Credit Cards | How Cashback Credit Cards are saving your money and can also keep you in the Loop of Debt

Credit Cards | How Cashback Credit Cards are saving your money and can also keep you in the Loop of Debt

Cash Rewards, Advantages: Saving cash on every purchase, Annual fees, Shopping Perks, Disadvantage: Late, and missed payments, Foreign transaction fees

Credit cardholders are introducing better strategies to offer better rewards that consumers are taking this privilege to proliferate their competitive market to earn points, miles, and cash back just for swiping.

What is Cashback Credit Cards?

Cashback credit cards pay back some percentage of what customers spend. The typical rates are between 1 and 2% for purchases. For instance, the card has a 1% cashback rate, the cashback amount will be $0.01 for every dollar and earn $10 for every $1,000.Different Credit Cashback cards come with different benefits and a good card can boost your cover expenses, build credit, or even grow your savings. Cash-back credit cards can be a helping hand for simplifying your finances, earn rewards on daily spending on household or shopping.

Since cash-back rewards are basically easier to understand than travel rewards, a cash-back card is a better option for a first rewards credit card. But cash-back credit cards have both sides: Upsides and Downsides. Depending on your expenditure, another type of card might offer better rewards or save you more money over the long haul.

Cash Rewards:

Every credit card has different schemes for earning, but they offer the same advantage of all: you will earn cashback for each dollar you spend, which means your card issuer will give you back a small percentage.

The cashback you earned is calculated as a percentage of your total spending. Percentages vary but typically range from 0.5% to 2%. Some card issuers pay higher rates of up to 5% for purchases in some categories (e.g. gas or groceries) or made through certain retailers.

The percentage varies with companies but normally it ranges from 0.5% to 2%. Some card issuers pay higher rates up to 5% for purchases in some categories. For instance, gas or groceries or made through certain retailers.

Advantages of Cashback Credit Cards:

Saving cash on every Purchase:

The big perks of a cashback credit card are: you make a small saving on every item you buy. In most cases, all these redeem cashback are added together and returned to you in a single annual payment. If you spend, $20,000 a year, you can collect $1,000 a year in rebates, the amount is different with companies’ policies.

Annual fees:

Most companies are not taking up the annual fees on the cash back credit cards. That means you won’t sacrifice your rewards even if you keep the card open and started using different cards. But, few cash back credit cards do charge annual fees, so after shifting to another card, make sure you complete the rewards.

Shopping Perks:

Some cashback credit cards offer advantages that can relieve you from various bulky purchases or save you money.  These include the perks such as the lowest advertised price match, extended warranties, return guarantees, cell phone protection, and more. But not all cards offer these features, so make sure you check the details first!

Disadvantages of Cashback Credit Cards:

Talking about the pitfalls of cashback credit cards, many companies will give you a bubble of the attractive looking scheme which offer low interest rates on the transferred balance for up to 12 months, but the main purpose is to keep you in debt for a longer period as well as spending on it just to get the "Cashback"

Late and missed payments:

If you miss a payment for some reason, it is gonna reflect on your credit report. But one random 30-day late payment isn’t gonna affect, but a pattern of late or missed payments certainly will! And the bad credit loan will prevent and hamper you to get the best possible loans in the future, and if you get approved it would gonna lead to higher interest rates.

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Foreign transaction fees:

If you traveling somewhere out of your country, but once you land there, make sure beforehand that the cashback credit card does not charge a foreign transaction fee which commonly costs as much as 3% of the transaction price.

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