Using Cash-Back Credit Cards To Your Advantage

Cash back credit cards are one of the most popular rewards cards for a simple reason - they’re pretty straightforward to use. Every time you use your credit card, you earn certain percentages of it back. No counting miles for flights and no fiddling with points to find gifts, just money.

When They Are Good

A cash back credit card is great to have when you don’t keep large balances month to month. That’s because rebate cards often come with high annual fees and finance charges for the privilege, which can easily offset any earnings you incur.

If you like keeping a balance floating in your statement, it’s best to find lower-interest offers instead. While you won’t get any cash back, you’ll probably still end up saving more money in the end.

Balance Required

Some rewards cards that offer rebates will give you higher cash back percentages if you carry balances month to month. Sounds like someone trying to get you into serious debt? Yes, it does, doesn’t it?

Anytime a credit card offers you something like this, consider it a red flag. Even if you can’t work out the computations, the most likely result is that any additional reward you earn will cost you more in charges and fees over the long haul. Otherwise, why would they encourage such an undesirable use of credit?