Many credit cards come with built in rewards programs. Generally these credit card rewards programs offer a percentage back on every purchase in the form of points and in the case of cash rebate cards; cash back. Cash rebate cards are more commonly called cash back credit cards and fall under the area of rewards credit cards.
Most cash rebate credit cards like their rewards point counterparts give the holder around 1% cash rebate on all purchases made with the credit card. 1% is the most common percentage with some cards offering tiered earning levels or higher percentages back for certain purchases. Many of these rewards rebate cards offer access to exclusive bonus shopping sites. These sites link the cardholder to special links for many kinds of merchants through which they can get special deals and often a higher percentage of cash back on purchases done through the special link.
Bonus shopping websites aside, most cash rebate cards offer a flat 1 percent back on all purchases with some purchases falling under bonus categories that are usually eligible for between 2-5% back on those purchases. Cards such as American Express Blue offer the users up to 5% back on certain purchases with 1%-2% back on all other purchases. The catch with this offer is that the user must spend a certain amount, generally around 6,000 dollars a year on the card before the 5% kicks in.
Discover cards offer cardholders a tiered cash back/points program. After spending 2,500 dollars in a year, they move from 0.25% to 0.50% back. Once they reach the next level it moves to 1% and so forth. Many high spenders benefit from this program as they easily reach the higher tiers over 2%. These numbers can always vary though. Blue from American Express and Discover CashBack cards are two examples of tiered cash back earnings programs.
Chase offers a card called Chase Freedom which offers a great example of ideal cash back card for low to moderate card users; even higher spending users may enjoy it. Cardholders earn 1% back from the first penny spent and earn 3% back (up to 600 dollar in spending per month) on their top 3 spending areas out of a possible 15 for that billing cycle.
Most of these programs offer the earlier mentioned bonus sites where cardholders can shop through special links that boost cash back percentages on those purchases anywhere from 2% to 20% back. Also many cash rebate cards offer new cardholders a check for around 50 dollars after the first purchase and may also allow those who are patient to build up cash back points to reach a certain amount redeemable for more than it was originally worth.
Another form of cash rebate cards that are becoming popular includes specialty cards designed to give ‘rebates’ on something particular. Some card companies offer deals with mortgage companies; all the points earned become rebates sent to the person’s mortgage company as payment for their mortgage. Upromise, a college savings site teamed up with Citi to offer a rebate program that places cash back earned into 529 plans. Home improvement rebate cards are popular too, with many offering rebates for places like Home Depot. Most cash rebate credit cards or cash back credit cards involve getting cash or a rebate check towards something, rather than cashing in points for a product or service (such as popular airline miles credit card programs).
Cash rebate and cash back credit cards are great in that they give flexibility in how to earn and redeem the rewards. Cash is the ultimate reward because it can be used for whatever one wishes to use it for, comes with few if any restrictions, and isn’t going to expire once redeemed.
If you are considering cash back rebate card consider one that fits your needs and one that is likely to net you the most cash back for your level and kind of spending. Keep in mind that interest rates on any rewards credit cards are often higher than other credit cards so paying in full each month is really the only way to ensure you are benefiting from having the rewards credit card. Avoiding interest and fees by paying in full and on time every time will maximize the amount of cash back in your pocket.
