Find Out Whether Cash Back Credit Cards Really Do Add Up

When looking around for any type of new credit card it is sensible to first look at one of the many finance comparison sites online. With wide experience in all products on the market, sites such as moneysupermarket.com are able to advise customers which cards are offering the best rates and packages. Laid out in simple tables that are both easy to see and read, these sites often come with customer reviews so that there it's a good way to get your search for the right credit package started.

Cash back credit cards are a great way to earn money on regular purchases such as groceries, and certain cards like the Barclaycard platinum credit card currently offer a great 2% cashback on supermarket and petrol monthly. Using your cash back credit card as you would your debit card is the best way to maximise the money you will get back and if you brush up on which affiliated products and outlets are associated with your chosen cash back card you can even qualify for discounts and points. A good example of this type of shopping is to get a Virgin credit card and use it when buying music to qualify for money off Virgin holidays as well as improving the cash back you earn. Of course it is important to choose a card that reflects your lifestyle - if you never buy CDs or holiday outside of the UK, a Virgin card is probably not for you!

Like any other financial product on the market, cash back credit cards want to draw in new customers, so you will find there is often an enticing introductory period which offers you a higher percentage rate of return on goods bought. Usually this is for the first three months, but the percentage can vary from card to card with companies wanting to keep their product as competitive as possible within the market. For example the Capital One Bank Cashback card is currently offering an outstanding introductory rate of 4%, for the first 3 months, which then drops to the standard rate of 1%. This sounds like a great deal until you compare the figures with, for example, the Barclaycard platinum card which offers 2% cashback on supermarket and petrol every month, which may prove to be the most rewarding card in the end depending on what goods you tend to buy with your credit cards.

Using your cash back credit card where you might usually use your debit card also confers other benefits, as well as the alluring prospect of free cash. For example, using a credit card for purchases means you are covered under section 75 of the Consumer Credit Act, which covers any goods you buy over 100, giving you automatic protection against faulty goods.

In order to earn rebates on cash back credit cards it is important to pay off the credit card balance each month in full. If the card isn't paid off in full then interest will be applied to the card, which will usually far exceed any potential earnings from the cash back deal. For example, the Egg Money Master Card gives a standard 1% cash back per year, with a minimum payment of 5, but the APR is 7.9% which, while the annual interest is low compared to other credit cards where the average is 16.9%, is still enough to counteract your annual cash back returns.

When signing up to cash back credit cash, be aware that introductory offers are usually only 3 months. In order to take advantage of this initial period of a greater percentage of return on your purchases, buy larger items if needed and always use your card in place of your debit card. Whereas your debit card does not reward you for groceries and petrol buys your new cash card will especially during the first three months. It is also a great idea to sign up other card holders to take advantage of these offers. If you have another trusted family member who also shops at affiliated stores or a partner who also does the family grocery shopping it makes sense to add them to your account and in effect double the money you earn.

About the Author

David Kelly overview how to reap the rewards and see the warning signs of cash back Credit schemes. Are they something for nothing or whether cash back credit cards really do add up?