| One of the most popular credit card reward | | | | putting money into your savings. |
| programs available today is the cash back credit | | | | If you can pay your balance off every month, |
| card. These will give you a cash rebate every | | | | and do not need a zero or low interest rate card, |
| time you make a purchase. The best cash | | | | cash back credit cards can work for you. Your |
| back credit cards appeal to many and would even | | | | cash back would even cover your interest |
| include no annual fees and a 0% interest APR for | | | | payments - let the poor money managers pay |
| up to 15 months. Imagine taking an instant | | | | you. If you do not pay your balance off, your |
| discount every time you make a purchase on | | | | rebate can go toward paying down your existing |
| your cash back credit cards. Depending on | | | | balance, so that less of that has to come out of |
| where you shop, those savings could add up to a | | | | your own pocket. Make sure that you read the |
| considerable sum. | | | | fine printings, because fees for late payment and |
| Cash Back | | | | going over the limit could be steep. |
| The most basic benefit from a cash back credit | | | | The first cash back credit card was issued about |
| card is your rebate from every purchase. Most | | | | 15 years ago. The program was very simple - |
| companies give a 1% rebate on all purchases. | | | | 1% of your purchases were rebated back to the |
| However, some programs will give up to a 5% | | | | customer at the end of each year of |
| rebate on such purchases as groceries, drug store | | | | membership by check, or by a credit to the |
| purchases, and especially gasoline. You have to | | | | account. |
| spend these amounts of money anyway, so why | | | | Now there are quite a few different types of |
| not get a rebate for it? However, there are | | | | cash back credit card programs. Some offer a |
| savings beyond what we have mentioned here. | | | | simple percentage on all purchases, some give a |
| Savings | | | | higher premium for different categories of |
| Here is an example. Let's say that, over a | | | | purchases. Some programs deposit your |
| month, you spend $500 at the grocery store, | | | | rebates directly into your bank account, while |
| $100 at the pharmacy, and $150 filling up your car | | | | others retracts it from your credit, or send you a |
| with gas. Your total spending during this month | | | | check once your rebate amount reaches a certain |
| would be $750. If you get 5% back for these | | | | dollar level. Pay attention to the more complex |
| sorts of purchases from your best cash back | | | | ones, as it can be confusing to track your rebates |
| credit card, you can save $37.50. If you had to | | | | by expenditure. |
| spend this much every month, you would have | | | | A cash back credit cards could not make you |
| saved $450. In other words, you've saved half | | | | wealthy - after all, you are only getting back an |
| of one month's expenses over the course of an | | | | infinitesimal amount of the money you spend, so |
| entire year, and just because you chose to | | | | this can never be a source of revenue. |
| benefit from a cash back credit card. | | | | However, since everyone has to spend money |
| $450 is pretty cool....but should I really switch? | | | | for everything from the necessities of life to the |
| You would not be able to notice the slight | | | | luxuries, it makes sense to maximize the return |
| difference of 1% or even a 5% on your cash | | | | on that spending as much as possible. Cash back |
| back credit card; but over a period, your cash | | | | credit cards give you a chance to earn back |
| back credit cards could actually make you | | | | some of the money you spend, and to put that |
| money... increasing your nest egg incrementally. | | | | money to use elsewhere in your financial picture. |
| In a way, every time you buy groceries, you are | | | | |