Cash Back Credit Cards 101: Which is the Right one For You?
There are several types of credit cards - each type boasting of functionalities and attributes meant to complement a user’s spending habits. Cash back credit cards are a popular choice among card holders these days.
What are Cash Back Credit Cards?
Merchants normally pay a portion of a transaction paid through a credit card as a commission to the bank. Credit card issuers then share this commission with the credit card holder (i.e. you) by providing you air-miles or a monetary amount, more commonly known as cash back.
As a yearly rebate, cash back credit cards allow holders to receive at least 0.5% up to 2% of their expenditure which is essentially their purchases minus refunds. Rebates are paid to the holder by check, or may be credit to his or her account.
How Do I Know Which among Several Cash Back Credit Cards is Right for me?
Cash back credit cards are popular among card holders because from daily expenses like fuel, groceries, and restaurant meals, they can get up to 5% rebates. Looking at the big picture, it really could save one a handsome sum of money. Many cash back cards are offered nowadays, but only a few have proven to be reputable.
The first factor to choosing a good cash back card is determining your lifestyle and normal spending habits. This is because you will want to get a card which has perks that suit your lifestyle. Are you into fashion and shopping? Do you travel frequently? Do you regularly buy from a particular drugstore? How often do you do your groceries? How often to you gas up?
If you like to travel, your card should offer travel bonuses and frequent flyer miles. If you like to shop, then a cash back credit card can be your best friend.
Cash back credit cards can offer rewards as low as 1%, and as high as 20%. However, some of them only let you earn rewards when you shop with certain merchants they have tie-ups with.
Cash Back Credit Cards and Annual Fees
Yes, a cash back credit card still has an annual fee to charge per year. The great thing about cash back credit cards, however, is that their rewards can outweigh their annual fees by a hundred percent, especially if you are a frequent shopper.
A Review of Two Great Cash Back Credit Cards in the Market Today
Here are two recommendations for cash back credit cards, if you still do not have a clue what to apply for.
The Costco – American ExpressTrue Earnings Card
This card, which automatically doubles as your Costo membership card, is the very definition of value for your money. It offers 3% on both fuel and 2% for travel.
Membership fee for Costco is $50 a year, and you no longer have to pay an annual fee for you card. This concept makes True Earnings really unique from other cash back credit cards in the market today.
Discover More Card
Many have named this the best among all the other cash back credit cards out there. True to its name, The Discover More card offers up to 5% rebates on your everyday expenses from restaurants, grocery stores and department stores. It’s a good-deal lifestyle credit card.
The card has no annual fee, and 0% intro APR for six months. If you like shopping online, you can do so through ShopDiscover, where you can earn up to 20% cash back.