How Do Cashback Credit Cards Work

Cash back rewards credit cards usually earn a percentage on each purchase the cardholder makes. Most of the time and cashback reward is set at 1%, which have the ability to earn anywhere from 2 to 5% depending on bonuses made on certain purchases. In turn, you can request the cash back in the form of a check, electronic deposit, payments on your existing credit card bill, or a gift card.

The most effective ways to utilize your cashback credit card used to charge everything to this card, for example, your gas, groceries, bills, travel, and any other expenses you can put on your cash back rewards credit card. When you receive your bill, the payoff the balance in full each month, so no interest accrues.

Currently the most popular cash back credit cards are the Discover® More® Card, the Chase Freedom Card, and the American Express Costco True Earnings Card. When choosing a cash back credit card, make sure the interest rate is within reason, and the annual fee is $0.