Author: dontspendmore

By Matt

Wouldn’t it be nice if you could save money on all your purchases? You would no longer be constrained by retailers’ sales, shopping on your own time and at your own convenience. With a vast variety of credit cards offering reward programs it is now possible for you to earn cashback with every purchase you make.

How does it work?

Credit card issuers offer a variety of reward programs as incentives to use their card when making purchases. Everyone is familiar with flight reward programs, where miles are earned and can be redeemed for travel. But if you don’t travel very often a cashback reward system might be a better fit for you.

With cashback credit cards a percentage of your purchase is redeemed back to you in the form of a check or credit to your account. Most cards offer a one percent of all purchases redeemed to the credit card holder. Premiums rates, usually up to five percent, are offered on purchases at select stores or retail categories such as gas stations and drug stores. The availability of premium rates varies depending on the credit card and their partners. Frequently premium rate offers rotate between different categories throughout the year so it is a good idea to watch the credit card website to ensure you are maximizing your rewards.

Best cashback deals

The formulas used to calculate rewards or earnings can sometimes be complicated. If you find yourself becoming confused when trying to estimate a card’s potential savings you might want to choose a card that has a more straightforward reward structure. Here are a few of the best offers to watch for when considering a new reward-based credit card:

• Bonuses – Many credit cards will offer a sign up bonus, usually up to $150, when you apply for the card. The catch? You will have to spend a specified amount of money with the card in the first few months in order to redeem the bonus.
• Low APR – Reward-based credit cards usually carry a higher interest rate than other cards.  Look for a card that offers low APR (annual percentage rate) in addition to the reward program. If you can transfer the balance from your existing credit card then you will realize some real savings. Keep in mind that low APR is usually restricted to the first six or twelve months. Find out what the interest rate will be when the introductory rate expires.
• Increased online savings – Instead of redeeming straight cash, you might be able to maximize your rewards by spending your earnings through the credit card’s website. Common offers include discounted gift cards and sponsored products priced below retail pricing.

When choosing the right cashback card for you, consider your spending habits. Savings can be easily offset if you find that you have to divert from your typical purchases in order to earn more rewards. Look for a card that compliments your lifestyle and financial situation.

By Matt

Chances are you already have a credit card that offers some type of a reward structure. These reward programs generally allow the cardholder to accumulate points or earn cashback when they make purchases with their credit card. In the exceedingly competitive credit card market reward programs are offered by financial institutions as incentive for the consumer to use their card. If you fully understand how reward structures are formulated, you can maximize the cashback bonus that you receive.

Types of bonuses available

The most common bonus offered by credit cards is the initial sign up bonus. With a cashback credit card, the bonus is usually between $50 and $150 and requires the cardholder to spend a certain amount of money within a set timeframe for the bonus to be released. For example, a card offering a $100 sign up bonus might be released only once $500 worth of purchases are made in the first three months. Other typical bonuses include a premium cashback rate, usually five percent, for purchases made at select categories of retailers (e.g. gas stations or grocery stores) or at select sponsored retail partners. Discounts are often offered when cash earned through the program is used to buy products or services through the credit cards website.

Click here to compare credit card offers: 0% intro APR

Increase your rewards

If your goal is to maximize the benefits of your reward program then it is important to fully understand how they are calculated and use the bonuses to your benefit.

• If a credit card offers a premium on grocery purchases then exclusively use that card for purchases at the supermarket.
• Take advantage of discounted gift cards and online purchases. Some cards will offer $25 gift cards for $20.  This offer would increase the value of your cashback by 20%. Items available through online redemption are also usually discounted from retail prices. Shop and compare.
• Keep an eye on your reward website. Gift cards and other products occasionally go on clearance and steep discounts (sometimes up to 75%) are available.
• If you carry a balance on your current credit card it is a good idea to look for a card that offers 0% APR on balance transfers. Even a modest $1,000 balance will see annual savings of $150 if you are currently paying 15%.

Three items that will offset your earnings

1. Annual fees – If a credit card charges a $89 annual fee then you should deduct $89 from any savings that you anticipate.
2. Rotating premium categories – Many cashback cards rotate the category of retailers where you earn a premium reward rate. Monitor the premiums offered to ensure that you are earning what you think you are earning.
3. Thresholds – Some cards require a certain amount of cashback to be earned in a year before redemption can take place. If the threshold is $100 and you earned $90 in rewards you could potentially lose that money.

Cashback bonuses can be maximized if you understand how the reward structure works. Make the most of your reward program by letting your credit card work for you.

By Matt

Credit card reward programs have become so prevalent in recent years that consumers expect —  even demand — that they should be receiving something in return for spending money (something besides the item they are purchasing). As rewards programs have become the norm, and paying with cash is becoming more obsolete, banks now offer cashback debit cards as an incentive to use their product. Reward debit cards have much in common with their credit card kin, but it is important to understand exactly what your card is offering in order to evaluate it.

How does a cashback debit card work?

Cashback debit cards redeem a percentage of purchases made by the consumer. The cash reward is made available by check or it can be credited back to the cardholder’s checking or savings account. Typically the account holder must accumulate a specified amount of money before she is able to request a payout. In some cases, points are earned for making purchases and can be converted into cash or gift cards for specific retailers. Many banks require the account holder to carry a minimum balance in order to be eligible for reward programs.

Why should my bank pay me to spend my money?

The answer to this question lies in the system by which banks charge (earn?) fees. Most cashback debit cards only offer the reward on pin-less transactions. These are transactions where a signature is required rather than a pin number. When the transaction is being made, the consumer selects the credit option on the pin pad and signs for the purchase.

There is no difference to the consumer because the funds still come from a bank account. The difference to the bank is the amount that they charge for the two different types of transactions.  Debit purchase fees are governed by legislation and are a fraction of the 1.5% – 4% of the transaction that is charged to a business for accepting a credit card payment.

Essentially, the bank is giving you a cut for using a method of payment that costs the retailer more money. It’s a win-win proposition – unless you’re the retailer.

Cashback: Debit Versus Credit

For the most part, debit card reward programs are not as lucrative as credit card reward programs.  So why not just stick to using your credit card and earn cash faster? For starters, debit cards use money that is sitting in your bank account, whereas a credit card transaction is a loan that must be settled with the credit card company. Avoiding credit cards is one way of avoiding debt. Credit card companies can charge up to 24% interest on unpaid balances. Many credit card reward programs charge an annual fee which will offset any reward depending on how much you use the card. Also, some people may not qualify for credit cards, while others are simply anti-credit.

Deciding whether a cashback debit card is right for you involves considering whether the structure of the program makes sense from your financial situation. A good rule of thumb is to determine if you already spend in a way that compliments, or optimizes rewards. If you have to change your spending habits to make it work, then it doesn’t work for you.

By Matt

With the abundance of credit cards available, and the endless variety of rewards programs associated with them, it makes sense to do some comparison shopping before deciding on your next credit card.  In the last decade, cashback credit cards have become a popular alternative to the standard flight reward programs offered by credit card issuers.

What is a cashback credit card?

Cashback credit cards use a formula — usually a percentage of the amount of money you spend with the card — to calculate a cash reward payable to the cardholder.  Typically, one percent of the value of all purchases will be redeemed to the consumer.  In reality the formula usually isn’t really that simple.  Many cards offer a premium; say five percent, on purchases at certain types of stores, like supermarkets or drug stores.  With some credit cards you must shop at specific brand stores in order to be eligible for the cash incentive.

Click here to compare cashback credit cards

What’s the catch?

Good question. The answer: there really is no catch.  As long as you pay your statement balance in full each month you will benefit by receiving cash back on the purchases you make with your card.  But that doesn’t mean there aren’t restrictions and other provisions make reading the fine print worth the time.

Caps and accumulation thresholds

Some cashback cards cap the amount of cash rewards that can be accumulated in a year.  If your card has a $400 cap, you will not accumulate any more rewards once you have reached the limit.  Many cards also have a minimum accumulation threshold before the reward can be redeemed. For example, you might have to accumulate at least $100 in rewards before you can cash in.  Finally, some cards have a graduated reward formula, where the cardholder might earn 0.25 percent on the first $1,000 spent, 0.50 percent on the next $1,000 and only reaching one percent cash back on money spent in excess of $2,000.

Three incentives that make cashback cards stand out

1. Sign up bonuses – Does the card offer a sign up bonus?  If not you might want to keep looking.  In order to get their card in your wallet, many credit card providers are offering bonuses.  Anywhere from a $25 gift card to $150 cash is currently being offered.
2. 0% APR – If you’re carrying a balance on your current credit card you’d probably like to have the interest rate lowered.  Look for a credit card that lets you transfer your balance and cuts the rate on the transferred portion. Additionally, some cards offer 0% interest on purchases for the first 6 or 12 months.
3. No Annual Fees – Annual fees.  Some cards charge them, some cards don’t.  You probably want to be in the latter group.

If you’re willing do to some comparison shopping, you will be able to find the credit card that suits your personal and financial situation.  Remember to look closely and ask questions to ensure that you understand all the terms and conditions.

By David

It is no secret, credit card companies have numerous ways to separate you from your money, but you can end up on top if you take advantage of reward programs and swipe responsibly. Almost all credit card companies offer some form of reward program, so it’s only a matter of finding what works best for you. Here are a few tips that will help you score card rewards and make the most out of them.

Focus on programs that reward you for being yourself

There’s no point getting a credit card that only rewards you for activities you never partake in, now is there? The way most reward programs work: the lending institution gives you points towards a reward when you make select purchases.  For some, it might be groceries, while others might reward you for making purchases at the hardware store.  Obviously, for example, if you’re a carpenter who frequently visits the hardware store to purchase tools and materials, it makes more sense to get a card that rewards you for that.

When in doubt, go with cashback

Even though most credit card companies have some sort of reward program that gives customers cash back, most people elect for other rewards. That’s because many feel there’s more value in the other alternatives, even though that isn’t always the case. For example, some lenders offer up to 3 percent cash back on all purchases, so if you typically spend $2,000 on monthly bills — which many people do — you’ll get back $60 every month.

Use your primary card for all purchases

There’s no point in having multiple reward cards, so focus on having a primary one. That way, you can accumulate rewards a lot faster, score credit card rewards, and also make it easier for yourself to keep track of your points. Sometimes, using one card isn’t a viable option. The main thing is to keep the number of credit cards you have to a minimum.

Click here to compare cashback rewards credit cards

Watch your rewards like investments

The points are yours. You’ve scored card rewards with your hard earned money, so don’t let them go to waste. Rewards often expire after a specified period. Make sure you go over the terms and conditions of your lending institution, and always keep an eye on your points.  If you slip and let some points expire, no need to panic, as many credit card companies allow you to buy back your points after they expire.  Still, it never feels good to spend money on something you’ve already earned, so try not to be in that position in the first place.

While credit cards can ruin an irresponsible person financially, they have a lot to offer those who are able to manage their finances properly. By following the above tips, you should be able to score card rewards, and maximize the number of points you earn. Don’t feel guilty about taking free stuff from the banks, if you weren’t responsible with your money, they wouldn’t hesitate to slam you with all sorts of fees and charges.

By Matt

Credit card companies offer cashback cards which allow the user to accumulate cash as they make purchases with their credit card.  This is an alternative to traditional flight reward programs and is popular among consumers who do not travel.  Since credit cards vary in how cash rewards are calculated, the following cashback cards comparison offers tips on which credit card is right for you.

Not all cashback cards are created equal

There are as many formulas for calculating cashback rewards as there are credit cards.  Most offer a fixed percentage, usually one percent on all purchases, with up to five percent premium payout on purchases at specific categories of stores such as grocery stores and gas stations.  Some cards only offer the premium payout at their eligible partners.  In addition to the money back bonus, some credit cards will offer a sign up bonus, usually up to $100, that will be triggered when a   specified amount of purchases have been made on the card.  Still other cards allow the user to collect points which can be redeemed for cash.

How do I get paid?

Cashback cards allow you to accumulate rewards and be paid out either by check or by crediting the amount to your credit card. Some cards allow you to claim your reward at any time, while others require the cardholder to cross a threshold in accumulated cash, say $50 or $100, before a payout will be made.  Additionally, some cashback cards have a fixed limit on the amount that can be earned in a year, for example, after $500 has been paid out no more rewards will be earned.

Cashback cards comparison: Three critical considerations

1. APR. Many cards offer 0 percent on balance transfers and purchases for a limited time period.  After that, standard interest rates will kick in.  Since interest rates can vary significantly from card to card (anywhere from 10% to 22.9%, it is a good idea to read the fine print.
2. Do you carry a balance? If so, you may want to reconsider a reward card in the first place.  Cashback cards typically carry higher interest rates and are therefore more lucrative for cardholders who pay off their balance monthly.  If you carry a balance you may want to opt for a lower interest rate in lieu of the bonuses.
3. Restrictions! If a card limits your annual reward, or restricts where you earn rewards, then it might not be right for you.  Also consider whether there is an annual fee, and if sign up bonus thresholds are feasible.

As you can see, there are many factors involved when making a cashback card comparison.  As with all contracts, make sure that you read the fine print and fully understand the terms of your cardholder agreement.