Cash back cards are not a new idea. Cash back with purchases began around 15 years ago and since that time cash back cards have continued to be popular with consumers. Money talks and when cash is given out consumers want to have a piece of it. Consumers love getting cash.
Getting cash back is a big incentive for using a credit card for purchases you were going to make any way. In its inception some cards offered 5% cash back for all purchases. Those days are gone; however there are some cards that offer 5% back on purchases made at gas stations, grocery stores and drug stores. Other purchases are around the 1% or 2% cash back.
Earnings used to be paid out as a lump sum at the end of the year buy card companies realized that they couldn’t keep the momentum going as it was too expensive for the companies to keep up with consumer spending. As a result credit card companies restructured their cash back rewards programs. Some companies offer, for example 1% cash back on the first $2,500 each month.
The Best Cards
A quick review of the cash back cards has revealed a few similarities among the very best cards currently available. For a quick run down on some of the best cards consider these:
• Chase Freedom™ Visa – This card offers 1% back on all purchases as well as 5% on certain purchases throughout the year. To get the 5% the card holder must be in good standing and follow the terms laid out by Chase. The big deal with Chase Freedom Visa is its 20% additional cash back while shopping online with at specific sponsored merchants. There is also a 0% 6 month introductory rate, which also applies to account transfers. On the downside is the annual fee. All in all, this card offers a great reward opportunity
• Citi CashReturns® Card – This card also offers 1% back but puts a limit of $6,000. The first $6,000 gets 1% cash back then this card offers 3% cash back on all gas and grocery items. With a 0% introductory rate on purchases until May2011 this no annual fee card makes it a good deal.
• Blue Cash® American Express – This card offers the best rewards for big spenders. It also offers 1% cash back on gas, groceries and drug stores and 0.5% cash back on everything else up to $6,500. After this plateau has been reached the next level is 5% cash back on everyday purchases and 1.25% on everything else. The Blue Cash card also has a 0% introductory fee and has no annual fee.
The Draw Backs
With the incentive of getting some good cash, some spenders are apt to overspend to see the actual cash. This often leads to consumers overspending. Some cards have caps to encourage consumers to spend more to get the cash back. It is wise to never over spend to get a rebate.
Getting the money can be another issue. Each card seems to offer a different way to redeem the cash. Some cards roll the money over onto the next month’s bill, some will forward cash after a certain dollar amount has been reached and some require a call to customer service.
There is no one card that can suit every persons needs each person needs to tailor their cards to their spending. Tiered cards offer better rates depending on how much is being spent.
When shopping for a cash back card, as with any card, keep an eye on the small print. There may be penalties for late-payments and extravagant default rates.
Disclosure: The terms of each of the card offers outlined above were accurate at the of writing. However, terms of rewards programs are constantly changing so be sure to check directly with the card issuer for the latest terms and conditions of each offer.
Related Posts:
- Card Issuers Turning Back to Cash Back Rewards Incentives - There was a time when Discover was the only cash rebate card on the market. These days, it seems almost everyone offers...
- Keeping It Simple Is Best With Cash Back Cards - The only things credit cards have over hard cash are their rewards in points and miles. Unless you know how to choose...
- British Consumers Most Often Prefer Cash Back Cards - British credit card users like to save money when they use their cards, and new research shows that 41% of UK residents...
- Cashing In Big On Cash Back Sign-Up Bonuses - SFGate.com recently ran a story about how credit card issuers have been rolling out a bevy of new cash back credit card...