Many credit card companies are attracting potential customers with offers of hundreds and even thousands of dollars in cash return bonuses. Credit cards that offer rewards can be valuable to make purchases on credit, especially cash back credit cards that are becoming more popular. Even so, experts warn that credit cards with rewards are only rewarding if you have a strategic plan to manage the debt.
Before purchasing a credit card in the hope of getting a cash reward to consider a few aspects.
Annual fee of the credit card you are considering taking
Some credit cards reward their cardholders with a credit card without annual fee. Others don’t. In fact, some cards have annual fees between $500 and $ 1,000, even for adding additional headlines. Before having a credit card with cash back, check the fine print of the annual fee. Often it is not worth opening those high annual rate credit cards.
If there is an annual fee, you will have to weigh what estimate you will receive in cash return bonuses, against the dollar amount of the annual fee. If you think you will earn more in cash return bonuses than you can pay in the annual fee, the card could be a good business. If not, it is simply a waste of money. Also, there are a lot of cash back cards that do not offer an annual fee, so you should take a look at those cards before you consider having them.
What percentage of cash back is being offered
Each card has different parameters regarding the percentage of purchases that will pay in cash. For most purchases, you will receive between 1 and 2 percent cash back. However, many cards offer a higher percentage of cash back for certain categories, such as gas purchases, restaurants or purchases at department stores or specialized stores. It is always advisable to compare the cash return percentage categories of each card with the spending habits of your own family before choosing a cash back card. It is also important to keep in mind that most cards have return limits. When comparing cards, consider what the total cash limit for each company’s card is.
Interest rate of the card
This is another very important point to consider while choosing your credit card. While some cards have reasonable interest rates of 10 to 12 percent, others have astronomical rates of 25 percent or more. Again, it is important to read the fine print before accepting any credit card offerings so you can be sure of getting the best possible interest rate.
It is also important to make sure that the amount of interest you pay each month does not exceed the amount of your cash return bonuses.
If you have the habit of paying your credit card balances in full each month, a cash back credit card is a great offer and you will not have to worry about paying interest. However, if you have the habit of carrying card balances from one month to the next, you may want to think twice before requesting a cash back card to avoid paying more interest than you would have on other cards. If you can find a cash back bonus card that has a lower interest rate than your current credit card, it might be worth the change. As always, it is suggested that you settle your debts as soon as possible so that you have more freedom in the use of your money.
If you have evaluated the above parameters and decided that a credit card with cash back is the best for you, it is important to look for the best return plan. Here we will discuss two cash back bonus cards that could be useful to you.
The Citi Double Cash Back card
From Citi’s website: “The Citi Double Cash Card is a cash back card that rewards you with a money back twice with an unlimited 1 percent on purchases, plus 1 percent while paying for those purchases.
The Citi dual card also offers an annual percentage rate of 0 percent on balance transfers during the first 18 months (no cash back on balance transfers), no annual fee and occasional promotional offers when percentages increase bonus for cashback.
The Visa Signature Fidelity Rewards Card
The Fidelity Rewards Visa Signature card offers a 2 percent unlimited cash refund on all purchases. In addition, the reward points never expire. Other benefits of the Fidelity Rewards card include:
- No charges in the annual fee
- Concierge services
- Zero liability for fraud
- Exclusive travel and shopping offers
Both cards are classified among the main cash back bonus cash back credit cards currently on the market.
Cash back rewards cards can be a great way to bring a little extra income into your home, provided you have followed the above parameters and made sure that the interest paid and the annual fees do not cancel your bonus rewards. Consider using a reimbursement card in cash for your monthly purchases as a step to move toward your financial independence process.