What is a cash credit card?

Definition and example of cash credit card

How do cash credit cards work?

Types of cash credit cards

Fees for cash credit cards

How to obtain a cash credit card

Definition and example of cash credit card

A cash credit card allows cardholders to earn rewards on qualifying purchases. The rewards you earn can be redeemed for cash back in the form of statement credit, a direct deposit to the linked bank account, a mailed check, or a gift card.

How do cash credit cards work?

When using a cash credit card for a qualifying purchase, the card issuer adds your reward balance to your account. Some cash credit cards offer the same cash rewards rate for all purchases, while others offer a higher percentage for purchases in specific categories, either chosen by you or set by the issuer.

Once the rewards are added to your balance – which can take up to two billing cycles – you can redeem your rewards for cash back.

Types of cash credit cards

Cash credit cards can be classified based on the rewards program structure.

Flat cash back cards: Offer a fixed rewards percentage on all purchases.

Tiered cash back cards: Provide higher rewards for specific categories and a fixed rate for all other purchases.

Flexible cash back cards: Offer higher rewards categories that typically change every quarter or three months.

Customized cash back cards: Allow you to choose your own rewards categories on a quarterly or monthly basis. You may need to set your chosen spending categories to qualify for higher rewards rates.

Co-branded cash back cards: Partner with merchants like Amazon, Apple, and Costco to operate on a mixed tiered structure. These cards offer the highest cash rewards rates for purchases made through the merchant and lower rates for other purchases. Please read the terms and conditions carefully to understand the details.

Fees for cash credit cards

Cash credit cards may come with some fees, and some can be avoided.

Annual fees: These are yearly fees charged on cash credit cards. Annual fees are not common in the cash credit card world.

Transaction fees: Most cash credit cards charge fees on transactions, whether as a percentage or a flat fee:

• Foreign transaction fees: When using your credit card while traveling abroad or making purchases from foreign countries.
• Balance transfer fees: Transferring a balance from one card to another.
• Cash advances: Withdrawing cash using the cash credit card.

Penalties: Most cash credit cards impose penalties that you can avoid by monitoring payment deadlines and terms:

• Late payment fees: Charged when you fail to make a payment by the due date.
• Returned payment fees: Charged when a credit card payment is returned.
• Default APR: A higher interest rate imposed on future purchases when you miss the minimum payment date.

How to obtain a cash credit card

Identify your spending habits to narrow down your credit card options and spending amounts. Shop with major credit card issuers to compare currently available offers and carefully review the rewards categories offered. Some people spend a lot on groceries, while others spend more on dining out. In addition to the cash rewards program, also pay attention to the welcome bonus, promotional interest rate, fees, and any benefits of the credit card.

Look for a cash credit card that fits your credit profile. If you are working on improving your credit score, consider a secured cash credit card for a chance to enter.

Summary:

• Cash credit cards offer a percentage of qualifying purchases as cash rewards.
• Rewards programs can offer a flat rate, tiered rates, flexible categories, or selected rewards categories.
• You can redeem rewards for cash back in the form of statement credit, direct deposit into the bank account, a mailed check, or a gift card.
• Some

Cash-back credit cards offer a welcome bonus for new cardholders who meet the minimum spending requirement in the initial months after opening the credit card.

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Source: https://www.thebalancemoney.com/what-is-a-cash-back-credit-card-5248398