Some people are smart and frugal enough to pay their credit card balances off monthly and actually earn cash back on all of their purchases. Credit card companies will pay you to use their cards, banking on your inability to payoff the balance! It pays to pick the right credit card based upon the features and benefits attached to it. You can and should earn yourself money through your purchases if you’re frugal enough to payoff your cards entire balance each month, otherwise what’s the point in getting a card with cash back rewards if you’re paying more through a higher APR (a higher annual percentage yield simply means the interest rate is higher, thus the financing costs will be greater). That’s where the Credit Card companies get you, they’re banking on charging you more for the card in anticipation that you won’t pay-off the balance each month. Some people make an extra $1000 or more a year by simply paying all their bills with their credit card, then paying off the balance each month. They take advantage of the float on their money (float is simply the difference in when you pay your bill with your credit card and when you have to pay the money back – and the fact that you can earn interest on your money if you put it in savings until the bill is due). If you pay cash on all your bills, you can’t earn interest on that money, but with a credit card you can. Not all credit cards are are created equal with regards to rewards, especially cash one’s. If you’re in the market for cash back rewards, you should definitely consider these four cash back rewards cards:
- Capital One Platinum, No Hassle Cash Rewards is the top promoted cash back reward card. You can get 2% on gas and on groceries at the big food stores. So it’s ideal for the larger family commuter. You also get 1% on other ordinary purchases. This card offers two ways to redeem your cash savings; firstly any time you want it at your convenience or secondly through a regular automatic draw down. This card is only open to people with a good credit score and who use credit in an average way. There is a special version of this card for young people with a limited credit history.
- Discover More (SM) Card is an even better way to save money with cash back rewards because unlike most cash refunds that come with credit cards they aren’t confined to a small number of categories like gas, supermarkets and they don’t just pay 1% rebates on everything. Get $50 Cash Back Bonus with the Discover® More Card!With Discover there is no cap on the amount of cash rebates you can earn in any year. You earn 5% rebates on all of these items… airlines, hotels, car rentals and cruises, which makes great savings for the traveling card user. For the homeowner there is 5% on home improvement store spending, department stores and clothing stores. For parents the cash back rewards at gas stations, theme parks, zoos and book stores can really add up. The 5% rewards continue at grocery stores, restaurants, movie theaters, movie rentals. While at over 100 online retailers such as GAP.com, OldNavy.com, Dell.com, BestBuy.com there is a huge 20% refund. Add to all of this the fact that you can double the value of your earned cash back if you redeem them for select gift cards at more than 100 participating tourist organizations. For example Universal Orlando Resorts and Hyatt Hotel and Resorts Gift Card.
- TrueEarnings Card from Costco and American Express is another credit card for good cash back rewards. It pays more than the standard 1% on gasoline spending, restaurants and travel. When you sign up for this card, you are asked to become a Costco members (this costs $40 a year).
- Iberiabank Visa Gold earns you 1% in cash back on all qualifying purchases with no limit on cash refunds and no expiration date on eligibility for accounts in good standing
Of course it isn’t just the cash back rewards that make credit cards a good way to save money. You must also look for cards with low or zero introductory APR on balance transfers for early billing cycles. This with cash back can add up to real savings. But when it comes down to it, you shouldn’t get a cash back reward card unless you’re going to payoff the balance every month, because the increased financing charges on these cards will likely more than cancel out the rebate you are earning, and the card will end up costing you more than others with a lower APR.