There are various credit cards to choose from, each with different rewards. Ach back credit cards are, however, the easiest to earn from. They are a perfect way to ensure buyers get money for their purchases over time.
Here is a guide with everything to know for buyers who want to take cashback from a credit card or have one and don’t know how it works.
What Are Cashback Cards?
Unlike other credit cards that give buyers rewards in terms of points after shopping, cashback credit cards give them a certain percentage of the money they spend each time. Over time, the money will have accumulated enough for them to use in different ways.
Credit cards have different percentage cash backs, which work differently, which buyers should consider before taking your card. The most common types of cashback credit cards are:
These credit cards give you similar cash back percentages for every qualifying purchase, whether online or in physical stores. Many people choose this cash back card because it’s simple, and they don’t have to worry about the credit card they use or where they shop.
Bonus cash back cards
These credit cards give buyers higher cash back percentages on specific goods categories, mostly travel and electronics. The percentages are sometimes two or three times the other cashback rates.
These are the best cards for buyers who want to accumulate cash back faster. However, they must track where they use the cards and what they buy for the higher cashback rates.
Rotating cash back cards
These are more complicated than the other 2 cash back card. They offer a higher a cashback percentage on specific purchases like bonus cashback cards. However, the categories change mainly every three months, after which the cardholder should activate the rotating bonus categories to get the high rewards. Goods and services that are not in that category have flat-rate cash backs.
While some cards change the categories automatically, some allow cardholders to choose the categories they want to get higher rewards.
How to Redeem Cash Back Rewards
How buyers redeem their credit cards depends on the credit card company. According to experts at SoFi, “You will be able to review and accept Terms & Cardholder Agreement during application flow.” Some common ways card holders can redeem their cash backs include:
- Statement credit- this is one of the easiest ways to redeem the cash back. This allows cardholders to redeem their rewards and reduce their credit card bills.
- Direct deposit or paper check- For this, the cardholder logs into the credit card company’s website, where they can redeem their cash back directly into their savings or checking account. Alternatively, they can choose a paper check that the credit card company mails after some time.
- Gift cards- This is when the cardholder gets a gift card for their favorite brands, restaurants, or stores.
- Other- Some card issuers allow their cardholders to redeem their reward to pay for part or their entire shopping or donate the rewards to charities of their choice.
Before choosing a cashback credit card issuer, buyers need to compare different issuers and determine their cashback rates, redeeming options, annual fees, interest rates, and how they will affect their credit history and score.