Frequently Asked Questions
How do cash back credit cards work?
Cash back credit cards offer cash rewards whenever you use the card to make a purchase. A percentage of the amount spent is given back to you in the form of cash. You accumulate cash back before you redeem it.
Some credit cards offer a flat cash back rate on all purchases while others may offer different levels of cash back based on the types of purchases. For example, there are credit cards that give you bonus cash back on grocery or gas purchases.
Are there any downsides to cash back credit cards?
Because there is a rewards component to cash back credit cards, they tend to carry higher interest rates. Ideally, you pay off the monthly balance on your cash back credit card. Otherwise, your interest charges will offset your cash back earned.
Usually, you can only receive cash back rewards in specific increments. So if you haven’t racked up enough cash back, you will have to wait for it to reach that golden number before being able to cash out.
How do I get the cash back?
The cash back can be redeemed through a deposit to your bank account or by check. Some cash back credit cards even let you redeem the cash back in the form of a statement credit. Cash back credit cards may have limits on how much cash can be earned in a specified time period.
There is typically a minimum amount that has to be accumulated before you can redeem your rewards. Additionally, some cards only allow the accumulated cash be redeemed in fixed increments.
* The credit score approval metrics are only guidelines and approval is not guaranteed. This information is based on data provided by Credit Karma