May 14, 2005

Cash back are used to make money on any purchases that you make on your credit card. The rate of payment due back will normally range from 0.5% to 1%, though some will give you 1%-2% on the value of the purchase that you have made. So the concept is very simple, the more goods that you purchase with your credit card the more cash that will be given back to you, which can be every so often or in one full payment at the end of your first year.

This is a credit card that can only be used to it’s full potential if you use the credit card religiously and have the funds to pay off your balance at the end of each month.
If not then a cash back credit card can be a dangerous piece of plastic to have in your wallet or purse, because if you cant keep your balance clear at the end of each month, then the interest charges on these, you will usually find are higher than a normal credit card that is not offering you the cash back facility.

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Most of the big credit card issuers will supply a credit card that has this facility; some of these include, Alliance and Leicester, Egg the Internet credit card issuer, Halifax, Morgan Stanley and American Express Blue card.

But as with all, you should make sure that the credit card you choose is the right one for you and don’t fall into the trap of taking a credit card, just on the little perks that it offers alone.

If you are a person who likes a clear balance at the end of each month, then the thought of getting paid for every purchase that you make sounds good, then you should plump for a cash back credit card, as you will never incur the wrath of interest charges, so basically any credit card will suit you. But if you are a borrower and are only taking a credit card out to make purchases to pay back what you can, then a cash back credit card would probably one to avoid.