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How to Get Cashback Credit Cards

Cash back is a simple concept that has been invented by credit card companies to make them more competitive on the global market. Basically, it means that the customer gets a “reward”, the amount of which is proportional to the transactions and loyalty to the respective credit card company.

Usually when a customer uses a credit card, the businesses pay a certain percent of the transaction to the credit card company. Some of these companies in Canada have started to offer incentives to customers, by paying them back a part of this amount in the form of points, air miles or by simply restoring some of the sum in the card or via cheque. Most of the issuers offer a rebate between 0.5 percent and 2 percent of the difference between purchases and refunds (net expenditure). It is paid annually to the card holder.

Consider Your Credit Card Use

Whether to get or not a cash back credit card depends on the way you use your credit card. If you manage to pay your balance in full at the end of the month and never get to pay interest, this is a good option to get some of your money back at the end of the year. If you are a frequent traveler, you may make a good use of the bonus air miles you get.

Drawbacks of Using Cash Back Credit Card

On the negative side, cashback credit cards come with higher interest rates and if you often have to pay that interest, the money back are not an actual gain. The best indicator on whether you will be approved for a card and whether it is suitable for you is your own credit report, which can be accessed online via certain providers of this service. The higher your credit score, the better the chance of getting more favorable terms.

Applying for a Gas CashBack Card

In a move to attract more applicants, many issuers have raised the percentage they pay back to the holder to 5 percent, which, however, applies only to groceries, gas stations and pharmaceutical purchases only for the first half a year. Later on, the pay back percentage goes down to 2 percent (1 for other purchases). Recently, due to the volatility of gas prices in North America, the American card issuers have launched a gas cash back card (Gas rebate credit card), which was very popular among the general public. This card works the same way as a regular cash back card, the only difference being that the discount is applied on a monthly basis, which allows consumers to track their savings. Again, individuals with higher credit scores have better chances of being approved.

Some Cash Back Credit Cards to Consider

There are plenty of options to choose from. However, you have to be careful with issuers that offer lucrative cash backs in exchange for the payment of excessive interest rates. Some of the best options for a cash back card include: Capital One’s “No Hassle Cash” card (2 percent cash back on gas and groceries, 1 percent cash back on all other purchases), American Express’s “Blue Cash” card (no annual fee, up to 5 percent cash back on eligible purchases), Discover’s “More” card (on the spot approval, 5 percent cash back for shifting commodities such as travel, gas, groceries and restaurants). Another good cash back credit card to consider is VISA’s Platinum Gas / Cash Rewards Card (2 percent cash back on groceries, 5 percent - on gas, no annual fee).