Cash Back Credit Cards by MyReviewsNow

Credit card companies are always trying to use incentives and reward programs in order to get current card members to purchase more frequently and for larger amounts. They also advertise these promotions in order to sign up new customers. The most popular incentive program being used by credit card issuers is cash back credit card s. For the most part, given the choice between a variety of different possible rewards, cash seems to be the thing that motivates the greatest number of people.

The “cash back” incentive program that many credit card companies operate rewards cardholders for using their credit cards by giving them points. Sometimes the ratio is 1 point for each dollar spent, but some programs have point values ranging from 0.5 to 5 points for each dollar spent. The credit card company will send the cardholder their “cash” reward once a certain monetary value is reached, or during certain times of the year.

Before signing up for any credit card because they offering an attractive cash back incentive program, a few things much be considered in order to make a confident decision.

4 Tips On Using Cash Back Credit Cards

1. Choose One That Doesn’t Have An Annual Fee

Some credit cards have an annual fee and some don’t. These fees can range anywhere between $29 and $49. With so many cash back credit cards available without an annual fee, there really isn’t a need to select a card that has one. Be sure to read the terms and conditions before you apply.

2. Tiered vs Flat Rate Points

Cash back credit cards generally offer one of two point systems. They either charge a flat fee for all transactions, or they have levels of point tiers that provide extra bonus points for more spending. For example, a tiered system would give users 0.8 points per dollar for transactions for the first $100 spent, then charge 1.5 points per dollar for spending that occurs after the $100 level. Tired systems are geared more toward people who use their credit card a lot each month. For those that don’t, the flat fee point system is the better option.

3. Reward Caps

Individuals interested in cash back credit cards should verify if and what the “cap” is on the amount of cash they can get back each month. If the credit card states that it has a cash back cap at $500, this means that the cardholder can only redeem a maximum of $500 per month. The cap amount is normally set high enough not to be an issue. However, people who use their credit cards frequently should double-check what the cap limit is when they apply for the credit card.

4. Don’t Overspend To Earn Points

Although getting cash back is fantastic, it should be done intelligently. If an individual in using his card responsibly, then the cash back will be like getting a prize for making prudent financial choices. People should never spend for the sole purpose of getting points.

A Tale Of Two Transactions:

An individual gets the phone bill for $100. He has the $100 in his checking account, but he is trying to earn points on on his cash back credit card. So he uses his card to pay the bill, and earns the 100 points. He then mails out a check to the credit card company for $100. He has earned 100 points, and because he paid the balance on the credit card right away, was not charge any interest on it.

Compare that scenario to a different one where an individual who also wants to earn 100 points for his cash back credit card. However, this person chooses to buy a couple of video games and treat himself by eating dinner at a restaurant. He spends approximately $100 on it all.

Although both people spent $100 in order to earn 100 points, the first person did it in a more financially savvy manner. He used the cash back credit card to pay for something that he already had the funds for and needed to pay anyway. The second person spent money just to get points, and although he did earn them, he purchased items he didn’t need to in order to accomplish the feat.

For further information regarding cash back credit cards, please visit MyReviewsNow Online Shopping.

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