Cash back credit cards are those credit cards which offer rebates on purchases made using the credit card. Often, the rebates come in form of cash, which is a percentage of the total purchases made in one year. Cash back credit cards are an alternative to other credit cards which offer perks such as bonus miles and redeemable points.
There are many credit card companies that offer cash back credit cards today. The idea is the same for all these cash back credit cards. The major difference will be the percentage that is given back as rewards at the end of the year. Often, this percentage will vary and can range from 2% to 5% of the total amount that you charge within the year. Obviously, the more that you use your credit card, the higher your rebate will be.
As with all other credit cards, however, it is important to bear in mind that the cash back rewards can easily be negated by bad credit card habits. For example, if you only make minimum payments each month and leave a considerable amount as a revolving balance, you will be paying high interest rates. This means that the 2% to 5% that you get at the end of the year will mean nothing as compared to the additional money you pay towards interest.
With proper use, though, cash back credit cards can help you make considerable savings on an annual basis. Again, make sure to read the fine print that comes with any cash back credit card offer. This will give you a clear idea if it will really be worth your while.