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In order to obtain the best cash back credit card and get the most out of it, read the following information about the great rewards you can receive and what to look for in the card.
Cash Back Rewards
Credit cards that offer cash back rewards entice their customers by providing a cash bonus (in the form of an annual check or a monthly credit on their credit card statement) for using the card to make purchases. Purchases are typically rewarded at a rate of one or two percent; for example, if you spend $1000 on a purchase, your cash back reward could be $10 to $20.
Shopping for the Right Card
Looking around for the best cash back option is highly recommended so you can see what's out there and compare each card's offers. These are also some things to consider:
- The higher the cash back reward, the bigger the check will be, so higher cash back rewards do make a difference. However, make sure you understand what types of charges are allowed. Most companies do not pay rewards for cash advances or balance transfers, but other limits might also apply.
- Your cash back reward will be meaningless if the card's interest rate is too high. When choosing the best cash back credit card, be sure you compare not only the cash back percentage but the interest rate as well. A lower interest rate can be more meaningful than a higher cash back reward.
- Some credit cards offer additional rewards or discounts for shopping with their preferred merchants. Be sure you take advantage of the opportunity for additional rewards if the credit card offers rewards at a merchant with whom you do a lot of shopping.
- Be sure to read the fine print of your credit card agreement. Understand not just the reward program but the other parts of the credit card agreement as well.
To get the most out of your cash back reward credit card, be sure you pay off as much of the balance each month as possible. The more you pay off, the less interest you will pay over the long term. Those who benefit the most from cash back rewards are people who use the credit card for every purchase during the month but pay the card off each month as well. This requires a great deal of discipline to prevent from overspending.
