Cash Back Credit Cards

Written by Kathleen Gagne
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There are advantages to using cash back credit cards, and the perks these cards provide are particularly beneficial to those who regularly pay off their credit card balances each month. This is because those who pay off their cards every month incur minimal or no interest charges. The cash back, therefore, means that they are paying at least one percent less than the actual cost of almost everything they purchase.

How Do Cash Back Cards Work?

Cash back credit cards usually offer at least one percent back for making purchases with the card. Generally, the more you use the card, the greater the benefit. Some cards offer cash back as high as five percent for purchases made at specific retailers while offering a lower percentage on general purchases. Because of the cost of returning the cash to cardholders, some companies charge an annual fee for cash back cards.

Cash back cards come with many of the same advantages as general purchase cards, such as zero or low introductory APRs and zero percent interest on balance transfers for a specified amount of time. Depending on the card, there may be no annual fee, but in that case, you might find that there is a limit on the amount of cash back you can obtain in a year. That limit is usually around $500.

One platinum card I found offers five percent cash back on all supermarket, drug store, and gas station purchases and one percent on all other purchases. Their limit, however, is $300 cash back for the year. This particular card issues a check automatically each time the cardholder's cash back amount reaches $100. Because of the wide range of card costs that you will find with cash back credit cards, it's a really good idea to check out several websites and look over the section that shows exactly what the fees and charges will be as well as the cash back procedure and limits.

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