A cash back credit card will give you the chance to earn as you spend. A percentage is returned to you on an annual basis for every pound that you have spent. This is usually set at between 0.5% and 2% depending on how generous the credit card lender is. And as I have said already and I cannot stress enough is you should be able to pay off your credit card statement in full each month as is the only way that a cash back credit card will work for you.
A cash back credit card is not for everyone…
If you are a borrower then a cash back credit card will only cost you, even though you will be earning a little back, you will find that this will be eaten up and more by the interest charges, which are usually on a higher scale of APR.
By not incurring the interest payments, then every pound that you spend on the card will see a little winging it’s way back to you and if you do pay your credit card bill off in full and never have worries about doing so, then why not switch to a cash back credit card. If you don’t already have one, there are only a few ways in which you can get money from a credit card lender, rather than the many ways in which they abstract cash from us.
Do not transfer any balances…
There is a word of warning that will come with this though, if you decide that you want to balance transfer an amount from your existing credit card company on to a cash back credit card, then you should try and avoid this, in fact avoid it altogether. As any payments you make to the credit card will only go on to pay the amount transferred and interest will mount up on any purchases that you have made on the credit card, which will leave you paying back more than the cash back card is making you.
There are a few good deals on the go right now, with the Amex Blue cash back card the Amex Platinum and the First Trust Bank cards worthy at a look if you decide that a cash back credit card is for you.
Remember…
1) Pay off your balance every month
2) Cash backs are repaid annually
3) Avoid transferring a balance to your cash back card
So if you have a clear statement at the end of each month then go for it and make that bargain in the sales save you even more cash.
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