Is Cashback The Future For Credit Cards
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Is Cashback the Future of Credit Cards?
Summary:
Cashback features on credit cards are gaining popularity. Why is this happening, and how can you benefit?Article:
For years, credit cards with long 0% balance transfer deals were highly sought after, often overshadowing other features like headline interest rates. However, the appeal of these balance transfers has waned, partly due to the introduction of transfer handling fees. Now, more consumers are prioritizing cashback features.
Recent studies show that over 20% of users opt for a card with cashback or rewards schemes, surpassing those who favor balance transfers. So, why has cashback become more appealing?
Traditionally, credit cards have a reputation for being costly due to high interest rates and penalty fees?"a perception not entirely unfounded. Cashback cards, however, offer a chance to turn that notion around by rewarding everyday purchases.
Every time you buy something with a cashback card, you receive a small percentage back. While early cashback offers were minimal, often around 0.25%, today's rates are more enticing, with introductory offers reaching 3%. Using a cashback card for routine shopping can quickly accumulate significant rewards.
Moreover, if you treat your card as a payment tool rather than a borrowing method, and pay off your balance monthly, you avoid interest charges. This means the cashback you earn is essentially free money, simply for using a card instead of cash for purchases.
Intrigued? It's easy to see the growing popularity of these cards, but there are a few considerations before you apply:
1. Annual Cashback Payment: Typically, cashback is granted annually either by check or as a refund. This is suitable for most users, but remember, the offer depends on adhering to the credit agreement. A late payment could void your accrued cashback, so timely repayments are crucial.
2. Spending Limits: Many cards impose a spending cap beyond which no cashback is earned. These limits are generally generous, but ensure your anticipated spending aligns with these limits to maximize your cashback.
So, are cashback cards the future? If you regularly spend and can clear your balance every month, they're highly beneficial. However, if you intend to carry a balance, a card with a lower rate and no cashback might be more suitable.
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