is limited or capped. When you use a credit card with a rebate of 3% or more, you usually can't earn more than a certain amount. This may be the best way to get the most out of your rewards if you don't use your credit card very often. If you're like me and put as much as you can on your credit card every month (don't worry, we pay it off), you should get a card with no limit on how much cash back you can get. Find out if the amount of cash back you can get from an offer is set at different levels. Some credit cards require that you charge at least a certain amount each year in order to get a cash rebate of 1 percent or more. Check the terms and conditions of each credit card when comparing offers to see if your card has a limit or cap and a tiered cash back programme.
The last thing we'll look at is how each credit card works. By details, I mean the interest rate during the introductory period, the normal interest rate (APR), and the annual fee. If you plan to move a balance to your new card, the introductory rate and how long it will last are the most important things to think about. Most issuers will let you transfer a balance at 0% interest for three to twelve months, but that balance won't count toward your cash rebate or incentive. Also, if you make purchases after transferring a balance, your monthly payments will go toward the balance you transferred, not the purchases you made. Interest will be added to these new charges until the transferred balance is paid off. The interest rate on our American Express credit card is almost 20%, but since we pay it off every month, we wouldn't care if it was 30%! If you do carry a balance from month to month, look for a credit card offer with the lowest possible interest rate for your credit score. Credit card companies get paid every time you use your card, so why should they charge you a fee every year? Most cash-back credit card companies don't charge annual fees, but if you find one that does, you should look for a different card.
