Cashback credit cards
Cash-back credit cards are a type of credit card that rewards you with a percentage of your spending back in cash. This can be a great way to save money on your everyday purchases, or to earn money towards a larger goal.
There are many different cashback credit cards on the market, so it’s important to compare them before you choose one. Some factors to consider include the cashback rate, the annual fee, and any other rewards or benefits that the card offers.
How cashback credit cards work
Cashback credit cards work by giving you a percentage of your spending back in cash. This cash can be deposited into your bank account, used to pay your credit card bill, or redeemed for gift cards.
The cashback rate is the percentage of your spending that you’ll earn back in cash. Cashback rates typically range from 1% to 5%, but there are some cards that offer higher rates.
Types of cashback credit cards
There are two main types of cashback credit cards: flat-rate and rotating-category.
- Flat-rate cashback cards offer the same cashback rate on all purchases. This is a good option if you don’t have a lot of spending in any one category.
- Rotating-category cashback cards offer a higher cashback rate on certain categories of spending each quarter. This can be a good option if you have a lot of spending in specific categories, such as gas or groceries.
Benefits of cashback credit cards
There are many benefits to using cashback credit cards, including:
- Earn money back on your spending
- Save money on your everyday purchases
- Earn rewards towards a larger goal
- Build your credit history
Drawbacks of cashback credit cards
There are a few drawbacks to using cashback credit cards, including:
- Annual fees
- Interest rates
- Cashback limits
How to choose a cashback credit card
When choosing a cashback credit card, it’s important to consider your spending habits and your financial goals. Here are a few tips to help you choose the right card:
- Compare cashback rates
- Consider the annual fee
- Look for other rewards and benefits
- Read the fine print
Cashback credit cards can be a great way to save money on your everyday purchases or earn money towards a larger goal. However, it’s important to compare cards and choose one that fits your spending habits and financial goals.