Are Cash Back Credit Cards A Good Thing?

Posted by Nick Niesen on October 29th, 2010

Receiving cash back offers always gets people interested. Especially if it means that you can make purchases with your credit card and getting cash back. It's like getting paid to shop, and is irresistible. But can this be?

Actually there are credit cards where you get some cash back, but its usually something between 1% and 3%. This doesn't sound like a lot, but most people won't care how much it is as long as its free.

This is a promotional gimmick designed to attract more customers and to encourage them to buy with their credit cards. Obviously those who buy more will get a little more than those who buy less. However note that the actual amount that is given per transaction may have an upper limit. This is put in place to prevent people from spending indiscriminately, just for the sake of the money they get back.

The fact that they give you cash back or wants to attract more clients doesn't mean they will just give a credit card to anybody who applies.

They will first check your credit rating as with any other loan or credit card. So before you apply it will be good for you to check and see if you qualify. Otherwise you may just waste your time applying for something you don't qualify for.

Before you tie yourself up with something like this read the fine print. In other words, look if there are conditions. Are there any limits? If so, what they. What are the repayment rates of the credit you have spent?

Don't just choose a credit card because it gives you back cash. If they have a high rate of interest they will be able to recoup the money they've paid out, and you'll not have benefited in any real way.

So if you feel that cash back credit card is something you would want to have then by all means go for it. However, research first all the options available to you in the market, so that in the end you can get the best deal for yourself.