Alfred Erickson Garcia

Credit Cards come with a lot of benefits, like the potential to improve your credit score and the possibility to earn rewards like points or even better, cash back. Many credit cards will offer you points that you can use to obtain rewards, however, a more helpful perk to look for in a credit card is cash back.

This way for every dollar you spend, you get a certain percentage back in cash that you can redeem right away for anything you want, instead of saving up points to have to use in the banks rewards system with limited choices.

But with so many options out there, how do you know which credit card has the best cash back benefit?

Certain credit cards will offer cash back that ranges from 1% to 6% and there’s different types: flat rate, tiered, and bonus category.

Flat Rate means that the card will give you the same percentage of cash back for any purchase you make. Generally, these card will pay you something like 1.5% back on all purchases, so you’re always getting some cash back no matter where you’re spending. These types of cards are great for everyday use and you’ll have an ease of mind whenever you make a purchase.

Tiered cash back cards will pay a higher percentage back on certain categories, such as gas or restaurants, and then pay 1% for any other purchase outside of those categories. Take this into consideration if you’re looking into applying for a tiered card, and see if it makes sense for you. If you’re the type of person to eat out at restaurants a lot, you would want to look for a tiered cash back card that pays a higher return on restaurant purchases. For example, a lot of tiered cash back cards will offer you 4% back when you use it at restaurants, 2% back on gas, and 1% back on all other purchases.

Lastly, bonus category cash back cards will offer higher cash back bonuses on different categories at different times, and usually 1% back on all other purchases. An example of a bonus category card usually offers you the ability to pick and choose a specific category (like gas, entertainment, travel, online shopping, etc) and will give you a higher cash back rate, which is usually around 3%. Additionally, a bonus category card will also pay out 1% back on all other purchases outside of the category you chose. These types of cards offer personalization so that the benefits makes sense for your spending.

There are a multitude of options when it comes to cash back credit cards. When you’re picking and choosing which card to apply for, it’s important to consider what works best for you and your spending habits. Not one card is going to be the best option for everyone.

Take time to do your research and consider the following criteria when making your decision on the best cash back card for you:

Type of Cash Back Card: Figure out if the card is a flat rate, tiered, or bonus category card and see which one makes sense for your typical spending habits. These different types of cards all come with great bonuses, but depending on where you spend your money, it’s helpful to know the difference between these three types.

Annual Fees: A lot of cards will charge an annual fee and this can be a deal breaker for some people. But you may be able to find a card with the same cash back rates but with lower or no annual fees.

Welcome Bonuses: This is another great perk when you sign up for a new credit card. To get you to sign up, a lot of cards will offer you some type of welcome bonus, such as getting $200 back after you spend $1000 within the first 3 months of signing up. Keep this in mind so you can max out your benefits.

Ease of Getting Your Cash Back: Some cards make it more difficult to get your cash back. For instance, some cards will require you to have at least $25 in cash back before you can withdraw it manually. While some other cards, will have the option to set up direct deposits into your bank account, so you don’t have to worry since all your cash back is automatically deposited.

Even though all cash back cards are different and may not be best suited for everyone, they still offer a lot of value and benefits. It’s smart to take advantage of these cards so that you can reap the rewards and build up your credit score.



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