Why Cash Back Rewards Can Be Valuable

iQuanti: With cash back rewards credit cards, you can take advantage of tons of perks just by making everyday purchases. As one of the most popular reward credit cards, they can be valuable if you know how to use them. Read on to find out more about the benefits of cash back rewards to decide if this type of credit card is right for you.

What are cash back rewards credit cards?

Cash rewards credit cards are straightforward to use, and many of them offer the same benefits. This type of credit card allows you to earn back a portion of every dollar you spend while using it. So, you'll have to spend money to earn money for your cash back program. 

It's important to consider what rewards mean the most when deciding which cash rewards credit card to apply for. Cash back rewards come in either tiered reward or flat rate programs. Some will be a flat rate of between 1% to 5% of every purchase you make. Some programs offer higher levels for purchases like gas, retail, restaurants, or groceries. 

Benefits of cash back rewards

Cash back rewards can offer the following benefits:

Sign-up bonus

You can receive a sign-up bonus when you open a new cash rewards credit card. You'll have to spend a certain amount of money using your credit card to earn the sign-up bonus within a specified time period, like 3 months. Your bonus may be in the form of points or hundreds of dollars in cash back.

Low or no annual fees

Many cash back rewards credit cards offer no annual fees or very low fees to maintain your credit card account, which can save you money in the long run.

Shopping perks

Cash back rewards can be valuable because they offer shopping perks that can help you save money on your purchases. These perks include return guarantees, cell phone protection, extended warranties, and the lowest advertised prices match.

Redeeming cash back rewards

You can use your cash rewards toward whatever you want, from travel to electronics. It's your choice. Depending on your creditor, you can redeem your rewards in the following ways:

Statement credit

You can apply your cash back rewards as a credit to your account balance, reducing your total credit card bill. This does not count as a payment on your bill, so you'll still be responsible for making your required minimum monthly payments. 

Direct deposit or check

You can also redeem your cash back rewards in the form of a check or through direct deposit to a linked bank account. Once you receive your deposit, you can use the funds for anything you want or need, like paying a bill, an oil change on your car, or new clothes. 

Gift cards

Some cash back credit cards will allow you to redeem your rewards in the form of gift cards from some of your favorite retailers, restaurants, and even movie theaters. 

The bottom line

Cash back rewards credit cards can offer many benefits, from great sign-up bonuses to low or no annual fees. And with a variety of redemption options to choose from, you'll be able to use your rewards the way you want. If you use your card wisely and take advantage of the benefits, you can save money and enjoy some great perks down the line.

Source: iQuanti, Inc.