Earn Money While you spend with "Cash Back Credit Cards"

The idea is very appealing for shopping lovers to earn money while you spend it with your 'cash back credit card'. The process is simple and many of us enjoying saving with their shopping as you get money back on your purchases. It might be around 1 to 5 percent cash back on purchases but more you shop, you save more money. This article would help you get most from your 'cash back credit card' offering you useful tips.



Tips to earn money while you spend with cash back credit cards

* You won't need a spreadsheet to find the most rewarding card--just a calculator and a good idea of how much you spend, where you spend it, and even what day of the week you tend to shop. Many cards reserve their most generous cash-back offers for purchases at supermarkets, drugstores, and gas stations. "Zero in on cards that give you the most generous rewards for shopping at your usual spots," advises Greg McBride, a senior analyst at Bankrate.com.

* Be sure to check the details for your cash back credit cards. Cards that pay you cash back at the highest rates may have caps and restrictions that would result in a lower annual rebate than, say, a straight 1 percent cash back. "Invariably, if you see a 5 percent card, there will be restrictions or other strings attached," Arnold says.

He points to Discover's Open Road Card as an example. The card pays 5 percent cash back on gas and auto maintenance, but the fine print says that applies only to the first $1,200 you spend in the category. Another example is the Discover More Card, which also pays 5 percent on purchases in certain designated categories, but they change four times a year. And if you shop at warehouse clubs or discount stores like Wal-Mart, you'll get back much less--only 0.25 percent.

* But the right card can pay off handsomely. Arnold says he and his wife use American Express's Blue Cash card, which, after you charge $6,500, pays 5 percent back on further purchases the rest of the year in supermarkets, drugstores, and gas stations, and 1.5 percent on everything else, with no limit on the reward amount. Their rebate for 2006 was over $900, Arnold says.

* When shopping for a reward card, as with all credit cards, watch the fine print. Like any other credit card, the reward variety comes with the usual late-payment penalties (as high as $39 a month), as well as shrinking grace periods (as short as 20 days) and lofty default rates (30 percent or higher). They also have some other twists, including the fact that you often have to request your rebate to get it. Generally, the credit-card firms do not automatically send you a check or gift certificate or credit your account. You'll find the gotchas on the terms-and-conditions page attached to online and paper applications.

* You'll also need to keep up on program switcheroos. Card issuers reserve the right to change the cash-back agreement at any time. Be aware that the deal you sign up for today might evaporate next month. To keep up with sudden changes, you'll need to read all those annoying enclosures that come in the mail with your bill every month.