A cash-back credit card allows you to earn rewards when you use it. So, when you buy an item through a cash-back credit card, the issuer “pays you back” a percentage of what you spent. Using a cash-back card can be a useful way to help manage your account in different ways. Some cards deduct the cash back automatically from your account

The card issuer will give you more cash back than they originally pay you in the form of reward points. It is worthy because you always end up with more cash but keep in mind that credit card companies have different cash back policies. Some have a minimum requirement before they will allow you to redeem your cash card while others let you cash in the rewards whenever you want.

There are different types of cash-back credit cards but the three main types of cash-back credit cards include single rate cash-back, tiered card and bonus category cash-back.

1. Single-rate cards pay a flat rate regardless of what you buy.
2. Tiers cards let you select which merchant or merchant category you want to earn higher rates at.
3. Bonus Category cards offer better rates than standard rate. Bonus category cards change regularly.

There are a variety of credit cards that award cash-back, but choosing the best one depends on how you spend. If you spend a lot in certain categories, such as gas or groceries, consider a tiered or bonus category card. If you don’t want the hassle of remembering which card has which bonus categories, opt for a flat-rate card. In addition, know if there are any sign-up bonuses or annual fees before applying.

No! When you sign up for a card that has rewards like cash back or miles, the banking institution doesn’t have to take things like income, taxes, and business expenses into account when calculating your annual fee.

The card you see best is the one that will help maximize the amount of money you get back in your wallet. We suggest finding out your spending habits in order to find the best card for your budget.