Making a Difference with Cash Back Credit Cards

Posted by Nick Niesen on October 29th, 2010

Getting cash back while using your credit card makes all the difference in the world, especially as high as prices are today. Cash back providers can provide cardholders with cash rewards/rebates and more while employing the credit card. Cardholders make purchases using the credit card, and in exchange, the card providers will add points per purchase made on the card. Cardholders can take advantage of the cards, since some cards make it easy to build up cash rebates, based on dollar amounts. The industry average per rebates is 1%; however, cash rebates differ, depending on the credit card and provider.

How does it work? The cash back card providers will charge the business where the card was utilized a fee. The card provider then provides the cardholder a portion of that fee in the form of a cash rebate.

It is important to shop around while considering cash back or rewards credit cards. Some credit card lenders will charge higher than average Annual Percentage Rates (APR's), in an effort to recoup some of the fees paid out. The annuals fees can range from $25 up to $100 yearly and some lenders will charge more.

Rebates and Balance Transfers

Card issuers can also offer certain cardholders superior rebate percentages providing the card is utilized often. Other lenders may offer superior rebates, while making purchases at supermarkets, gas stations, and selected retailers. Balance transfers or cash advances are often excluded from the rebate deals, i.e. you will not receive cash back per cash advance or Balance Transfer made.

Over the Internet there are various cards offered, which include the cash back cards. Potential cardholders should apply for suitable cards with cash back rebates, especially cardholders who will not carry a balance monthly.

Interest Rates and Rebates

Standard platinum credit cards often have lower APR?s, and most often will be lower than cash back credit cards. Therefore, if the interest rates are high on cash back cards, it will counterbalance the rebates received. This means you will repay the credit card lenders, paying back the rebates through interest payments.

As you can see, if you are not vigilant about paying your monthly balance on the cash back credit cards before the grace period, you will pay more on the cards via interest rates and will more than likely be paying more in interest charges than receiving in reward point benefits.

The Chase Cash Plus Rewards card offer offers 5% cash back for purchases at drugstores, gas stations, or grocery stores. The cards offer 1% cash back on all other purchases made with the card. The introductory fees are 0% up to one year on APR and balance transfers, purchases, and there is no annual fee. And remember, typically you must have very good credit to get approval for cash back credit cards.