Cash back credit cards are offers that really appeal to everyone. Let’s be honest, who wouldn’t like to get cash back when they made a purchase? However, we only advise consumers to use cashback credit cards if they don’t know exactly what types of rewards they will use most. That’s because the value of cash back rewards is often times much less than the value of airline miles, or gift card rebates, etc…
However, if you dig hard enough, you can surely find a cashback card that’s worth your time. When using one of these offers, you’ll be given points for every dollar you spend. Once you’ve accumulated enough points, you can use them to add a cash payment to your existing balance.
What To Compare with Cash Back Credit Cards
Interest Rates – Interest rates are the first thing that you should compare when looking for any type of credit card. The bottom line is, if you carry a balance from month to month, the interest rate on your card is going to be the source of the highest fees you will pay. That being said, make sure to pay close attention to all interest rates including standard/purchase, balance transfer, cash back, and default rates.
Point Value – Every time you make a purchase with a cash back credit card, you’ll earn points. Points that later transfer to dollars. However the point to dollar conversion rates are different on just about any offers you look at. Some points may be worth $0.02 per point and others may be worth $0.001, and you’ll find offers that range everywhere between the two. To get the most out of your cash back card, you want to make sure that you choose the offer with the most competitive point value.
How Points Are Earned – With some cash back cards, you may earn 1 point per dollar you spend, on others, you may earn 2 points per dollar. So, the value of the points isn’t everything. If you’ve got high value points that take forever to earn, you’re not really doing much for yourself. Take a look at the points per dollar that you can earn, keeping in mind your knowledge of the point value for the cards you compare.
Reward Limitations – There are tons of offers out there that will boast 5% cash back, but when you read the terms and conditions, you find that the offer is only good for the first $100 or $250 that you spend. After that, you may earn 1% or less. In some cases, there are limits to the amount of cash you can earn in a year no matter how much money you spend. That being said, if you’re looking for the most cashback possible, it’s important to look for limitations and try to stay away from them.
Other Redemption Offers – The truth is, if you get cash back, chances are the amount of the cash you receive will be less than the value of rewards you could receive with the same points on other cards. Because of this, many cash back credit cards have been losing popularity. However, lenders like Discover now offer cash back on miles credit cards as well as other types of rewards credit cards. There are even some out there that offer you the ability to choose cash or a gift card that is worth more. So, it’s important to read into the offers and figure out exactly what your redemption offers are before making your final decision.