Cash Back Credit Card

The cash back credit card is the "in" promotional tool being used by just about every credit card company on the market, and while everyone likes to receive what appears to be "something for nothing," it does have a price. There seems to be a trend with cash back credit cards toward rewarding folks who use these accounts to buy groceries, medicines, and gasoline. The general offer is 5% for supermarkets, drug stores, and gas stations, and 1% on other purchases.

One company offers a refund check of $25.00 upon the accumulation of 2500 points. At the rate of one point per dollar spent, one would have to spend $2,500.00 to get $25.00 back. Most grocery stores now have the ability to accept this form of payment, which has caused a rise in grocery prices because of the expensive equipment and services that go along with it, so the cash back credit cards are appealing to those people who regularly charge their groceries anyway.

Offers provided through the various cash back credit card companies will differ, so it is important for the consumer to read all the contract terms carefully. For some offers through a cash back credit card company, only so many points can be accumulated in a year, and few of them give points for balance transfers or cash advances. Because of the high cost of the rewards programs to the companies, many of them charge an annual membership fee to help recover those costs. Some of these cash back credit cards offer merchandise for the points earned for the cost of shipping and handling. The rising cost of gasoline has made the companies that offer incentives for purchases more appealing.

On the surface, cash back credit cards may seem like helpful ways to save money, but upon reading the requirements they may not be so attractive. These programs are designed to give very little for a great deal of spending. The one cash back credit card company that does offer cash back on balance transfers does so on a minimum balance of $1,500 on each account transferred, and there are limits to how many of those will count. Another company allows so many points per year, and then the customer has to contact the company at an address or telephone number buried in the fine print of the contract to receive a refund check. Before signing up for a program like this, the consumer should read all fine print and understand the terms and conditions. On the surface it may sound like a great way to save money and gain rewards, but usually these offers are merely advertising schemes to attract consumers. A consumer must be sure to use discretion when making financial decisions. "Discretion shall preserve thee, understanding shall keep thee." (Proverbs 2:11)

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