What makes you decide to carry a credit card?
Before, credit cards are exclusive for wealthy individuals who can afford to pay for the high interest rate that comes with it. Thus, only the elite class of the society has the power to make “cashless purchases” using this piece of plastic contraption. However, many credit card companies realized that this kind of product can also be useful to moderate-income individuals in terms of financing their expenditures that their cash cannot handle anymore. That is why majority of Americans nowadays own a single credit card.
Carrying a credit card is not just that you can afford to pay for the interest rate and other applicable charges. Instead, it is one of the best alternatives that you can use in case you run out of cash in times when you need it most. You need to pay for your electric bills, existing mortgages, tuition fees of your children, and other essential expenses yet you do not have enough cash to pay for those expenses. This is when credit cards take charge of all your expenditures in times when you are running out of cash.
Aside from the financial aid provided by credit cards, many individuals find these cards to be quite rewarding as well. The marketing strategy used for attracting potential clients now becomes the ultimate advantage for credit cardholders to use their credit cards for most of their purchases and bill payments.
If you are one of those individuals who want to get something out of using their credit cards, a cashback credit card will certainly work for you. This credit card offers you reward every time you make purchases or pay your monthly obligations using the card itself. Rewards may come into the form of rebates and financial incentives. There are also credit card companies that provide instant points that can be exchanged for premium items such as free airline tickets, free dining pass, or gift certificates.
There are variations in terms of rewards given by cashback credit cards. One of which is cashback credit cards that have zero APR or annual percentage rate on purchases and transfer of balances from credit cards having high interest rates for the first year. In this variation of cashback credit card, you will be able to earn 1 percent back for every purchase that you will make. Aside from earning rebates, you are also entitled to extended warranties, unlimited protection for purchases, and personal accident insurance for the cardholder. As previously mentioned, it is interest-free for the fist 12 months. However, there will be an applicable APR after the introductory period, which is around 10.8 percent, depending on the credit card company.
Another variation of cashback credit cards are those offered within a specific vendor, such as a vehicle manufacturer. Just like the previous variation, it has no annual joining fee and APR during the first year introductory period. You will be able to earn rebates at 1 percent rate on any purchase that you will make 1 percent for any vehicle purchase, and as high as 3 percent on purchase of vehicles owned by manufacturers sponsoring the cashback credit cards you are using. Credit card companies tie up with several companies in providing specific rewards to their cardholders in the form of rebates or discounts on purchases.
It feels good that you can expect something out of what you are spending. Who knows, you can fly to the Bahamas or own a brand new Mercedes Benz for free by just using your cashback credit card.