Cash Back Credit Card - A Practical Guide

Summary: This is a guide to prudent spending using your cash back credit card. It talks about leveraging the benefits offered by issuers to your maximum advantage.

The cash back credit card is a financial tool that lets you save even as you spend. However, as with all financial matters, due diligence and care must be exercised while choosing. Having a practical guide to select and use your cash back credit card in order to get the most out of it can be most beneficial. So What Are These Plastic Wonders? Cash back credit cards have the usual functionalities of credit cards. You can use them to fill gas at the gas station. That means you don't need to carry a thick wallet to meet your demand for the black gold. Also you can use it to shop online, buy a book, and send flowers to someone a thousand miles away, all with the help of your trusty plastic wallet. But that is not what distinguishes a cash back credit card. What makes it unique is that it gives you back a percentage of the money spent using it. That's like getting an automatic discount on every product you purchase using your cash back credit card! Do They Make Saving Your Hard Earned Money So Easy? Saving money is tougher for some people than earning it. However buying the right cash back credit card and using it prudently makes it possible to save money, sometimes to quite a large extent. Remember that the best cash back credit cards are different for different people. Everyone has different needs; choose a cash back credit card that is most rewarding for you. When spending money, remember not to go on a spending spree. Most importantly, cash back credit cards are most suitable for those who do not carry a monthly balance. If you do so, the interest payable largely negates the benefits of your card Just How Do They Work? So why should a credit card company reward you for spending money? The answer is simple; the card issuer is merely sharing the profits that it has already derived from you. When you buy from a supermarket for example, the retailer is charged a fee by the credit card company. The company then shares part of their profit with their end customer with a view to increasing their customer base. The best cash back credit cards charge 0% introductory APR and a standard rate of 1% cash back on purchases, with special rates of up to 5%. That is a lot of money saved! Choosing Your Cash Back Credit Card Remember to make a choice based on your specific usage of money. Do you generally shop for/at the highest rate a cash back credit card is offering you? Check to see if your cash back credit card charges an annual fee and the amount if it does. Check the fine print, do your APR math and find out the card that works best for you. Remember a little work while buying your card can save you a lot of dollars later. Using Cash Back Credit Cards Remember to pay off your balances on receiving you monthly statement. Do not overspend as this is another way that the benefits of a cash back credit card are washed away. You don't want to give back all the cash you got back. If your credit card provides a healthy cash back rebate on certain retailers, gas stations etc, it makes good sense to buy from them. Money saved is money earned. Buying the right cash back credit makes good financial sense. Using it wisely however is more important. Utilize the internet to find some of the best cash back credit cards available. And once you have chosen well, be sure to use it well to get the most from your cash back credit card.