The payback you get from your credit card can be very rewarding. Many people sign up for credit cards for the cashback. This can be a positive or negative thing depending on your purchases and the rates. Here is what you should look at before signing up for a cashback.
Cashback services give you a percentage of what you spend
Basically, credit cards with cashback services pay you back a percentage of what you spend. Every time you make a purchase using the credit cards, you get a reward, given t you as a cashback. Different creditors will give you a different cashback rate depending on the type of cashback. When you sign up for a cashback with 1.5% rate, you get that percentage of every purchase you pay with that credit card. This can be very rewarding. Credit card owners use this as a way to get more people to buy their credit cards. Essentially, they are giving away a percentage they earn from the interest rates.
Some cashback reward programmes consist of a rotating cashback
There are three basic categories when it comes to cashback credit cards. Some creditors will give you a flat rate reward, while others offer you a tiered rate and a bonus category. With the flat rate you get a similar reward for all the purchases you make. If the rate is 1% you will get just that on all your purchases. The bonus and tiered offer multiple rates which mean you have to spend the cards on different categories for different earnings. You will have to spend the money o a category with a higher rate if you want to maximise the cashback.
There are different options for redeeming your cashback
Redeeming your cashback is no hustle. For one, you have access to your account to know the amount of cashback your card holds. You have the capability of redeeming all the cashback at one go depending on the rules set by the creditor. There are more ways than one of redeeming. You can ask the creditors to deposit the money directly into your account, they can write you a check on the rewards, you can use it to pay your credit balance, and lastly you can chose to donate the cashback to a charity.
You must have a high APR
Cash back credit may sound very enticing but it is not for everybody. Some cashback credit s has limits on how much you can spend annually in order to get the rewards. These credit cards are good if you are able to pay off the monthly credit balance and have a high purchase annually. You want to ensure you can get the rewards without having to spend more money than you can actually afford. If you can’t afford a credit card then don’t enrol just because you want some cashback services.
Most cashback credit cards have an annual fee
Cashback offers a tempting service of getting some of your money back with every purchase you make. The issue comes in with the annual fee; you may end up making an amount that is less than the annual fee meaning you will incur a loss. Ensure you calculate your basic annual expenditure and the cashback and compare that to the annual fee before signing up for a card.
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