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Cash Back Credit Cards
Earning money on purchases can be accomplished by using a cash back credit card. These offers, commonly referred to as cash back rewards cards, were made popular initially by Discover. The basic premise is that for every dollar spent will give you a percentage back which usually ranges from 1% to 5%. As this particular incentive program has evolved, so has the structure. In the early stages, when you made purchases you would get a straight amount back, regardless of the purchase. Now, with more sophisticated tracking in conjunction with online management tools, many issuers have beefed up their rebate structures to the point where you may earn more at certain locations. Some cards let you set places where you spend the most to maximize your earnings. Others run revolving promotional incentivized periods.
Best Cash Back Credit Card
Figuring out where you spend the most money is a great first step in determining the best cash back credit card. This will allow you to select an offer that dedicates the bulk of savings to where you spend the most and can be used as a method of arbitrage. Because there are cards that weigh rebates heavily on custom shopping, identification of this allows you to maximize your return. A prime example of this is some gas cash back cards. For those who have a long commute or a vehicle that isn't the most fuel-efficient, earnings of up to 5% cash back on gas is good for their finances, especially if they fill up their tanks multiple times a month. To use a few figures as an example, let's say that a person fills up their car frequently and spends close to $200 monthly on fuel. With a 5% rebate offer, they would earn about $10/month, which results in $120 annually. Typically, non-specific fuel cards, meaning those that allow you to earn money at any station are preferred and they also may allow you to earn a percentage from purchases made at all other types of retailers.
The above example touches on how you can save money at gas stations with cash back credit card offers. It's a fairly straight-forward rebate strategy coupled with a very clear-cut rewards program. For those who want to get a little bit more involved with your cash back card, there are ways to potentially earn more money on purchases that you make with frequency. To implement this, you will need to be very organized and find the right type of plastic. First you will need to find and compare cash back credit cards that come with customizable earnings structures. This means that you may either set the card up to give you a higher percentage at specific locations like drugstores, grocery stores, gas stations, officie supply retailers, etc. These come with either the option to set it for the life of the account, meaning it never changes, or allows you to switch on a quarterly, semi-yearly, yearly, or in some cases (though very rare) monthly basis.
Once you have obtained this rewards card, you would then need to examine your spending structure over the course of a year. You may do this easily if you use another card for most of your spending or if you bank with a large issuer the online banking platforms sometimes allow you to classify spend by type and easily download into common accounting software programs or a spreadsheet file. Once you have isolated the places where you make the most purchases, figure out if the card's rewards program has those as options to put the larger percentage values on those types of places.
The best plan of action with any type of rewards offer is to use your card as an alternative form of payment whenever possible. Stop using cash altogether as it serves no real benefit. Make every purchase with your new cash back rewards card and you may be surprised at the amount of earnings accrued over the course of the year. When you compare cash back offers and if you find that the rewards programs are almost identical, you should select the one, just as you would with any loan, with the lowest interest rates. Ultimately, this will be the best cash back credit card as rebates are only half of the equation and should be treated with lesser importance. Though you may earn up to 5%, you will not find pricing that is equal to or lower than that.
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