How to choose a cash-back credit card

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Cash Back Credit Cards - A Boon In Disguise by : Vivekk Sharma

For those of you in the habit of paying your entire credit card bill each month you can avail the benefits of the cash back credit cards. The cash back credit card generally gives you a small percentage ranging from 0.5% to 2% of the amount spent. This money is paid either in the form of a cheque annually or it’s credited to your account. The usage of cash back credit cards has also meant an increasing number of people using credit cards for daily shopping of stuff like groceries and payment of monthly bills.

The amount of cash back varies from company to company. Certain credit card companies like Morgan Stanley offer up to 2% cash back bonus on the purchases. The other companies offering attractive cash back rates are American Express Blue - a cash back rate of 2% cash back for the first 3 months and 1% thereafter. American Express Platinum offers cash back of up to 2%. Online transactions are also easier with the cash back credit cards and there are certain cards such as Egg that provides cash back of 10% if you shop from certain online shops listed by the company.

Are the cash back credit cards for you?

Choose the credit card carefully, as there are many to fit the different specifications. A cash back credit card is of use to those who use it for purchases than maintaining a credit line from this account. Using a cash back credit card means that every time you use the card you are going to get a small percentage of the amount you spent.

In case you end up paying interest each time then cash back credit card won’t be the right option for you. In such a case it would be better to opt for a card offering low interest rates. Even if you want to just transfer the balance then don’t consider cash back credit card as you are going to find Balance Transfer Credit Card offering much lower rates of interest.

There are many companies that don’t offer cash back, instead they offer rewards like air points, hotel discounts, travel insurance or lower interest rates. In case you are a frequent flyer then probably a better option for you would be to go for a card offering these incentives, whereas for those people who pay their shopping bills regularly the best option is cash back credit card as you’ll get rebates on the amount.

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