Cash back rewards credit cards are one of several types of credit cards to choose from, but whether they’re the ideal choice for you depends on your situation. Let’s take a deeper look at cash back cards and what aspects of a card you should look at before deciding if it’s the right one for you.
What is a cash back credit card?
Cash back credit cards are a type of rewards credit card that offers cash rewards on qualifying purchases.
The way a cash back credit card works will depend on the card. Some cards, for example, may allow users to earn cash back through a flat rate on all qualifying purchases, and some may offer an additional percentage of cash back on specific spending categories. Additionally, different cards may allow you to redeem your cash back in different ways. While many cards give you the option of depositing your cash back directly into your bank account, some cards may also allow you to redeem the cash back for a statement credit, check, or gift cards.
What should you know about your cash back card?
How much will you get paid, when, and for what? It all depends. Here are the key details to look at when weighing different cash back credit cards:
- If it's a percentage, does it vary based on what you're buying or where you're shopping?
- Is there an annual cap on how much you can get back?
- How often will you get your cash back? Some cards may allow you to redeem your cash back earnings right away, while others allow you to redeem less frequently, or when the amount hits a predetermined level.
- In what form can you redeem your cash back? A direct deposit check? A check? A statement credit? This isn't a major consideration for some, but it's good to know what to expect and some cards offer multiple redemption options.
- What bonuses, if any, does the card credit offer? For instance, some pay a cash back bonus when you open the card account, provided you spend a certain amount within a specified period of time.
- Does the card charge an annual fee? If it does, it may not be a deal breaker, however. If the card pays the highest percentage back on supermarket purchases, and you're a family of six, the payback on your weekly grocery hauls may make the annual fee a non-issue.
- Are there expiration or forfeit terms? There could be a specified number of months to redeem the cash back before it expires, or something else, like not earning cash back on purchases until a missed minimum payment is paid.
Doing your homework pays off: get more for your money
There's no way around spending a bit of time to research your options, but it's time well spent. Landing the right cash back credit card to suit your lifestyle and buying habits can pay off off in the long run, so make sure to do your research and find the right cash back card for you.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.