When credit card customers make purchases via their cards, cash-back credit cards reward them with bonuses in dollars or points. Cashback rewards function on a percentage basis. For instance, if the client purchases $100, he will have $1,5 cash back if he owns a card with a purchase reward of 1,5%.
Cash backs can differ according to the type of purchase; furthermore, some credit cards may limit the number of cash backs during a specific period of time.
Cash Backs Can Come in Different Ways
Fixed-category cash backs are provided when spending on pre-defined categories like groceries, entertainment, traveling, etc.
Flat amount cash backs are stable rewards from every purchase. However, the percentage for flat amount cash backs can be relatively low.
Sometimes category-based credit cards can offer extra rewards in particular categories for a specific period of time.
How to Get the Highest Points for Cash Back
Anyone who wants to have the highest points as cash-back should follow some steps.
First of all, the client should have a good credit history. Of course, customers with poor credit scores also get rewarded, but the higher the credit scores, the more money you will get back.
If the customer pays his balance each month regularly, he ensures he will get back the maximum amount of rewards.
Shopping at the same stores makes the customers predictable. This can maximize the number of rewards and allow you to achieve more money.
Cash-Back Credit Card Fees
Generally, cash-back credit cards have annual fees ranging from $50 to $100 per year. The larger the payments, the more significant rewards you get from purchases. To see the balance between the fees and your purchase cost, calculate how much you spend and how much cash you get back. The payback reward is often high enough to offset the fee.
Be cautious with fees, as paying them back late may cancel out your rewards.
If you are traveling abroad or shopping online, you should consider foreign transaction fees as well. These are easy to miss. Besides, look for credit cards with low or no foreign transaction fees at all.
How to Cash Out Reward Points
There are different ways to cash out the points you have gained from your purchases. Here they are:
>Sending a direct deposit to your bank account
>Transferring points to your credit card balance
>Exchanging them with a gift card
>Donating to a charity
The Best Three Cash-Back Credit Cards for 2021
Chase Freedom Unlimited
“Earn $200 cash back after you spend $500 on purchases in the first three months from account opening.”
Chase Freedom Unlimited is available for those who are not product users and have not received a new cardmember bonus for this card in the past two years.
Double Cash Back
“Double what you love!”
With Double Cash, you can earn 2% cashback on purchases: 1% when you buy 1% as you pay. That is double cashback on what you love with no categories, caps, or annual fee.
Discover It Cash Back
“It’s easy to apply. Apply in minutes with our easy application process.”
You get 5% cash back on up to $1,500 in spending per quarter in categories that you activate, and unlike other cards, the 5% categories include places where a lot of people spend a lot of money.
Read More about types of credit cards here .