You cannot blame credit card companies for launching aggressive marketing strategies to make people choose their services. Personally, I will not be able to refuse the chance to use a card that will pay me back just for swiping it during purchases. That is why I have a cash back credit card in my wallet. Most card issuers also have this as one of their products and the competition is tough. More and more people seem to be getting wiser because a lot of them apply for these accounts, if not switching from, a regular one.
However, is cash back credit card for you? Before you take the leap, you must first understand how this works. Every time you use your card, the company will reward you a certain percentage as credit payment to your account or they will send you checks. Some companies offer as much as 5% rebate when you charge groceries, medicines, and gas. Not bad at all, don’t you think so? Imagine paying for those monthly basic needs totaling to about $800, it is possible you can get rewards of up to $40 per month. That totals to $480 of annual returns that you can easily add to your savings.
The rule of the game is to maximize the use of your cash back credit card. With proper use, all sides win – the companies earn and users benefit. Keep the following in mind so that you can earn a profit:
Choose a cash back credit card that will work best for you. You can make the switch from a regular card or add another account under your name. Financial experts advise to only keep up to six cards for better accounts management. Do your research and choose an issuer that can give you the best rewards. Remember that 5% reward is possibly the best offer out there.
As much as possible, use this card to charge valid and accepted purchases to earn points. Do not buy things for the sake of earning points, moreover, stick to your budget. Surprising your husband with a pair of shoes? Do not hesitate to charge it if you have been planning to buy this gift.
At the end of the grace period though, remember to pay off all balances each month so you will not be guilty of acquiring those points. This will avoid accumulation of interests and fees that can go higher than your cash rewards. Be sure that you already have the cash to pay for all the stuff you are putting in the card to save you from stress later on.