Cash Back Credit Cards

Beat the Banks at Their Own Game by Using Cash Back Credit Cards

Cash back credit cards - what a great idea!

For those of us with the discipline to pay our bills in full before the end of the grace period, you get two gifts: 25 days or so of the free use of your money and 1 to 5% of your purchases back.

The banks will hate you, but will keep offering this type of credit card deal, probably for the same reason a casino will "comp" you to a free room. They figure you'll keep using it enough and you'll actually start running up a balance and they'll start making money.

Banks don't make money giving you rebates - they make it by charging you interest and fees. So these credit cards might be more likely to carry an annual fee and charge above average interest.

But you can beat the bank at its game if you know the rules and follow them. In other words get them the full balance on time.

Lots of people will charge just about everything on one of these credit cards and get a small portion of their money back. It's a great deal.

Some things to consider

Is there a limit to the amount of cash you can get back in a year? If you exceed the limit, you'll get nothing but a bill in the mail.

Can you avoid an annual fee? No need to give the banks anything if you can avoid it.

How about interest rates? If you do feel like you might slip up and start carrying a balance, a low interest rate card is a good choice.

Can you avoid the temptation of buying things you don't need, or even worse, that you can;t afford, just to get the rebate? Remember the rebate is only a small fraction of the interest you will be charged.

Do you get a rebate on all purchases or only certain limited items like air fare? The more ways to earn your rebate, the better.

Do your rebates expire? Do you have to charge periodically to keep them in effect?

How do you get your cash back back?

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