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Getting a Cash Back Credit Card? 3 Bits of Advice

As the name implies, there is no better method of putting cash back into a consumer’s wallet, and budget, than a cash back credit card. By whatever name the current economic situation is referred to, any amount of help a consumer can get in the way of improving their financial picture and budget flexibility is certainly welcome in most American households. When considering the benefits that come with having a cash back credit card, there are quite a few techniques that can not only maximize the cash back rewards, but stretch that almighty dollar most effectively in the process. A certain amount of careful planning and creative thinking can go a long way toward achieving the most out of a cash back credit card (Read: 2 Things to Consider Before Using 0% Balance Transfer Credit Cards).

Extend the Range of Benefits and Rewards

Just to offer a few ideas, a consumer can decide to pay all of their monthly bills utilizing the cash back credit card, earning the cash right back in their wallet by paying for things like the telephone bill, the mortgage, cable bill, and even the utilities. They can extend the benefits considerably by handing out a cash back credit card to each member of the family allowed to make household purchases, such as those made in supermarkets, pharmacies, and even gas stations. Some cash back credit cards offer from 1% to as  much as 5% cash back on an even broader scale of merchandise, such as in bookstores, restaurants, and even home improvement centers. Just imagine the considerable savings that can be realized by receiving 5% cash back on a total home improvement project.

Cash back credit cards can be a significant boon to business owners and entrepreneurs. When considering the scale of purchases a business generally undertakes for things like computers and electronics, office supplies and furniture, telephone bills, and even business-related travel expenses like cabs, trains, hotel and airlines, the cost savings reaped with a 5% cash back credit card would be tremendous over the long haul. In addition, by extending the privilege to their employees, a business owner can really multiply the savings. In some cases, certain cash back business credit cards have no limits or caps on how much they can earn in cash back rewards.

High Rewards or Low Interest Rates

There are two basic types of cash back credit card reward strategies to employ based on the particular spending habits and bill paying methods. If a consumer has the means and commitment to make sure the monthly balances are paid off each month, the concern for paying the high interest rates in minimal, and the cash back rewards are greater. For those who happen to carry a balance every month, a sharp eye needs to be kept on the down-side of losing whatever cash rewards that were gained against the higher interest rates charged for the purchases. Another tactic is to keep two types of cards available for this contingency – one card used for the cash back reward benefits, and the other card with the lowest possible interest rate to cover the roll-over balances on that account. It goes without saying that getting the most benefit from a cash back credit card is paying the monthly balance off, in full and on time.

When choosing a cash back credit card, a consumer needs to exercise the due diligence required to best serve their needs, lifestyle, and spending habits. Evaluate each of the terms and requirements associated with each individual card offer. These cards all bear certain factors that significantly impact the rewards or savings achieved in the long run – the interest rate, and any costs or charges applied for the use of the card, such as membership dues or maintenance fees. If a particular cash back credit card has a high interest rate associated with it, or a substantial annual fee attached to the account, it could certainly undermine its budgetary effectiveness overall and completely wipe out the funds gained in cash back rewards.

Cash Back is Cash Saved

Maintaining a good spending and repayment strategy means that every dollar received in cash back rewards is taking full advantage of the card’s purpose, convenience and flexibility, which translates into good financial management. A cash back credit card offering 5% is just like a 5% discount. Spending $500 at the supermarket each month means $25 in savings, or $300 per year just on groceries. A cash back credit card that delivers the most all-around benefits – a reasonably low interest rate, no annual fee, the highest cash back percentage on the broadest range of purchases, and no ceiling on the amount of cash that can be given back in the briefest period of time is what the end-game is all about. Choosing a cash back credit card wisely is exactly like having a savings plan built right into a consumer’s shopping list.




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