Credit cards with reward programs allow cards holders to earn incentives for the purchases the make using the company’s credit card. For every purchase made or a dollar spent, the cardholder earns some points and the points, thus accumulated, can be redeemed by the customer. Most companies offer good cash rewards as they value a customer’s loyalty and regular paying ability. A prerequisite for most of these programs is for the customer to have a good credit standing. Even the customer feels he is getting something in return and appreciates this, making him a more loyal client.
Through cash back credit cards, cardholders can earn cash rewards for the purchases they make. Usually, on most cards, customers can earn 1 % of the total purchased amount. Some card companies offer even higher percentage but only for the first few months. Most of the time, the program starts at 1% and climbs up to 5 % only if you have made purchases of five to ten thousand dollars. There are few cards which offer higher cash rebates only at specific merchant outlets or for select purchases. Few companies offer 5% cash back on the select purchases with no annual fee, on the card, charged.
Generally speaking, cash back credit cards are always better than gas rebate or frequent flyer points as the cardholder can use the money at his/her convenience. Nevertheless, one should not be lured by these rebates and must read the offer carefully since these cash back credit cards are costly to the companies so they normally have an annual fee. Suppose, a company is offering you an attractive rebate but charging you a high Annual Percentage Rate (APR), then it’s not such a good deal as it can cancel out the benefit it offers. This is exactly why, while choosing a cash back credit card, the card holder must consider some points which are unique to every program. The percentage cash back he would be getting should be clear. The cardholder should know the maximum possible limit of the points earned and lastly, time duration within which these points have to be redeemed before they expire. Many cards have complicated redemption policies like points can be redeemable only within few days which a card holder may not be aware of and he may miss out on the benefit. The card holder should always read the fine print carefully to avail the full benefits.