Cash back credit cards offer incentives that either give you reward points for purchases later or they send you an actual check in the mail. These types of cards can create an opportunity to save money.

Generally speaking, these credit cards are best for people who have great credit and who pay off their credit cards each month.

A cash back credit card can actually help you stretch your dollars when you follow a few basic tips:

Know whether a reward card will be your best choice

If you are in the habit of paying your credit card off each month than a reward card is right for you. Because they usually carry higher interest rates than other cards (up to 20%) they can cost you more over time. If you are a person that carries a balance most of the time then a low interest credit card is a better fit for your needs.

Make your payments on time for the best rewards

Most credit card companies will stop your rewards if you are late in your payments. They may even increase your interest rates.

Stay clear from cards that make annual fees

Annual fees encumber a card’s integrity and keep you paying for something that is not a real charge that you used. Because of the competition in credit cards you can usually find one that has no annual fee.

Match a cash back credit card to your spending behavior

Find out the type of cash back or rebates the credit card offers. As an example, some will give you cash back when you buy gas or groceries and others will only give it back for higher end purchases. If you just use your card for small purchases match your needs to the card incentive plan. Also, check to see how much you have to spend before you get a higher percentage rate on cash back purchases.

When you have the opportunity, choose the cash instead of reward points

There are many credit card companies that will give you reward points towards the purchase of certain merchandise but what you find out later is that you don’t like or can’t use the products. You can rack up points but have no way to use them. Cash works for everything… enough said.

Airline cards vs cash back credit cards

If you are a frequent flyer you may check out the cash back reward cards for those that offer frequent flyer miles or cash back towards travel purchase. This may be a better choice than an airline card because they do not have as much at stake. 

In the end you are the only one that can choose the right card for you but it is a good idea to be a well informed consumer. You can find a variety of reviews on the Internet about consumer use of these types of cards. Always make your decision after doing enough research and choose your card wisely.