I don’t really think anybody wouldn’t have heard of cash back credit cards. But for those who haven’t, these are promotional credit cards introduced by many banks and financial institutions. These cards offer 3%-5% cash back on purchases you make using these cards. Some cards, instead of giving back spot cash, help you earn points. When these points reach a certain level, you avail either cash or some prize.
For an avid credit card user (which most of us are), it can be a great source to save some amount every month. So, the better the deal, the more you save. Hence, the most important part of the process is research. You can start with searching current offers online and list down the names of companies offering this service. Determine which card would suit your needs and apply for it before the offer expires.
As a consumer, you must know all the pros and cons of using cash back credit cards. Most of these cards offer spot rebates. This, indirectly, means discounts on your purchases. If, for instance, you buy a toy worth $100, and if the card offers 3% cash-back, you will be charged just $97.
Many cards offer spot cash back. Instead of giving a discount, in the above example, the retailer would deposit $3 directly in your bank account. Over time, you save a considerable amount, if most of your purchases are made through this card.
Although you don’t save money in the points system, you receive useful assets like mobile phone, laptops, or other items on reaching a certain level. Every time you swipe your card, the points in your card increase. When it reaches the predetermined level, you can get it exchanged for a laptop, or mobile phone, or any other thing the provider offers.
You would, however, receive these benefits only if are a good card holder, i.e. if you make payments on time. To take advantage of the benefits of cash back credit cards, you must have a good payment history. If you use it wisely, these cards are great sources to save money every month.
READ ALSO: How to Get Best Credit Card Offers?