How exactly does Cashback Credit Card work and how realistic is it attracting more consumers. It’s really exciting earning a little more money back on your daily spending with your credit card.
With cashback Credit cards you do not need to dwell on the thought of how much you’re earning while using the credit card. Redemption with cashback is very easy, a lot of people just get their redemption by deduction from their statement balance or redemption for gift cards.
What’s Cashback Credit Card
At the moment, cash back credit cards are now offering a percentage of cash back on every qualifying purchase. If a credit card is offering 1.5 percent cash back on every purchase. for example, you would earn 1.5 cents in cash back rewards for every dollar you spend.
Some credit cards offer a flat percentage back on all purchases, while others are offering higher cash back percentages on popular spending categories like gas or groceries.
Unlike Travel Credit cards, which often reward cardholders with points or miles that have different values depending on how they get redeemed, cash back rewards have a fixed cash value. Cardholders would redeem that cash back in the form of statement credits, online purchases, and more.
Best Cashback Credit Card
Here, I would be giving you some of the best Cashback Credit cards. These cards would get you the best offer possible. They include:
- Chase Freedom Unlimited®
- Wells Fargo Active Cash® Card
- Citi Custom Cash℠ Card
- Discover it® Cash Back
- Citi® Double Cash Card
- Capital One SavorOne Cash Rewards Credit Card
- Blue Cash Preferred® Card from American Express
- Chase Freedom Flex℠
- S. Bank Cash+®
- Bank of America® Customized Cash Rewards credit card
- Bank of America® Unlimited Cash Rewards credit card
- Capital One Quicksilver Cash Rewards Credit Card
Types Of Cashback Credit Card
Cashback Credit cards are in various package. The bonus category tiered rewards and flat percentage cashback cards, all these categories still payback. A flat percentage of cashback is suitable for a targeted set of people or crowds. The bonus and tiered rewards cards offer more rewards but one must work hard to maximize cash back in certain spending categories.
As the name implies, Cashback is the percentage of the transaction amount as cash back. It is a rebate of a percentage of the purchase you have made on your card. According to Daniel Mahoney, a certified financial planner in Atlanta, when you pay a Merchant $100 with a Credit card, the merchant only receives about $97.
The exact percentage depends on the card abs with some credit cards and the spending category of the purchase. For example, a Credit card could earn a higher percentage especially when it’s being used at a restaurant, or office supply store. Assuming, you spend $100 with a card that earns a 1% cash back rate, you have accumulated $2. Then you will keep accumulating cash back until you decide to redeem what you’ve earned.
How Cash Back Credit Card Work
Note that, not all transactions are eligible for cash back. Credit card issuers state these exceptions on the credit card terms and conditions. You cannot earn cash back on cash advance and balance transfers. Purchases made with the same cash equivalent items, such as gift cards and person-to-person payment services such as Venmo.
How to Get Cashback from Credit Card
Cashback Credit cards can be redeemed through different means, for example, through an online credit card account or by contacting your Credit card issuers. Redemption of credit card cash back minimum depends on the issuers but $25 is a common redemption minimum. Also, methods of redemption vary but generally, it involves one of the these mentioned below
- Gift cards – your cashback can be used to buy a gift card. Some stores occasionally put up deals, where customers can get gift cards cheaply.
- Checks –it can be received by mail for your cash back
- Bank account deposits – your cash back can be deposited into a bank account that is linked to your credit card.
- Statement Credit – this is the simplest option, apply your cashback to your current credit card balance. Except you don’t use your card regularly and you’ve more cashback than your current balance.
What To Check out for in a Cash Back Credit Card
- Cashback rates–check out for a card that will earn you that extra cash back. So check out your monthly expenses, check places you spend your money, then pick cash back Credit cards that match your spending.
- Annual fees–you’re not too good with paying an annual fee for a credit card and they are many cash-back credit cards without an annual fee. So such cards are worth it if you have high spending.
- Sign-up bonuses – many cash-back cards have sign-up bonuses, which are a good way to earn even more back when you get the card in a short period of time.
Some other features include a 0% intro APR offer that applies to purchases, your balance transfer, or both.
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