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Want a Cash Back Credit Card? Review These Important Considerations

April 11, 2012 | Comments: 0 | Views: 135

Who doesn't want to receive cash back for the items you currently purchase? Everyone these days could use a little extra money lining their pockets, and cash back credit cards are promoted as one way of accomplishing this. That being said, exactly what makes for the right rewards credit card is different for everyone. However, there are factors that anyone applying for one of these cards should consider. Here are the elements you should think about when looking to get the best cash rebate card for you.

1. What Kind of Credit Score Do You Need?

Prior to starting any kind of quest for a new credit card, it's vital to know your credit score with each of the three bureaus, to ensure that you are qualified to apply for the card you want. Most cash back rewards cards require good to excellent credit to get approval as well as the best rates.

2. Compare the Rewards Offered

When comparing cards it's a great idea to create a spreadsheet detailing elements of each card. You'll need to read through the terms and conditions closely in order to accurately understand the benefits (and costs) of each card.

3. Are You Willing to Pay an Annual Fee?

Thankfully, a number of cash back cards don't require a yearly fee. That isn't to state they do not include various service fees (analyzing all the conditions and terms is fairly necessary), although some of the additional costs can be easy to avoid, whilst a year by year cost typically will not be. To paraphrase, virtually any yearly charge definitely will minimize the returns you will get back. Quite a few cards deliver additional bonuses to offset the once-a-year charge, but the majority won't include an amount which 100% makes up for the charge.

4. Specialized Promotional Benefits

Generally everyone knows that it is not recommended to keep a balance on a rewards card, since the monthly interest is going to reduce your current bonuses each monthly. This is especially significant in the event you select a bank card that requires you to meet a minimum spending tier in order to generate the best points return. Many of the most aggressive cash back cards advertise zero percent APRs for 6-15 months, making it possible for the cardholder to lower their debt. But this should only be considered if you know you can off the entire balance before the promo rate ends.

5. What's the post-intro APR?

The last few years we've seen credit card interest rates fluctuate between 5-15 percent. Currently we're back in 8 percent territory, so there are some very good deals to be had. Unfortunately many rewards cards aren't offering the best ongoing rates at this time, in part because there's plenty of demand even with higher rates. And remember that this is moot if you pay off balances in full each month.

6. How to Redeem Your Rewards

Lastly, before opting for any card you need to figure out what the process for redeeming points is (specifically how easy or difficult the process is). And look out for surprises in the fine print: for example, some cash back programs require you to use some of your points in order to redeem them for actual cash. And redeeming points for cash may not offer you the most bang for your buck, as many banks offer a better exchange rate on gift certificates and credits to your bill.

For more financial topics related to this subject, including credit cards, credit reports, and personal finance, visit our website.

Source: EzineArticles
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