An Introduction to Cash Reward Cards
Doug Smith

Defined Tag: Cash Reward Cards.

If you think cash reward cards are just another type of credit card, think again. These cash rewards programs earn money for you each time you use the card. The rewards accumulate all year, at which time the card company or bank releases all the rewards you've earned. They amount given depends on the card terms and how often you use it. The price of the purchases may affect your card's cash rebates too. This type of savings plan used to be called a "Christmas Club" plan, because that's the time that the cash is awarded to you.

Rewards cards are usually offered to consumers with good credit ratings. The interest rates may be lower than plain credit cards. You can use these cards to build up savings in your account for something special you want to buy. You can also dedicate the cash savings to your year-end holiday gift shopping. Once the cash is paid to you, however, the reward balance on your cash card drops to zero. You must begin building your rewards again the following year. If you don't use all your cash rewards, find out whether you lose the unspent cash or if it can carry over to the next year.

Remember that reward cards are charging you interest if you carry a monthly balance. The best way to use your card is to pay off the balance at the end of each month. That way, you will not be charged an interest payment, making your cash rewards seem even higher. Furthermore, paying off your balance each month might help your credit rating (depending on whom you ask!), possibly enabling you to qualify for a higher reward rate or credit limit. If you are financially responsible, you might qualify for several of these cash-back cards, multiplying your year-end earnings.

Some of these cards are geared towards certain industries. Gas rewards cards will give you higher rebates for car-related purchases. Airline rewards cards will earn you bigger rewards for buying airline tickets or renting cars. Some are just general cards that give you the same percentage cash back on every purchase. There are many cash reward plans to choose from, so pick one that that gives you the kind of rewards you can use the most. When combined with responsible use, cash reward cards can be fun and profitable to use.

Copyright 2008 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited.