How to Get That Cash Out of Cash Back Credit Cards?
They look attractive from a distance but hard to get when you run after them. Credit cards with cash back rewards offer hard cash as a reward for your spending. But if you don’t realize their inside secrets, you may be paying out extra cash for your spending!
There are plenty of credit card offers in the market offering cash back rewards. Almost all major credit card companies frequently come out with such cards. If you are a disciplined spender, you can make most out of them otherwise it will be only end up in a dream. Remember the following tips while going for such cards –
1. Deceptive fees and higher interest – Such cards do offer cash back rewards but many of them charge annual fee. If you are just a normal spender, this fee will negate all your cash rewards. Most of them come with a very heavy rate of interest. So if you do not pay your balance in full at the end of every month, you will be paying out big money by way of interest.
Make your research on all these cards and find out which ones do not charge annual fee. You should also make a comparison of the rates of interest charged. Take the best.
Also, remember to pay for all your spending at the end of each month. Do not spend excessively to reach higher levels. You may not be able to pay back all the dues in time.
2. Restrictions on rewards – Keep a close look on their rewards program. Sometimes you may go on collecting points in anticipation of rewards but when you go for redemption, you may find that half of the points have already expired and due to limitation of time. Some cards require you to spend over a particular amount in order to qualify fully.
You should be smart to keep track of such restrictions.
3. Incentives for higher spending – Most of the credit cards offer you a high percentage of cash back reward if you spend in a particular category of expenditure. For example, if you spend on gas, it may give you higher cash back. If you shop on-line on some specific sites, you may get some extra bonuses. There are some promotions for your first purchase with the card. So if you start spending on your new card, you may get this special bonus.
Think about your spending pattern before applying for these cards. If your spending habits are not matching with the reward conditions, you may not be able to get much out of such cards.
4. Redemption requirements – Some cards will send you gift checks automatically on reaching a particular level of spending. But some cards will require you to specifically request for a reward.
You should tone up your spending pattern to match such reward conditions so you get timely rewards.
Cash rewards are always attractive but you should never overspend to reach for a particular reward. You may end up with huge balances and unreasonable interest may follow which will nullify all the benefits.