The Cash Back Credit Card That Is Right For You

The Cash Back Credit Card That Is Right For You

When comparing Cash-Back Credit Card, it often boils down to the card reward structure that’s applicable to you.

Depending on your spending culture, the type of cash-back card you choose might be dependent on how much you earn. If you are the type of consumer who uses the same card or two cards for all your spendings, you might not get that much value from the card, which rewards certain types of purchases more than others. On the other hand, if love getting a great deal from things, a large cash-back can be a motivation to have particular cards for expenses.

However, when making a decision on getting a cash-back card, try checking the pros and cons of the card, this is also as important as knowing how the rewards are structured. Some cash-back cards waive off annual fees either on the first year or as an ongoing benefit or give a 0% APR for as long as 15-18 months.

When you learn how to use a cash-back card, you can increase spendings and get more value from your reward card. Here are some of the types of card:

The Cash Back Credit Card That Is Right For YouThe Cash Back Credit Card That Is Right For You

 

Tiered Cash-Back Cards | The Cash Back Credit Card That Is Right For You

With a Tiered cash-back card, you receive a cash-back bonus of at least 2% to 3% for some particular types of purchases. For example, cards can offer 3% cash for gas and 2% cash back for groceries. Most tiered cards will allocate at least 1% of cash back for all other purchases.

A tiered card is ideal for cardholders who estimate a lot of expenses for several things. For example, if you often eat or have fun with friends every Friday, you can win a lot using a card that gives you 3% cash back for dining. Similarly, cash-back cards that offer high gasoline bonuses on long trips to work can help reduce your monthly gas bill that is for individuals who are commuters.

The disadvantage of tiered cards is that the potential earnings only increase if you don’t forget to use your card every time you buy something that earns a bigger bonus.

The Cash Back Credit Card That Is Right For You

Many tiered cards also have limits on the things you can win in cashback, especially if there are no annual fees. For example, your tiered card can offer 3% cash for gas purchases, but the higher rates only apply to $ 2,500 per first quarter spent on gas. If you spend more than $ 2,500, the rate will go down to the base level of 1%. The maximum you can earn with at higher rate is $ 75 per quarter.

Tiered cards are more rigid to other types of cash-back cards. If your spendings are unpredictable or your budget is relatively limited, you may receive less value of the tiered card.

However, some tiered card allows you to pick categories with higher bonuses to be earned. So, look for any card with customizable bonuses if you’re having a hard time picking a card that suits your spendings.

Flat Rate Cash-Back Cards | The Cash Back Credit Card That Is Right For You

Cards that offer the same amount of cash-back made on each purchase are often referred to as flat-rate credit cards. This type of card offers cash-back of 1.5%, 2% or more. You can easily earn unlimited cash-back rather than limiting the total reward of winnings you can earn in a quarter or one year. So, if you charge almost everything you spend on money, this feature can be very profitable.

Flat-rate Credit cards remain often highlighted because of their simplicity and are ideal for cardholders who don’t want to spend too much time thinking about prices or using the same card for everything. All you have to do is use your card and you will be rewarded with the same and predictable cash-back rate with whatever you buy.

With a Flat-rate card, you can easily estimate how much you will earn by. For example, if you expect to spend $ 1,500 a month on a Flat-rate card that generates 1.5% cash-back, you can count on earning $ 270 at the end of the year. You can also earn more money with a Flat-rate credit card if your spendings change drastically every month or if you have a more limited budget.

The disadvantage of a fixed card is the rate. Most do not award more than 2% of the cash back, while some tiered cards offer up to 5% or 6% for several categories. If you spend a decent amount in a certain category, you can leave money on the table by not using a tiered card.

However, if you have a tiered reward card, use flat rate cards for miscellaneous spendings.

Rotating Bonus Cards

Sometimes referred to as a 5% cash back card, this type of card offers a high cash bonus (usually 5%) for the shopping category that changes quarterly. For example, a quarter can cover 5% of all store purchases and another quarter for restaurant costs.

If you do not mind tracking bonus categories that change every three months, you can earn a lot of cash-back with this type of credit card. Your card issuer will most likely give you a calendar in advance with a rotating category, and you can even determine which trader will give you a higher reward rate, such as Amazon or Target. Categories can be very specific, moving from health clubs and drug stores being forwarded quarterly to airlines and car rentals.

The disadvantage of Cash-Back cards with rotating bonuses is that they tend to work more. For example, you often have to “activate” the new bonus category on the card every three months or lose a bonus. If you forget to register regularly, you may not be able to earn as much as you expect.

The Cash Back Credit Card That Is Right For You

Cash-Back cards with rotating usually also limits how much you can earn in a certain period of time. So, if you are a strong buyer in a certain category, you might need to pair the type of card with another type of card.

Plan ahead to increase your income with a 5% cash-back card. For example, waiting until Target gets a bonus for household goods inventory. If you don’t feel that you can spend a quarter to a maximum of one category, buy a gift card that you can use throughout the year.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.