Do you like buying stuff from online auction shops and E-stores every so often? Are you compulsive shopaholic who grinds that credit card (or cards, whichever applies)? If your finances are a bit well off, (meaning you do little or no borrowing from your savings or from someone else’s savings just to make ends meet) and you’ve got a sterling credit card rating, Here’s a tip: Ask your credit card company for their cash back credit card options, or switch to a company (like Discover or American Express) that does. Why? Only for a simple reason, free cash! Yep, you heard me right folks: cold, hard moolah. All yours for the taking, you want more good news? It’s tax free.
Cash back credit cards are a form of reward scheme employed by very reputable credit card companies to entice people to make [more and more] purchases with their credit cards (Yes, these companies throw serious cash at marketing gimmicks in order to get their cards in our pockets). Where a card issuer operates such a cash back scheme, card holders typically receive between 0.5% and 2% of their net expenditure (that’s purchases minus refunds) as a yearly rebate, which is either credited to the credit card account or paid to the card holder separately, for example by cheque. The concept of cash back is similar to frequent-flier miles you earn on commercial airlines, gas rebates from the petrol station or reward points from your favorite shopping mall/commercial center. The more you shop or use their services (or in this case use your cash back credit card), The more you’ll be raking in free cash in annual rebates. Note, though, that some card providers claiming “cash back” will instead give you reward points redeemable only at affiliate or participating commercial establishment in lieu of cash. Still, that’s not half bad, particularly if you’re looking for huge discounts at pricier boutiques.
Using cash back credit cards can be very rewarding. Whether it’s cold cash or reward points, gaining a few tax-free rebates just for doing what you love to do is a smart, practical way to get more from your card. Couple that with a low interest credit card, you’ll be reaping more benefits than ever from card purchases (a real boon to chronic, compulsive/impulsive shopaholics) Just always remember to spend within your means (and don’t say I didn’t warn you J)
So go ahead and use that card, albeit wisely. You’ll be thankful you did when you get that little extra.