With an abundance of unique credit cards on the market, the key to financial success is to find one that works well with your lifestyle. That being said, with so many options, it can be challenging to sort through the noise and find that one that is right for you, your finances, and your spending habits.
One of the most popular types of credit cards is a cash back credit card, as they pay back credit card users a certain percentage of their spending. Generally, this payback figure is around 1-5 per cent, which is pretty significant when you consider the fact that you were already going to purchase said items.
If you are considering adding a new credit card to your arsenal and would like to receive what is (essentially) a rebate of a percentage of the purchases you make on the credit card, then read on to learn more about the three benefits of cash back credit cards.
1. You get money back for items you were already going to purchase.
The most obvious benefit of cash back credit cards is that you, as a consumer, receive money for items and products that you were already going to purchase. Talk about a shopper’s dream!
Many people wonder why credit card companies would offer such a rewards scheme, and the fact is they do it to fuel customer loyalty. They want to reward their best customers, and they know that to maintain them, they need to offer competitive benefits.
What’s more, getting some money back from the everyday spending that is already put on a credit card is a very appealing benefit to many consumers, and a key selling point of the best cashback credit card in the UAE.
2. You can choose the form of your cash back.
Generally, most of the providers of cash back credit cards allow you to choose the form in which you would prefer to receive your cash back — perhaps receiving it as a check, or a credit toward your balance, or a gift card, is more preferable to you. You can even donate your rewards to a charity or cause of your choice.
Having this option helps you to make smart money decisions and assists you in keeping your banking life organized and under control.
In fact, another benefit of having a cash back credit card is the simplicity that it brings. You use your credit card as you usually would, and you don’t have to overthink the rewards. Instead, when the time is right, you can simply deduct the cash back from your statement balance or redeem in the form of your choosing.
3. Those with good credit are rewarded.
If you have been managing your money well for a significant period and are on top of your private finance in the UAE (or wherever you reside), there is a high likelihood that you will be rewarded with a cash back credit card that offers the most significant rewards.
These are the cash back credit cards that have “extra” bonus categories, such as restaurants, retailers, and airlines. Those with good credit scores may even qualify for cash back credit cards that award a cash bonus for spending a specific amount within a defined period, which translates to getting paid more for spending more. Ideal!
Are There Any Cons?
That being said, one of the things to keep in mind is that many of the cards (especially the ones that offer highly lucrative rewards) may also require an annual charge. Additionally, the interest rates on cash back credit cards tend to be slightly higher than those of conventional cards.
However, if you are someone who is on top of their finances, who doesn’t carry a balance, and who tends to spend a lot in categories that receive cash back (such as gas or clothes), then obtaining a cash back credit card could make a significant difference with your finances.
Have you ever used a cash back credit card? Would you consider one? What are you looking for in your next credit card reward system? Let’s start a discussion in the comments below.