Credit Card Cashbacks

Credit card companies try hard to get you to use their credit card over the one you are currently using. Remember, however, that when you open up a new credit card your credit score drops, so you want to only open up a new credit card if you are sure it is one that you want and can use, so that you do not have to open up another one in the near future.

One of the things to look for is the benefits that the credit cards offer. One of those benefits that has recently gained popularity that you should sincerely look into is that of the cash back rewards programs.

Credit Card Cash Back Programs
Many cards offer a cash back bonus of .5% to 2% of what you spent using the card. In other words, if you spend £500 on the card, you get £10.00 back on a 2% rewards card regardless of what you purchased.

While this may not sound like a lot of money, it actually can build up to a high amount over time. That is because many people make all of their purchases on their cash back card and then pay the card back immediately every month. This is actually a very good practice - it builds credit, it gives you cash back on money that you would have spent anyway, and it keeps you in good spending habits. It is a risky practice if you are the type of person that occasionally gets lazy (because the interest rate may be more than the amount you get in cash back over a year) but if you believe you can keep yourself in line, it is not a bad idea.

It is said that every person should have two credit cards . It is a good idea to make one of those credit cards a cash back rewards card.

What Not To Do
As mentioned previously, however, you do not want to be spending a lot on the card if you are not going to pay it back right away, because the interest is going to be more than the amount you earned in cash back. Even if you do pay it back, however, there are a few things to look out for:

- First, make sure that the cash back you get comes in some form that is easy to handle, like a check you can deposit or a credit against your credit card. Some companies have clauses and rules that make it very hard to get the money you earned.

- Second, without good reason, don't get a credit card that has an annual fee. Very few credit cards still have annual fees, and if your annual fee is, say, £50, you have to spend over £2,500 on that card just to make up for the annual fee, and that is if you have a very high cash back rate (on a lower cash back rate, you would have to spend over £10,000).


 - Finally, get a cash back card that has a good percentage back rate. There are .5% cards, but there are also 2% cards with 5% on groceries. Shop around first and do not just trust that the first company to send you the offer is the best you can get.

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