When we talk but cash back credit cards, we are talking about a credit card rewards pattern in which you get to earn some cash interests on any amounts of money spent by using your card over duration of time. As much as the card may offer cash backs on any moneys spent it is however advisable to check on the other details about the card to save you from any possible penalties that may render your cash back rewards useless.
Important Factors to consider
When going for any credit card, it is important to take one very important factor into consideration. This is the fact that no matter how much you may accrue in bonuses from your credit card, the bonuses will make no much sense if you fail to honor the payment deadline every other time. Why should you keep his in mind? The main reason is that all late payments to credit card transactions attract penalties in the form of increased interest rates among other things. In a worst-case scenario, the credit card could as well be cancelled. Of what use would any cash back be if you end up paying more interests that you ever earned from the cash backs?
How do cash back credit cards work?
Cash back credit cards work in very simple pattern, just like any other credit card incentives such as mileage or bonus points, cash backs are earned per specified amount spent. If a credit card offers a cash backof$1 per every $50 spent, then your total cash backs per month would be calculated by adding up your total expenditure for the month then divide it by 50 and multiply it by 1.For a more practical example, lets assume you spent $1000.00 in the last month. To get your cash back you would divide 1000 by 50. Out of this calculation, you would get 20. your cash back would therefore be the 20 multiplied by 1 coming to $20.it is very important to note that for you to find any value in the $20 cash back, you should settle your credit within the stipulated time frame to avoid any penalties that would eat into the already earned cash backs.
Disadvantages of credit cash back cards
As much as the cash back credit cards have an advantage by giving you the flexibility to use your cash simply because cash is easy to manipulate as opposed to other bonuses, they also have some short comings. The main shortcoming being the penalty they impose if you fail to pay in time. It is important to note that they mostly do not pester you to pay in time simply because they make more money when you pay late.