How well do you know your Cash Back Credit Card?
We all love our cash back rewards credit card. The mere thought of earning free money by simply using our credit cards does sound rather tempting, doesn’t it?
There are many ways in which you can use a cash back credit card to earn extra money each month. However, there are many terms and conditions that come along with these credit cards; some of which may be downright confusing.
The following tips will guide you and allow you to better understand your cash back rewards credit card:
- Introductory cash back – Many creditors lure consumers in with the excitement of 5 percent cash back. However, it is important to realize that these teaser cash back promotions apply only to very limited purchases. In other words, don’t expect this type of cash back promotion to apply to all of your credit card purchases. The categories under which you can earn additional cash back rewards will likely change throughout the year, so it is important to keep up to date on these changes so that you can best maximize your cash back rewards credit card.
- Spending caps – Many times, creditors will place caps on your rewards purchases. In other words, if your credit card company is offering a big cash back reward, expect them to place caps on the amount of cash back rewards they will offer you in any given month.
- Cash back exclusions – Many cash back creditors will only offer rewards if you shop at certain stores. In other words, their cash back rewards do not apply to every type of purchase. Pay close attention to the merchants covered under the creditor’s cash back program to determine if the credit card is right for you.
- Cash back new customer bonuses – New cardholders are often given special cash back bonuses for the first few months of owning the card. These cash back bonuses, however, are only given when you spend at least a certain amount during the first three to six months of owning the card.
- Interest rates – In short, cash back rewards are only as good as the interest rate on the card. If you pay off your card in full every month, then this may not apply to you. However, if you ever carry a balance, you need to fully understand that paying out more in finance charges each month than you earn in cash back rewards simply doesn’t make sense.
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