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How Do Cashback Credit Cards Work?
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The cashback credit cards system is approximately a 15 years old program.
If you purchase everything you buy with your credit card, the program gives you various rewards-
one being cold hard cash.Different credit cards, however, offer different rewards.
So just how does this program work?
Usually, for every dollar you spend, you accumulate points.
Most banks offer 1% of the total you spend. So, if you spend $1000, your amount will be $10 and so on.
Once your point level reaches a certain amount, you are able to choose from a wide variety of gifts or just opt for the cash.
If you go for the cash, most banks give you the option of just transferring the cash reward right into your bank account,
sending you a check in the mail or applying it to your balance on your credit card. If you you’d rather choose another reward, the choices are vast.
For example, you could choose from a large selection of gift cards. The selection many banks offer is huge with choices
ranging from Applebee’s to Zappos. Just browse on the bank’s website to choose the card you want and exchange your points for
the card of your choice.
You could also use your points to shop at Amazon.com. Use your points to completely pay for an item at Amazon’s website or you could use
a combination of your points along with your credit card if you don’t have enough points.
In order to use your points for the item, you must access Amazon through your bank’s website. Just go to the reward’s section on your bank’s site and you should be able to choose Amazon as one of the rewards options.
Many cashback credit cards companies even have a great selection of merchandise right on their site as one of their rewards options.
You can browse through their store and purchase an item with the points you have earned.
If you purchase an item through the bank’s website, you could earn extra points as opposed to buying that item from a different website.
Looking to save money on traveling? Set a goal and save up those points for airfare, a hotel or cruise. Many people have saved a ton on
travel just by using their cashback credit cards rewards program.
Keep in mind that some banks set a limit on every cashback credit cards
accrual for the year.
For instance, no more than$2000 may be earned within a year. And most often your payment
cannot be received unless a certain amount has accumulated.
What to watch for:
Some cards give a larger amount of cash back for a limited period of time, but their interest rate is also higher than others.
This will work to your advantage only if you are able to pay off the balance each month.
The annual fees on every cash back credit card
are different.
The annual fees can be combined with penalties, fees, and interest charges.
When choosing a good cash back credit card, be sure to choose one that offers low annual fees to make the rewards worth it.
There are many great cashback credit cards out there to choose from. Be sure to choose one that suits your needs while also offering the best rates.
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