subject: Understanding How Cash Back Reward Credit Cards Work [print this page] Understanding How Cash Back Reward Credit Cards Work
Until two decades ago a credit card company was not completely recognized, leave alone cash back credit cards, in the fiscal market place around the globe. Way back then, the global opening for plastic was rather over-competitive and very much commoditized. Thus the saturated market banked on every add-on made available by the credit card companies which were operative then. The hyped brand recognition brought to the global front the cash back credit cards.
Today, the world of business and personal pursuit recognizes the role played by the cash back credit cards. This very popular marketing scheme involves offering a cash back reward every time you use the card to make a purchase. In this way the card company gets headway into the financial market and earns a rung on the corporate ladder. Initially the slow going fierce competition helped many a company to remain buoyant and these are still operative even today.
With the help of the cash back credit cards a decent percentage of the amount that the company charges you on your card for purchases is actually given back to you account within a predetermined time frame. Most of the companies offer the annual coverage of the scheme. Ranging from the humble 1% on every purchase, the amounts now go up to even 25%!
The cash back credit cards have definitely set the standard for plastic in the fiscal market. Today almost every card issuer offers a cash back scheme and many even offer increased amounts with every subsequent year of card ownership. With the help o the structured tiered offerings the percentage of cash back can be determined by you depending on the amount you spend.
Cash back credit cards are being issued as valuable assets that help the creditors to make the same profit as you do with the help off the slightly higher interest rate. Available in the Standard and Premium categories the slightly higher APR is completely forgivable considering the benefit you get.
As a consumer it helps to bank on the cash back credit cards and negotiate a way to reduce the set APR. You can even crack down on the fine print and avoid interest charges altogether! How? Simple, agree to pay any outstanding balance in full each month and do not use any cash advances or balance transfer facilities!
Cash back credit cards bring along fine print within the credit card agreement clauses for the cash advances, money back and balance transfers. You need to look into these and address the interest applied at the very onset of purchase. Also take a look at the transfer fee. The cash back benefit should not end up costing you more than a regular card offer.
When shopping for cash back credit cards also look into the interest rate that is associated with every month that you carry forward a balance. This will affect the manner in which you can clear your debt. Cash back credit cards help you to save money but it is pivotal to use the card properly and manage the balance available.
