Cash back credit cards are simply ordinary credit cards except for the fact that they give you rewards in the form of cash whenever you meet their set terms and conditions. From the typical set up, the banks are usually supposed to share on the interests charged on the use of your credit card with the credit card service provider. High competition for clients led some credit card service providers into introducing incentives to lure clients into subscribing to their credit cards. The most common incentives were bonuses and points which were to be converted into either items or services that the credit card service provider deemed suitable. As the competition got even stiffer, some of the credit card companies realized that cash rewards are more flexible and can give the client a better reason to subscribe to their credit card. When the strategy proved to be productive, more and more credit card service providers adopted its use.
Why go for a cardcash back credit
Knowing clearly well that the credit card service provider is making some profit every time you use your credit card, it should come as a relief to receive at least a share of this profit in terms of cash. Other credit cards have their own rewards and bonuses however, the short comings of such incentives is the fact that they will obligate you to a price that you may not need at that particular time. Cash on the other hand gives you the dynamism of being able to get whatever gift you may deem suitable to you under whatever circumstance. Due to the diversity associated with cash, it is always a welcome gift therefore credit cards which give this type of reward stand a better chance of winning over subscribers as the value of cash is easily comprehensible to many as opposed to bonuses such as mileage.
Shortcomings of the card cashback credit.
Every card has its own shortcomings and the card cashback credit is no exception. The most glaring disadvantage of the card will be evident should you fail to pay your dues in time. If you happen to have accrued so much cash back rewards and you delay in paying your credit card debts in time, then the rewards may as well be useless since the interest charged may surpass the rewards earned. Another common problem that may befall the owner of such a credit card is the fact that it could be tempting to continue spending due to the obsession of earning more cash as you spend. In such a situation, you may find your self being unable to control your spending leading to trouble.