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Information Is Key For Making The Right Choice With Cash Back Reward Credit Cards

by / 0 Comments / Mar 05, 2015

Cash Back Rewards Credit Cards are one of the three main types of rewards card offered to today’s consumers. They compete with rewards cards that offer points and miles as an incentive for the usage of your card. Regardless of the medium, it still boils down to cold, hard cash. The value of points and miles is still weighed against what they can buy. Basically, no matter what form in which your rewards are offered, their worth is still tied to their monetary value. Cash back cuts out the middle man, and more and more consumers are turning to the simplest option, which is provided by a card that offers you a percentage of your cash expenditures.

A Little History

The extension of credit is a pretty old practice. In the early days, when our nation was being settled, credit accounts were quite prevalent. This was due largely to the exchange of essential goods for a monetary value that was necessary for the purchase of items that the farmer and his family needed but were unable to produce easily on their own. They brought the merchant eggs, produce, furs and meat. Essentially, farmers exchanged their goods for merchandise like fabric and tools that were more easily manufactured in the “big cities”. General stores extended credit to the farmer in a ledger which allowed them to purchase these elusive wares.

Eventually, as cities grew and the reliance on farming industries lessened, actual money and credit became more desirable tender. Fast forward to urbanization and the increased reliance on department stores to obtain your day to day necessities. Hey. “Don’t fix it if it ain’t broke”. This was the birth of the “charge account”. Consumers could run up open bills with very specific merchants that had to be paid monthly.

Some financial smart cookies soon realized that this practice could be capitalized upon by the extension of credit by several merchants simultaneously via a single card. This evolved into the formation of franchises that eventually developed into credit card companies like Visa and MasterCard.

After a great deal of infighting and the resulting legislation, the credit cards we are familiar with today started to evolve. In the late 1980’s, rewards cards started to appear. In these early days, airline cards were the big draw. Frequent Flyer miles tied to credit card accounts became more and more prevalent. Competition grew, and financial institutions developed new methods of attracting consumers. This eventually resulted in the cash back reward credit card offerings that we are familiar with today.

Who Benefits with a Cash Back Rewards Credit Card

If you travel frequently, especially via air, you might be better off with a Rewards card that offers miles for your purchases. However, if you never fly, take cruises, or stay in hotels, credit cards with cash back make much more sense. To qualify for the best cash back offers, you will need a good to excellent FICO credit score, typically between 690 and 850. It’s also essential that you don’t carry a balance if you wish to maximize your rewards.

Important Features to Consider in Cash Back Reward Credit Cards

There are a number of important features to review when making comparisons between Rewards Cards.
When selecting a credit card with cash back, the following information is very important.

  • How do you earn your cash back?
    How You Earn Cash Back with a Rewards Credit Card. Learn the ins and outs of earning cash back rewards through sign on bonuses, purchases and other reward offerings.
  • How can your redeem your earnings and how easy is the process?
    Redeeming Your Cash Back Rewards. Review the ways you can access and spend your money once you have earned it.
  • How much cash can you earn?
    How Much Cash Can You Get Back?. Get the truth about your potential earnings through cash rewards credit cards and the best ways to capitalize on these cash back options.
  • Which cards offer the highest ongoing cash back earn rates?
    Identifying the Cards that Offer the Best Cash Back Options. Review the varying earn rates available and determine which approach is best for your particular spending habits.
  • Which cards offer the highest cash back introductory rates?
    Introductory Bonuses – Oh Yeah!. Determine whether a cash back program is sufficient for your needs with a realistic review of the limitations on cash back introductory rates.

Once you have determined whether a cash back rewards card is a good option for you, take some time to review your everyday spending habits over the past year. Use this information to identify what you want and need from your cash back rewards credit card by identifying where you are already spending your money. Armed with this valuable information, you are then prepared to review the features above to select a cash back rewards program that is suited for your unique needs and spending patterns.

About the Author

Elizabeth Boyd is a financial writer and paralegal. She has written extensively for the financial and credit card market for several years and feels strongly about making consumers aware of their choices and rights.

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