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Cash Back Credit Cards - Compare & Apply

By Joe Taylor Jr.

Retail industry lobbyists claim that banks charge too much for processing credit cards at checkout. In sometimes heated debate, they say they'd rather give the 2-3 percent interchange fee right back to their customers. It sounds unbelievable, but you can get most of those charges back without waiting for government intervention. Our page outlines some of the best credit card reward programs, so you can learn how to turn your everyday purchases into extra cash.

Ins and outs of cash back credit cards

Instead of tracking points or converting miles, cash back credit cards offer a simple proposition. Spend a few dollars, get a few pennies back. Researchers have learned that consumers respond more positively to cash rebates and bonuses than any other kind of credit card promotion. Just watch out for the catch: higher than average APRs lurk behind big rebate offers. Carry a balance on your card, and finance charges can eat away at the annual value of your rewards.

Features of cash back credit cards

The best credit card reward programs include one or more of these features, all designed to focus your entire household's spending through a single card:
Everyday rewards. Nearly every cash back credit card sets a minimum reward level, usually 1 percent of every dollar spent. With a higher credit score, you could earn even better offers from competing banks.
Category purchase bonuses. Lenders love to encourage more everyday spending on credit cards, so you'll find plenty of offers that double or triple rebates on certain kinds of purchases. Depending on your card, bonus categories could include "pay at the pump" transactions or purchases made at grocery stores.
Partner purchase bonuses. Banks often market other companies' products and services using bonus reward offers. Many credit card issuers run online malls where shoppers can get extra cash back for buying brand name goods and booking travel plans.
Seasonal bonuses. A few of the best credit card reward programs offer special incentives on categories that change throughout the year. For instance, you might get a 5 percent rebate on airfare in January, and a similar reward on back-to-school clothing in July.

Most cards in this category feature extended warranty coverage on major purchases, comprehensive rental car insurance, and enhanced fraud prevention. Instead of using a debit card that potentially puts your checking account balance at risk, a cash back credit card can increase your security and your savings.

What to watch for when comparing cash back rewards cards

Not all cash back reward programs work the same way. Some pay more in rewards, but make you wait up to a year to claim your rebate check. Others streamline the process, but include a few catches. When comparing credit cards, pay attention to these details in each offer's terms and conditions:

  • Opt-in rewards. Some seasonal bonuses and other special rewards require a little extra effort on your part. You may have to visit your credit card's website or Facebook page to unlock special offers. Otherwise, they'll never show up in your rewards balance.
  • Spending caps. A few cash back cards put a huge rebate percentage at the center of their offers, only to hide details of their spending caps deep in the fine print. The best credit card reward programs don't limit the amount you can earn in rebates.
  • Redemption programs. Some reward programs credit your statement automatically when your rebate hits a threshold as low as $25. Other programs make you redeem points or cash in vouchers at partner retailers. Balance your earning potential with your ability to wait out a reward payment.
  • Penalties and reward cancellations. With some lenders, a missed minimum payment or an over limit transaction could force you to forfeit your accrued rewards. Check the cardholder agreement to find out what happens if your account triggers a penalty.

Some reward credit card users like to save their rebates for holiday shopping or travel, while others stockpile their bonuses for a rainy day. No matter what you think you'll do with your rewards, use the comparison tools on this page to see which of the best credit card reward programs may be right for you.

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