Cash Back

Cash back credit cards allow you the opportunity to earn cash back in the form of rebates on certain items you purchase with your credit card. Some cash back credit cards provide you with up to 5% cash back on purchases made at various gas stations, grocery stores and drug stores with up to 1% cash back on all other expenditures. Typically cash back credit card issuers aim to provide cash back rebates on items of necessity. That is why the most lucrative rebates generally come from food, drug, gas and convenience stores.

General Terms and Conditions for Cash Back Credit Cards:

• In some cases, you may not earn the complete amount of “cash back” until a certain amount of expenditures are made.
• Some cards may put a limit on the maximum amount of “cash back” earnings in which you receive in a given year. (This may apply to those with high monthly expenses hoping for optimal savings.)
• Cash back credit card issuers may also impose cash back restrictions if your card remains idle for a certain period of time.
• Cash back earnings from your credit card can be redeemed in several different ways and it varies from card to card, so always read the fine print before opening.

Keep in mind, a 5% rebate on credit card expenditures is the same as receiving a 5% discount on purchases made with that credit card. Needless to say, if you use a cash back credit card for the majority of your expenditures throughout the year you can earn a substantial amount of money in the form of rebates.

To fully capitalize on the benefits of cash back credit cards you should be able to pay your balance in full each month. If you generally carry month-to-month balances on your credit card you may opt for a low interest credit card as this will reduce your APR charges.

If you frequently travel throughout the month you may earn a higher “cash back” return with a frequent flyer credit card or a business credit card depending on your situation.