Cash for Credit

There are many kinds of credit cards out in the market and, due to the cut-throat competition amongst the providers, credit card companies are coming up with various promotions: such as waived annual fees, to entice non-card holders to sign up for their services; and rewards programs: in the form of rebates and rewards points, to keep their existing card holders in the fold.

One of the rewards programs offered by card companies to their card holders or members is termed as Cash Rewards. Through this program, for every dollar the card holder pays through the credit card, a certain percentage of it goes back to the consumer. Since credit card companies cannot and will not send out checks covering the cash that has been earned, these rewards will come as a rebate or as cash back bonuses.

The rebate or cash back value differs from card to card and, if the cash back program is tied up with an external retail establishment, the terms will also vary depending on the merchant. Generally, rebates or cash back values range from 1% to 5%.

The card holder’s total rebate amount may be printed on the credit card statement itself or could be sent to him separately. These rewards may be availed of immediately ("refunds" reflected as credit notes on your statement) or the cardholder can opt to accumulate the points and get a bigger reward later on. Another way rewards are given to the consumer is by way of gift checks / certificates from participating establishments. Depending on the program you are on, the gift check may reflect the actual value of your earned rebate or an amount that is slightly higher as some participating establishments and partners may give a rebate that is higher than the standard 1 – 5% rate.

Cash back programs should not be viewed merely as a marketing ploy to entice new customers and to retain old ones. It is a way for people to make the most out of their money. Where else can one find a program where a portion of what he spent will eventually be returned?

Because of the sheer quantity programs being offered by several credit card companies: from rewards on gas purchases, rebates to travel mileage; selecting a credit card based only consumer benefits has become slightly more difficult than it was before. Grabbing brochures to skim over does not make the task easier as, most of the time, credit card catalogues are full of conditions written in fine print and technological jargons that a common layman would find difficult to comprehend.

To help the consumer make a sound decision, various websites have skimmed the fat off traditional credit card pamphlets and have chosen to highlight the key points and present the most important of information in a clear, no-nonsense manner: with the credit card provider on one side, and all its benefits listed on another side (or in bullets, below it). Not only is this format easier to understand, it also makes comparison of credit card services less time consuming.