Cash Back Card information Blog

With the holiday shopping extravaganza just around the corner it is well advised to look at your finances to properly budget for the event. You should not be dipping into your rainy-day fund for this. Holidays normally come just once every year; it’s not an emergency. Figure out what you can spend and spend less than that.

Last year more than 30 percent of consumers paid for holiday gifts with a credit card according to the National Retail Federation. For those with the discipline to control their debts, credit cards offer security, rewards and money saving. If you are a responsible credit card user, here are some available cards and advice that will keep on giving the whole year.

What’s the Deal?

On September 20, the NRF released its forecast for the upcoming  holiday season, predicting that sales will rise 4.0 percent this year to 4.5 billion.

“Retailers are in for a somewhat challenging holiday season as consumers are faced with numerous economic obstacles,” said NRF Chief Economist Rosalind Wells. “With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending.”

According to NRF’s 2007 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of 6.69 on holiday-related shopping. In addition, these shoppers will spend an additional 6.67 on special “non-gift” purchases by taking advantage of promotions and discounts to treat themselves. This brings total planned holiday-related spending to 3.36, an increase of 3.7 percent from 2006.

We all know the enthusiasm and fun or misery that comes with Black Friday shopping. Many people kick off the holiday shopping season by scooping up great deals and ringing in the discounts. Whether you will be spending exactly what BIGresearch estimates consumers will spend this year, or you plan on spending more or less-in the end, how would a rebate check for up to 5 percent sound? That check would be for more than for the survey household.

How does it work?

America witnessed the start of a revolution in the credit card industry when Discover Card was unveiled nationally during the 1986 Super Bowl. At the time, annual fees were common and cash rewards were unheard of. Discover Card set out to change that as a pioneer in offering cash rewards and no annual fee.

Today nearly every credit card issuer has a card available with a cash rebate program; some have a dozen. Cards can be as basic as 1 percent cash back on every purchase, to cards that target specific purchases made at supermarkets, drugstores, gas stations and even utilities like cell phones and cable to earn you even more cash back. A cash rebate is just what the name implies: cash back. Not miles, gift cards or buy something at discount in our special shop-actual cash back.

Get 5% cash back on your purchases! We are all only too familiar with promotional statements such as this one. And experience has taught most of us to be equally familiar with the two words that follow – ‘Conditions Apply‘!

Cash back credit cards are typically those that offer the cardholder a monetary amount as ‘cash-back’ on purchases made using the card. This amount is usually made available to the customer by crediting the amount to his card account such that the outstanding amount on the card is reduced by such amount. In some cases the amount may actually be paid to the cardholder through other forms of payments such as a cheque. So far, so good.

One should, however, keep the following in mind when opting for or evaluating a cash back credit card:

*      Interest rates on outstanding balances: Cash back credit cards usually have a higher interest rate charge on any outstanding balances on the card. If you usually carry outstanding balances on your credit cards, then you should simply go for the lowest interest rate cards rather than trying to go for a higher interest rate cash-back card. No amount of rewards or cash back will ever be able to compensate for the interest rates you pay on your outstanding balances.

*      Limitation on transaction outlets: Most cards have a limitation on their cash back offer being available only on purchases made at specific outlets or establishments. The cash back offer will be available as long as you make purchases from these listed establishments. If this list does not include places you usually frequent, the card may end up not giving you any cash back benefits.

*      Limitation of product categories: Similarly, there may be limitations on product categories on which the offer is available. For example, the card may be offering the facility of cash back only on transactions made at food outlets. Once again, if the product categories listed are not those that you spend money on frequently the card may not be the right one for you.

*      Maximum amount on cash back: All cards invariably have a limit on the cash back they would offer. ‘Get 5% cash back on your purchases’ may not necessarily mean getting 5% on all your purchases. Typically, these offers are capped at an upper limit. For example, a card may be offering 5% cash back subject to a maximum amount of Rs. 500 in month. This would mean that if you shop for Rs. 50,000 you would only get back Rs. 500 and not Rs. 2,500.

*      Compare the maximum cash back with your annual fee and other charges: Needless to say, cash back cards make most sense if they come with no joining or annual fees. In cases where they do, it would be useful to compare such fees against the maximum cash back on offer. Usage of a card with a hefty annual fees and then using the cash back to pay for the annual fees does not really make sense unless the cash back program actually provides you with a monetary benefit higher than your fees. If all you are using your cash back for is to pay for the card itself, you might as well go for a no cost – no cash back card.

*      Other terms and conditions: There may be other conditions that need to be fulfilled before you can avail the cash back offer such as a minimum spend in a month to make you eligible for a cash back; restrictions on how the cash back may actually be used i.e. there might be restrictions that only allow you to accumulate your cash back and redeem such amounts at specific outlets; specific time period during which the offer is available etc.

In the end, one must realise that the sole purpose of these offers is to make customers spend more. What is offered as cash back is typically coming out of the commissions that card issuers receive from merchants and establishments. One needs to ensure that his expenditure amount and frequency is not swayed by the sole purpose of availing the offer. Other than this, cash back cards will make sense only if you don’t usually carry an outstanding balance on your card and if the card associated fees and charges are not higher than the maximum amount you can get as cash back.

Does a cash back credit card actually pay money in the long run, or is it just another term for advanced cash?  Yes, you can actually get cash back for using a cash back credit card.  However, you need to carefully research and investigate all the cards available to ensure that you apply for only the best cash back credit cards.  In addition, in order for your cash back profits to not be eaten up by interest charges, it is wisest to pay off your balances every month to maximize the amount of cash back rather than larger amounts of cash paid out in interest charges and account fees.

How Much Cash Will You Actually Get Back?

The actual cash back is usually a percentage of your total purchases for one year or a specified time period.  Sometimes there will be an offer to double your cash back percentage over a certain time frame.  You will also find other offers for higher percentages for purchases at supermarkets, drugstores and gas stations.  The actual percentage of cash back varies from 0.5% to 6.0%, depending on the cash back credit card and their policy on percentage for the type of items purchased.

Interest Paid Versus Amount Of Cash Back

With cash back percentages ranging from 0.5% to 6% and some interest rates averaging 15.9% and up, you can quickly see how important it is that you are careful of the actual ratio of your cash back percentage and your interest rate charged.  You should also be aware of any hidden fees that will eat up your cash back profits.  Needless to say, keeping your account paid each month will also be very important in actually profiting from a cash back credit card.

Loopholes In Getting Your Cash Back
There may be loopholes in your Cash Back Credit Cards contract/rules that you need to be aware of.  Careful research prior to selecting a card will help to ensure you get the best cash back credit card available.  Also, being aware of these rules will help you from possibly losing cash back that you would have been entitled to otherwise.

Some cash back credit cards offer their higher percentage only up to a certain amount, for example, 2% cash back on the first ,000 and then switch to a lower cash back percentage of 0.5%.

Returned purchases are usually ineligible for inclusion in the calculations for your cash back bonus.

Your cash back might also be affected by poor account activity, such as overdue payments, requests for longer time for repayment, suspected fraud, or returned mail.  In these cases, the cash back credit card company may have the option of applying your cash back to any account balance in lieu of mailing you a check.

Accounts that have been closed, bankruptcy started, overdue payments, possible fraud activity may also have an impact on whether or not you get a cash back payment,

Finally, many cash back credit card companies also state in their contracts that they can change the relevant percentages, make changes in the cash back program itself, and even cancel/withdraw the cash back award from your credit card program by just giving you written notice.  It is very important that you research thoroughly and read the fine print to get the best cash back card available.

Conclusion:

Ultimately whether or not you actually receive cash back is up to you.  You are the one who needs to research and investigate which are the best cash back credit cards available.  Remember that it is not only the percentage of cash they are offering you, but the interest rate they will be charging you on loans, if their interest rates can be changed, their cash back rulesdo they have loopholes to not pay you the cash back that you thought you were earning.  Also, probably most important of all, you are the one who determines if you pay off your cash back credit card every month and avoid the high interest rates, additional late fees and penalties.  Yes, cash back for credit cards is a real option, but ultimately it is your choices and actions that will determine if it is really cash in your pocket or a credit card companys pocket.  Only you have the power to find and use correctly the best cash back credit cards for yourself.

Discover Motiva Credit Card: Pays You Back If You Pay On Time

Cash back credit cards provide fantastic opportunities for those that carry them. For every purchase a cardholder makes with one of these cards, money rebates are earned. This makes cash back cards potentially profitable for those that take the time to choose the best cash back credit cards and who use them properly. When looking for the best cash back credit cards, it is important to take several things under consideration.

One area to consider when searching for the best cash back credit cards is the percentage of rewards provided. Most cash back cards provide cardholders a cash rebate according to a percentage of the amount charged to the card. Obviously, the higher the percentage, the greater amount of money that can be earned. So, when looking for a cash back credit card, the consumer should, most obviously, opt for one with greatest rate of return.

Most cash back credit cards are partnered with certain businesses. For example, a cardholder may receive a 1% rate of return on general purchases, but a 5% rate if purchases are made at a certain gas station. Therefore, it is important for consumers to choose a cash rebate card that provides special incentives with businesses or services the consumer uses frequently. It certainly wouldn’t make much sense for a consumer to use a cash back credit card providing a special 5% rate for purchases made at a restaurant if the consumer never dines out!

The APR of the cash back credit card also needs to be taken under consideration. Many cash back credit cards tend to have a higher APR than those without special rewards programs. The consumer must be aware of the APR of the card in order to determine if the ultimate finance charges will be more or less than the rewards earned. If the finance charges will cost the consumer more than the rewards he or she will earn, then the card is not truly earning the consumer money. Those that pay their balance off in full each month obviously do not need to be concerned with the APR.

Just as the APR must be considered when looking for the best cash back credit card, it is also important to look at the annual associated with the card. A cash rebate card with an annual fee may not be worthwhile in the long run. Therefore, the cardholder needs to be sure that he or she will earn enough cash back during the year to make the annual fee worth paying for.

Not all cash back credit cards work in the same way. Some send money to the cardholder once per year. Yet others credit the account. Still other cash back credit cards place the money in interest earning accounts or in special college savings accounts. With some credit cards, the points toward cash back earnings are calculated and sent to the cardholder automatically. Still others require the cardholder to request the refund once he or she has accumulated enough points. All of these need to be taken into consideration when determining which card is best.

Some cash rebate cards have limitations to how many cash back rebates can be earned per year. For some cardholders, this is not an issue because the limit is much higher than they will ever spend. For others, this cap can be a concern. In addition, some cash back credit cards place an expiration date on how long the rebates are good. Therefore, those that think they may not cash in on their rebates on a frequent basis need to consider whether or not they will be able to use the rebates before they expire.

Cash back credit cards seem like magic to those who use them. Who would have ever thought that you could actually be paid to shop? Cash back credit card programs work that simply; a percentage of every purchase you make is set aside for you as points. When you reach enough points from your purchases, you can pull that cash out of the fund. That cash can then be applied directly to your cash back credit card balance, or you can request it in the form of a check. The best cash back credit cards will offer up to 3% cash back, but 1% or less is most common.

How it Works

It is easy to believe that cash back credit card companies have hired the wrong person to do their math. It’s anti-intuitive to think that a credit card company that lends you money will give you even more money the more you shop! In actuality, cash back credit cards benefit the credit card company as much, if not more, than the consumers who use them. The reason cash back credit cards work so well is that they build strong customer loyalty. When a customer knows that he has the potential to gain a significant amount of cash back from his purchases, he will be more inclined to use a particular credit card for all of his shopping needs. What’s more, will likely stick with the same credit card company over a long period of time so that he actually gains points. The more money you spend on your credit card over a longer period of time means the cash back credit card company will reap the benefit of your interest month after month. Thus, in reality, the cash that you receive back from your purchases may equal out to the interest that you have been paying over a given period of time.

What to Expect

The best cash back credit cards will offer you up to 3% of the total of your purchases, but most programs offer 1%. Look out! The higher percentage of return may also mean that you are receiving a higher interest rate. You may also be locked into a long-term plan with the credit card company if the benefits look too good to be true. Therefore, when you enroll in a cash back credit card program, make sure that you have taken the time to research how many dollars you have to spend in order to start receiving cash back.

Where to Find a Cash Back Card

Nearly every credit card company will offer some sort of cash back option. If you are with a credit card company now and are not sure whether they offer a cash back credit card, simply ask! There may be incentives that you are not even aware of.

Cash back credit cards help to relieve some of the guilt suffered by shoppers. When you know that a percentage of every dollar you spend could be returned to you, you may actually even feel motivated to shop more. Cash back credit card companies benefit from knowing that shoppers do feel guilty about making large purchases. But, if shoppers know that they could be rewarded for the large purchase (even if the reward is only a few dollars), they can rest easy. Again, the best cash back credit cards will offer about 3%, but may come with heavy restrictions. Take the time to do ample research into what cash back credit card programs are currently available to you.

What is the best cash back credit card around? Before I get into it, let me briefly explain how does cash back credit card work. Different credit card company does it differently but the basic principal is the same. Every time you make a purchase with the credit card, your cash back or rewards account goes up in value. When you reach a certain amount, you can cash out your cash back. Some companies will issue you a check, while others will directly credit your account balance.

Simply, you can say it is an easy way to make money by spending money buying stuff. Cash back credit cards pay you a percentage rebate on the money you spend on the card. Some cards offer high cash back percentages on certain purchases and you can optimize your cash back by using several cards

Many cash back credit cards offer up to 5% cash back on purchases at gas stations, drug stores, supermarkets, while 1% on all others. Then there are credit cards with cash back offers give 5% rebates on expenditures for auto repair, apparel, home improvement stores, etc.

As you know  5% cash back is the same as 5% discount on your purchases. So if you use a cash back credit card for most of your purchases, you can save quite a substantial amount of money over a year.

But then of course there are “rules” which you have to abide. Basically don’t overspend and pay off your card in full every month. Because cash back cards often have higher interest rates. Carrying a balance on any rewards credit card can easily wipe out any rebates that you might earn.

So, what is the best cash back credit card? According to many who are familiar with cash back credit cards, they all say the same few factors. For instance, how much you charge in a year, what categories you charge in, when do you charge, your lifestyle, what are the fees and APRs and others.

Your cash back reward will be redundant if the card’s interest rate is way too high.  When choosing the best cash back credit card, always compare not only the cash back percentage but the interest rate as well.

There are credit cards which offer additional rewards or discounts for shopping with their preferred merchants. Then naturally, you would do more shopping at those particular merchants.

Some credit cards have a limit to the amount you can earn and it will be best to choose the one that has the highest limit. Then there are some cases, which you don’t get to earn the full cash back on your charges until after a certain amount of expenditures. The rewards on your cash back credit card may also expire after a certain number of months, or if you don’t use your card for a period of time. The way your earnings are redeemed also varies from card to card.

The best advice on selecting the best back cash credit card is to read the fine print in detail, such as the terms and conditions of the agreement.

Spending is a part of our daily lives. In a world filled with consumerism, spending is the act of submission by giving up your hard earned cash for an item you believe has the same value as the currency given. While there are others who opt to use cash, there are some who use credit cards in purchasing items. There are many reasons why people use credit cards. There are some who use it for travel points and points received from spending while there are some who use it for the cash back received from usage. Responsible spending and cash savings can be achieved by finding the best cash back credit card for you.

While others know how to spend wisely, there are some who are still struggling with spending responsibly. Some people believe that having a credit card will ultimately leave you in debt, this holds true if you are one of those people who cannot control themselves from spending. But paying in cash ultimately does not give you rewards. There are more rewards received when you discover the best cash back credit card that can give you valuable returns for every usage.

Knowing how to spend and what to spend on is ideally the first step to using your card well. One should not keep on charging their purchases. You might be surprised to find that your card bill has erupted to an amount way over your limit. Using your card is all about moderation; do not keep on charging unless you know you have money in the bank to cover for your expenditures. The second step in spending responsibly is by getting the highest returns by using the right cash back card.

Another trick to keep in mind is by paying your card bill on time and in the full amount. Interest rates these days are high and you should never allow yourself to pay for late payment interest rates that are a complete waste of hard-earned cash. Remember to always pay in full and on time.

The benefit of using a cash rebate card is saving by getting money back from your purchases. However, you should pay your card bill in full and on time each month to be able to receive the perks. If not, the money you saved from your purchases will just cover the interest you have incurred from your late payments.

Saving well can be done easily as long as you know how to spend wisely. Major savings can be incurred by using the best cash back credit card that offers rebate deals that are up to 5%. It is important that you know how to spend wisely to enjoy the perks of having a credit card.

Related Cash Back Card Articles

California Documentary Transfer Tax Calculator