Credit cards are pretty much common and even students nowadays have been pondering over the credit cards since these are pretty much useful and easily accessible. The more comfortable you get with your purchase and payments the more would be things peaceful for you and credit cards do give this level of peace. However, when we talk about credit cards there is not one single type of it present in fact many people also get their hands on a variety of different credit cards and among them the most popular kind is the cash back credit card.
Mechanism of Cash Back Credit Card[i]
These days a number of people have been looking forward to having their hands on the cash back credit card due to the benefits it provides for and the way it makes things easier for people. When we talk about cash back credit cards, it simply means that you will get a discount over every purchase of yours provided that you use that particular credit card, in simpler words. The mechanism of the cash back credit card works in a way that the banks gives you back either 1 percent, 2 percent or a maximum of 5 percent of the cash of the amount you pay on your purchase and this amount is being transmitted back to your own account.
How Is Cash Back Redeemed?[ii]
Now, when you are busy spending on your shopping with your cash back credit card, the amount of cash back tends to get accumulated in your account which you have to redeem later on. There are three best ways in which you may easily get your hands on the redemption of your cash back.
• Off Setting Your Statement
Well, when we use a credit card we definitely get our hands on a bill to be paid by the end of each month for the expenses we have made throughout the month. When you have cash back present with you for the purpose of redemption we may easily get that redemption back by way of setting it off with our credit card bill, this cash back will reduce our credit card bill up to that amount and this would be a fair redemption of the cash back.
• Receiving through Paper Check
Another technique by which we may get our hands on the redemption of the cash back is through the paper check. In this case, we need to login to the website with the credit card service provider and request redemption through the paper check, that paper check then is being posted to our address and we may then get it cashed.
• Opting for Gift Cards
People who love to shop mostly use this kind of technique of redemption of cash back, in this case the gift cards of different brands may be taken against the cash back we have accumulated and these cards then can be used for the purpose of shopping at our favorite stores.
Making the Most of Your Cash Back Credit Card[iii]
When it comes to looking for the best overall cash back credit card there could be numerous options to go for but there are a few techniques which do allow you to make the best use of your cash back credit card in a way that turns out to be beneficial for you.
- The cash you are earning on your cash back credit card maybe invested back in a beneficial way so that you may accumulate a higher amount of savings. Many cash back credit card providers allow you to reinvest the cash back in shares and other security options which tend to increase over the passage of time and is a good option to consider as well.
- Another thing you may do with your cash back credit card and the cash back you tend to hold for redemption is to keep on saving it through the entire year and when you need to have a huge refurbishment in your house or when you need to travel take all that money out. The lack of cash might lead to a hindrance to cause in your travel plans so why not save this cash back for a rainy day.
Factors to Consider When Choosing a Cash Back Credit Card[iv]
There are a number of people who tend to get excited the moment they plan to move ahead for signing up for a cash back credit card because they think this cash back is great. However sometimes taking decisions too hastily might end up making us lose the track of our journey towards success. A few factors that you must consider before signing up for the cash back credit card may include the following:
• Annual Fee of the Credit Card
The annual fee you are about to pay over the cash back credit card must be accessed appropriately since you are not going to get the entire amount back with the cash back in fact you might be needing to have an eye on the annual fee you are about to pay. In case, the annual fee you are going to pay for the cash back credit card is a higher one than your cash back it is useless to have such a card. The catch here is to have your hands on the no annual fee cash back credit card so that you may actually save something for yourself.
• Rate of Interest
Always look for the best flat rate cash back credit cars because when you tend to invest in a cash back credit card that charges you a huge amount of interest you again are losing your cash in the same and are left with nothing. So, always make sure the rate of interest charged against your credit card is lower and so as the payable amount as compared to the cash back you are going to get.
• Presence of Rewards
Many people love to sign up for a cash back credit card because they need to have their hands on different rewards, these rewards are good because you may shop around for a great deal if you accumulate enough points. So, always make sure that the cash back credit card you is applying for offers you reward.
There could be numerous cash back credit
cards to be offered but which ones suit you and your needs is a question that
shall be answered through your own assessment in a realistic manner.