Credit Cards Giving You Cash
Credit cards, even low interest credit cards, often offer rewards like air miles, dining vouchers and gifts like LCD TV. The types of rewards that credit card issuers offers are plenty, but more recent, cash rebates are becoming even very popular. This is because most people prefers to get cash back over the usual rewards, which may not always be what they want.
For a lot of people, receiving cash is way better than air miles or even a brand new LCD TV. Think about it, cash offers you the flexibility of buying anything you want and not be limited to only what the banks can offer. This can also be thought of as a reduction of the purchased item's price.
Higher Fees and Higher APR
Normally, these types of credit cards requires higher fees and APR. You don't want to have a high balance on these cards at any time, as it normally end up very costly. If you can off your balance at the end of the month, then your APR won't affect you. Paying off your bill will also allow you to take full advantage of the cash rebate reward without worrying about the interest rates.
The percentage of cash back varies between 1% to 5% being applied with certain purchases. For every purchase you make using your cash rebate credit card, you'll get a small amount of cash back. Using your credit card on a frequent basis will give you a lot of cash back.
Getting Cash Back for Your Next Large Purchases
When you make large purchase, you will likely be getting a sizable cash back on your credit card. However you should check your terms and conditions before you use that card. This is because many such cards have a limit on the monthly cash rebates and you may be better off with using a high rewards, low interest credit card. But if your card is one that offers cash rebates without limit, it will definitely help in lowering the price of that large diamond you are dreaming off.
Interest Rates versus Cash Rebates
Remember. The better the cash rebates, the higher the interest rates or APR will be. Interest rates is where the banks make their money. If you make large purchases thinking that the cash rebates will help to offset the interest rates, you would be in for a rude surprise. Never use a cash rebate credit card to help with your cash flow problems, the high interest rates can compound fast.
Always research the rebate credit cards and find out what are the other features and terms. There are many credit cards that actually offers a competitive APR, due to the competition between banks. You should compare all such cards and then decide which is the one for you. If you are the discipline sort who pays your monthly balances on time, a higher cash rebates can be suitable for you.
Jared is a researcher who writes for a finance blog at Low Interest Credit Cards. He advises clients on their financial matters and wealth management.
Source: http://ezinearticles.com/
Added: May 1, 2008
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