subject: Cash Back Credit Cards, Award Programs, Great Deals When You Use Your Card [print this page] When used wisely, cash back credit cards can be a real good deal. How do these credit cards work? Simply, it is a regular credit card that awards a cash award for every purchase charged to your card. The more you charge, the more you earn. The cash award appears as a credit on your monthly credit card statement.
Each credit card company has its particular rules and conditions. So your best bet is to check with your card company for details. But most award programs base their cash awards on one or two percent of purchases made to the card. For example, charging a thousand dollars on your card would earn a cash amount of between ten and twenty dollars. Now it is not like you are going to become a millionaire on these refunds, but these refunds can add up to a nice little bonus every month. If somebody hands me a ten dollar bill, I'm not going to turn them down.
Some people simply use their credit cards with a cash back program for all their daily, day-to-day spending. Then they make sure to pay the balance every month so there are no interest charges. This is the same as reducing your daily living expenses by one or two per cent per month. Why would you not do it?
You would be better off just paying cash for your daily living expenses if you can not pay off your monthly credit card balance. This is because the amount of the cash rewards will not offset the interest you will be charged. But if there is any way you can manage to pay that monthly balance you should do it. The cash rewards can really be a nice bonus that can lower your day-to-day living expenses.
You can use your debit card to earn cash rewards too. A debit card transaction may be as a credit card and are therefore eligible for cash back programs. To have your transaction be processed as a credit card purchase do not provide your PIN and, instead, sign the standard credit card approval receipt.
Cash back credit cards are a very useful technique for stretching your budget. Those tiny cash rewards will add up into a significant total. You will get a big smile on your face when you see those cash rewards on your credit card statement every month.
