If you’re new to credit cards and have heard the term “cash back,” you may be wondering what it means and how it can benefit you. In this article, we’ll dive into the world of cash back rewards on credit cards and explore how they work, how they can be applied in real-life scenarios, and which credit card issuers or banks offer credit cards with cash back rewards. So, let’s get started!

Understanding Cash Back Rewards

Cash back is a type of credit card reward that allows you to earn a percentage of your purchases back as a cash rebate. This means that for every dollar you spend using your credit card, you can earn a certain percentage back in the form of cash. For example, if your credit card offers a 2% cash back reward, and you spend $100 on eligible purchases, you will receive $2 back as a cash rebate.

How Cash Back Rewards Work

Cash back rewards can be earned in different ways, depending on the credit card you have. Some credit cards offer a flat rate cash back, where you earn a fixed percentage on all purchases. Others may have tiered cash back categories, where you earn a higher percentage on specific types of purchases, such as groceries or gas. There are also rotating category cash back cards, where the cash back categories change every quarter.

To earn cash back, you simply need to use your credit card for eligible purchases. It’s important to note that not all purchases may qualify for cash back rewards. Cash advances, balance transfers, and certain fees may be excluded from earning cash back. Make sure to read the terms and conditions of your credit card to understand which purchases are eligible for cash back rewards.

Applying Cash Back Rewards in Real-Life Scenarios

Now that you understand how cash back rewards work, let’s explore how you can apply them in real-life scenarios. Imagine you have a credit card that offers 1.5% cash back on all purchases. Here are a few examples of how you can maximize your cash back earnings:

1. Everyday Expenses: Use your credit card for everyday expenses such as groceries, gas, and dining out. By doing so, you can earn cash back on these essential purchases.

2. Online Shopping: Many credit cards offer additional cash back rewards for online shopping. Take advantage of these offers by using your credit card for your online purchases.

3. Large Purchases: If you’re planning to make a big-ticket purchase, consider using your credit card to earn cash back. Just make sure you have the means to pay off the balance in full to avoid interest charges.

4. Paying Bills: Some credit cards allow you to earn cash back on bill payments. Check if your credit card offers this feature and use it to your advantage.

By strategically using your credit card for everyday expenses and taking advantage of additional cash back offers, you can maximize your rewards and earn more cash back.

Credit Card Issuers and Banks Offering Cash Back Rewards

Now that you understand the concept of cash back rewards, you may be wondering which card issuers or banks offer credit cards with cash back rewards. Here are a few popular options:

1. Chase Freedom Unlimited: This credit card offers a flat rate of 1.5% cash back on all purchases, making it a great choice for those who want a consistent cash back rate.

2. Discover it Cash Back: Discover offers a rotating category cash back card, where you can earn 5% cash back in different categories each quarter. They also match all the cash back you’ve earned at the end of your first year.

3. Citi Double Cash Card: This card offers 2% cash back on all purchases – 1%. When you make the purchase and an additional 1% when you pay it off.

These are just a few examples, and there are many other card issuers and banks that offer cash back rewards. Make sure to compare different credit cards to find the one that best suits your spending habits and offers the most attractive cash back rewards.

Conclusion

Cash back rewards on credit cards can be a valuable way to earn money back on your purchases. You need to understand how cash back works, applying it in real-life scenarios. And exploring the options offered by different credit card issuers, you can make the most of this rewarding feature. Remember to always use your credit card responsibly. And pay off your balance in full each month to avoid interest charges. Happy cash back earning!