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Cash Back Credit Cards
Cash Back Credit Cards provide a rewards program that offers the card holder cash as the reward instead of gift cards, merchandise or other discounts. Cash back cards can be in the form of cash to the customer or in the form of a statement credit or bank deposit, depending on the card.
Typical cash back rewards that are offered include 1% cash back for all purchases. There are often bonus categories which increase the amount offered. Other cash back offers are based on the Credit Card Company and promotions that are run for the rewards program. Typical bonus categories include grocery purchases, restaurants and gas purchases. Purchases are always defines as purchases minus any returns, refunded amounts or rebates.
Cash back programs are in place to encourage credit card holders to use the credit card for as many purchases as possible. The biggest benefit is received by the customer is when the cardholder uses the card to charge purchases for things they already buy, but then pay the card off each month. When a balance is not carried from month to month the cardholder is able to capitalize on the cash back savings, while not being charged any interest. If a balance is carried from month to month then the interest charges will generally eliminate any savings that can be obtained through the cash back program.
Cash Back Rewards Cards
A few of the cash back rewards credit cards include the following:
Capital One Quick Silver Cash Rewards Credit Card offers 1.5% cash back on all purchases. They are currently offering 0% on all balance transfers and purchases until July 2015. The card also offers a sign up bonus of $100 as long as $500 in purchases is made within the first 3 months of account opening. There is no annual fee on the card and there are no limits on how much you can earn and no restrictions on the account. The rewards that are earned will never expire. The card also waives foreign transaction fees which can save up to 3% on all international purchases. There is, however a 3% charge for all balance transfers completed on the card.
Bank Americard Cash Rewards Card offers 1% rewards on all purchases. There is no annual fee on this card and they are currently offering a $100 sign up bonus if $500 in purchases are made within 90 days of account opening. Bonus rewards are available for gas and grocery purchases and this is an ongoing promotion. 3% is offered on gas purchases and 2% is earned on all purchases at the grocery store. There is a $1500 purchase limit for the bonus points which resets every quarter. The rewards earned will never expire. If the rewards are redeemed through a deposit into a Bank of America savings account an additional 10% bonus is added to the redemption. For all purchases and balance transfers in the first 60 days of a new account opening, the cardholder will receive 0% interest for the next months. The interest rate for standard purchases will range from 12.99% to 22.99% based on the cardholder’s credit. The rate is established when the account is set up.
Chase Freedom credit card offers 1% cash back rewards and a $100 account bonus when $500 is spent during the first 3 months after the account it opened. To encourage the cardholder to add an authorized user, a bonus of $25 is also offered when an authorized user is added to the account. When the account is opened 0% interest is charged for the first 15 months. This is for both purchases and balance transfers. The card offers bonus rewards of 5% for categories that change each quarter. For the quarterly bonus rewards there is a $1500 purchase limit. No annual fee is charged on the card and the rewards points will not expire.
Discover It Credit Card offers 1% cash back on all purchases and bonus categories that change every quarter. The bonus categories offer rewards of 5% on all qualifying purchases. The bonus rewards are limited to $1500 in purchases per quarter. The credit card does not charge an annual fee and offers 0% for the first 14 months of account opening for both purchases and balance transfers. There are also no foreign transaction fees on international purchases. The Discover It card offers a free FICO score each month and will waive the first late payment automatically. Current interest rates will range from 10.99% to 22.99% depending on the cardholders application and qualifications. Discover has 100% US customer service representatives.
Conclusion
Cash back credit cards have become a popular choice among consumers. As a result there are more and more companies that are offered cash back for their rewards program. As the competition heats up card companies will offer additional benefits so that consumers will choose to carry their card. This benefits consumers as long as the credit is managed responsibly.
If you carry a balance each month and pay interest, generally the amount earned as cash back rewards will not cover the interest charges. When an item goes on sale, the savings can be lost when the interest charges are accounted for. Cash back rewards, like any rewards program provides the highest benefit when the card is paid in full each month and used for convenience rather than acquiring debt.
