Credit cards have been subject to a lot of bad press in recent years as consumers struggle with high account balances and barely manageable monthly payments. It doesn't help either that the banks charge much more interest to their customers than it costs for them to borrow money. However, other people who have successfully used their credit cards responsibly have benefited tremendously. One of the most popular benefits that consumers can enjoy by using credit cards regularly stems from cashback credit cards. These cards basically pay you to spend; where you get a percentage of your spend back in the form of cash!
So how can you make money from cashback credit cards?
Shop For the Best Credit Card Offers
There are numerous credit card offers available to choose from on the market, including cashback credit card offers. The best offers are those that have attractive features and a lucrative cashback rewards programs. You can opt for a credit card that provides you with cash or gift cards that can be used at specific stores. Other credit cards will mail you a check with your cashback program proceeds, or the proceeds may be applied to your account balance. To make this easier you can use a credit card comparison website to easily compare different offers available.
Consider Program LimitationsThe amount of cash you can earn for your purchases will vary from credit card to credit card. Some cards offer only a very limited amount of cash proceeds while others provide you with a rewards program that gives you greater earning potential with your purchases. Further, some limit the amount of cash you can receive from the rewards program.
Review Credit Card FeesYou also want to review credit card fees before applying. Some credit card accounts have annual fees, and these fees can quickly negate the benefits of a cashback rewards program. Other credit card accounts feature more stringent payment terms, and they may charge you a late fee if your payment is received even a few days late. These costs of owning a cashback rewards program may reduce the total profits you can enjoy by using your card.
Pay Balances Off in Full Each MonthIn order to make the most money off your purchases, you do want to use your card regularly. You may consider using it for purchases on groceries, fuel, and other items you planned to purchase anyway. Paying your credit card balance off in full each month is absolutely critical if you want to avoid interest charges. Interest charges, as with late fees and annual fees, will greatly reduce the profits you earn from your cashback rewards card. So you should only charge only amounts that you are able to pay off each month.
It is often a bad idea to use a credit card to make large purchases that will take several months to pay off with your credit card, even if that item has been discounted. While you will enjoy cashback rewards from the purchase, you will also have to pay interest on the balance - and at 20% APR or more, this will quickly add up.
Where to Find Them!Finding a cashback card that suits your spending profile shouldn't be too difficult as there are many to choose from on the market. Santander's current offer, which you may have seen on TV, is an extremely competitive deal with tiered cashback available on purchases from supermarkets, petrol stations, utilities, etc. The American Express Platinum Cashback card is another worth taking a look at. This card gives you 5% cashback on your first £2,000 of purchases, which drops to an ongoing rate of 1.25%.
How to Get Even More Bang for Your BuckAs if getting money back on your purchases wasn't enough, there are cashback websites that you can sign up for and get cashback on your purchases made through them. These cashback websites let you save money on everything from flights and hotels to white goods and homeware. How they work is fairly straight forward.
These websites get paid by the merchant for every sale they refer and they pass on a percentage of their referral fee on to you. In other words, if you use a cashback card in association with one of these websites, you could consistently be getting 3-5% back (depending on your card and the product you're buying).
Making money with a cashback rewards card is easy if you keep in mind the costs associated with using the card, and when you find a card that does not limit your cashback benefits.
The Complete Guide to Using Cashback Credit Cards - FinanceChoices.co.uk
Beginner's guide to: Cashback credit cards - Independent.co.uk