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Cash back credit cards explained

The initial credit cards were simple, standard ones with no fancy advantages or programs attached to them. With the credit card use increasing and attractiveness getting higher among users, card companies have come up with several offers and loyalty programs with the intend of offering gains to both the consumer and the bank.

Credit cards with incentive programs allow cards holders to earn rewards for the purchases they make utilizing the company's credit card. For each transaction made or a dollar spent, the cardholder gains some points and the points, thus collected, can be redeemed by the consumer. Most companies present good cash rewards as they value a consumer's fidelity and frequent paying ability. A requirement for many of these incentives is for the customer to have a good credit rating. Even the customer feels he is receiving something in return and likes this, making him a more reliable client. Using cash back credit cards, cardholders can gain cash rewards for the purchases they make. Generally, on many cards, users can earn 1 % of the total purchased amount. Some card companies provide even higher percentage but just for the first few months. Often, the incentive begins at 1% and climbs up to 5 % only if you have made purchases of five to ten thousand dollars. There are some cards which give greater cash rebates only at particular business stores or for select purchases. Few companies offer 5% cash back on the select purchases with no annual fee, on the card, levied. Generally speaking, cash back credit cards are always better than gas rebate or frequent flyer points as the cardowner can use the money at his/her convenience. However, one should not be carried away by these returns and should read the offer carefully as these cash back credit cards are expensive to the companies so they normally have a yearly fee. Suppose, a company is presenting you a great rebate but charging you a high Annual Percentage Rate (APR), then it's not such a good deal as it can cancel out the benefits it presents. This is precisely why, while choosing a cash back credit card, the card owner must think over some points which are exclusive to every program. The percentage cash back he would be receiving must be clear. The cardowner should know the maximum authorized limit of the points earned and lastly, time/period extent within which these points have to be redeemed before they expire. A lot of cards have difficult redemption rules like points can be redeemable only in some days which a card owner may not know of and he may miss out on the gain. The card owner should always read the fine print carefully to avail the full benefits. Discover pioneered the cash rebate program with the Cash Back scheme and ever since many card companies have done the same offering cash back credit cards. These include American Express, Citibank, Capital One and many other major institutions. This is quite understandable as such cards are also very lucrative because theypush people to spendmore. Cash Back Credit cards are most useful when making huge purchases as the cash back rate is high. These cards are good for those people who use their credit card widely for making purchases and most significantlyFind Article, for cardholders who are regular with their monthly payments and in no way miss them. These cash back credit cards can earn decent sum of money for cardholders over a period of time if utilized the correct way.

Article Tags: Cash Back Credit, Back Credit Cards, Cash Back, Back Credit, Credit Cards, Credit Card, Card Owner

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ABOUT THE AUTHOR


The universe of credit cards is full of amazing opportunities that can save you a lot of money and lots of problems, for more insightful articles on credit cards and how you can get the most out of them, you may want to take a look at this credit cards guide and learn about things like secured credit cards, gift credit cards and the very interesting prepaid credit cards.



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