These days many of us are feeling the financial pinch. From rising inflation to sky-rocketing gas prices, everyone has been effected. If you are looking for another way to save some money, you can do it with cash back credit cards. Here are some things you need to look for when you apply for your card.
Not All Cards Are Equal
Credit card companies have a policy to always advertise only the best features in their ads, which is typical of most people selling anything from used cars to bridges in Brooklyn. The problem is not usually in what is out in the open, but it is what is in the small print that matters. Just because you see a 0% interest on their ad does not mean that everything is good with the rest of the card offer. Look it over carefully - or you may not be getting quite the deal you think.
0% Interest
This feature contains three things that you need to look into. First, there are the balance transfers. If you are serious about saving money, and you have credit card debt, then you need to know what you can transfer and for how long can you transfer it. Some credit cards will only give you this option if you make the transfer when you apply for the card - any other transfers do not get the same 0% treatment. A good cash back credit card will enable you to receive 0% balance transfers for up to one year after you get the card. Also, check whether or not there are any balance transfer fees, since some cards can charge up to 4%.
Another thing you should look at is to determine what it is that comes under the 0% APR. For some cards it applies only to balance transfers, and for others (the better ones), it applies to both balance transfers and purchases.
Then, be sure to look at the time period that applies for the 0% interest. Some companies make this a real short teaser offer knowing that people will either not read the fine print, or not compare cards. For some cards, this period of time can be as short as 90 days. The best cash back credit cards, however, will allow you to enjoy that benefit for between 12 and 15 months.
Cash Back Rewards
Once again, there is quite a variety in what is offered in cash back rewards. The percentage of what is offered as cash back can vary between 1% on the low side to upwards of 6% on the high side. Almost no card will give you 6% on all purchases, but will differentiate between the types of purchases. Nearly all cash back credit cards will give you a better percentage for your purchases made at gas stations, grocery stores, and drugstores. Lower percentages, usually 1% to 3%, apply to all other purchases. You need to know, however, that some cards will require you to maintain a balance, or to make a certain amount of purchases before you get the benefit.
Reward Options
You have a number of ways that you get to use your cash back rewards. They can come to you either as discounts, points which can be used toward purchases at select stores (selected by the card company), or air miles. Some travel cards will also reward you with free hotel stays, discounts toward car rentals, and even credit toward buying a new car.
Interest Rate
For some, this may be the most important consideration. Your cash back credit card will give you special benefits for up to one year after that, the regular rate kicks in. You will want to choose a card that has as low an interest rate as possible for as long as possible. After that, you may want to get a new card.
Weigh your options carefully when comparing each particular offer. Cash back credit cards usually have a little higher interest in order to offset the freebies the company gives to you. If you are a traveler, then you certainly want either a card that gives you air miles, or rebates on your gas purchases depending on which you use the most. Watch out for late payments, too, as this can kick your intro APR back up to the regular rate of interest early. |
