What is a cash back credit card?

A cash back credit card gives annual rebates or gives back money to the card holder based on how much have been purchased with it. This type of credit card is suitable for those who rarely use cash in their transactions. The rebate is computed as a percentage of the total amount charged to the credit card in a year. Usually, rebates are between 1-2%. Some can even go as high as 3%.

Are rebates always in the form of cash?

Strictly speaking, cash rebates should be in the form of cash. But now that card companies are diversifying, rebates may now come in the form of gift certificates and discount coupons. This somehow blurs the line between and among the different types of credit cards mentioned in the first paragraph of this article.

Some cash back credit cards offer upgrading of membership status which allow their members to more discounts and gifts during anniversaries and holidays like Christmas and birthdays. Moreover, some credit card companies also have partnerships with other consumer products that entitle their members to added product discounts in future purchases.

What banks offer cash back credit cards?

There are many banks that offer cash back credit cards in kind. They usually have a rewards program for members wherein card holders receive gifts and discounts courtesy of partner product companies; discount coupons to hotels, restaurants, specialty stores; and travel miles for non-travel purchases. Below are some banks that offer cash back benefits.
1. Citibank
2. Chevy Chase Bank
3. HSBC
4. Royal Bank Avion (Canada)
5. Standard Chartered Bank

Are cash back credit cards offered only by banks?

No. Since business establishments are innovating their services and benefits for their customers, some of them offer cash back to their loyal customers e.g. Discover Card (Discover Magazine). Aside from giving book and magazine discounts, airline miles are also offered by Discover Card. Big grocery stores such as Krogers, Wal Mart, and Bi-Lo offer cash back but in the form of cash certificates and discount coupons.
How does one get a cash back credit card?

Since almost all credit card companies (e.g. banks, stores, airlines) offer cash (or in kind) back benefits, all that has to be done is to file an application in any of their office or stores, or signup online by visiting their web sites. Just be a word of caution for online applications, make sure that the transaction is made through a secure internet connection since identity theft has become rampant with the advent of credit card use.

Many credit cards are offered in the market today thus, making companies more aggressive in advertising and marketing their card services. These companies (e.g. banks, department stores, specialty stores, airlines, hotels, etc.) have found a powerful tool in catching the attention of prospective card holders: online credit card application.

What advantage/s does online credit card application offer?

The bottom line of online credit card application is “convenience”. Online application is a dream-come-true to future card holders. Imagine not having to queue in long lines just to have a credit card approved. No travel cost just to get to the card company’s office. Since everything is computerized and automated, processing of the application is faster and more efficient.

What is/are the drawback/s of online credit card application?

The major drawback in applying for a credit card online is internet security: computer hacking makes identity theft possible. Make sure that online application is done through a trusted and secure computer.

Do credit cards applied for online offer additional benefits?

No, basically all the services and benefits are the same. Here are some of the benefits given to card holders and future members:

1. airline miles
2. cash back
3. business
4. retail
5. shopping
6. rewards

How does one apply for a credit card online?

Online credit card application is very straightforward. Just follow the directions as prompted. Credit card companies have their respective web sites which are easy to search in the web. Just type the name of the bank, department store/specialty shop, or airlines and add the key words “online credit card application”, and the computer screen will display the search results as well as the URL.

Here are some other reminders when applying for a credit card online:

1. Determine your need for a credit card: travel, grocery, business.
2. Assess your earning capacity and compare this against your needs.
3. Look around the web for the credit card that matches your needs.
4. Check out the following information about your prospective credit card company through the internet:
5. Application fee. Some companies do not charge for applications.
6. Interest per month. Of course, choose the one with the lowest financial charges.
7. Benefits/Rewards/Advantages. These can sometimes spell the difference between good and best credit cards.
8. Disclaimer. This states additional limitations and/or scope to the credit card; make sure you read this.
9. Application requirements. This is to ensure that all necessary personal data and information are available to you when you do the actual online application.

10. Apply for a credit card online through a secure, trusted, and private computer, never in a public computer.

Responsible use of your credit card allows flexibility and leverage as it helps people manage their money. By using the principle of interest rates in credit, it allows large and expensive purchases like buying furniture and appliances. Payment for these large purchases can be extended over a specific period to make it more flexible for the credit user. The credit card company on the other hand is able to earn income charging interest rates for credit used over a specific period of time.

Credit card companies use as promotional or marketing strategies the giving of rewards to their card customers by giving points for every time they use their credit cards when making transactions. These reward points can be in a form of free gifts, appliances, electronic gadgets, cash rewards or travel miles. The number of points per card transaction may depend on the amount purchased. For travel point rewards for example, a 1 dollar purchase transaction sometimes equals 1 travel reward mile. The number of travel miles will usually depend on the travel destinations, the credit card company’s rewards program and the airline companies they have tied up with in their air miles points program.

Travel rewards from using credit cards in making purchases are quantified in air miles. Heavy credit card users are able to benefit from these programs the most as the huge accumulated points that they may make may already equal the points equivalent to one plane ticket. The more purchases a person does on his credit card, the more points his credit card rewards him and the person has the options to convert these to travel air miles.

To determine if the accumulated air miles rewards points a person has is enough to avail of a plane ticket, lets say flying domestic within the US, they can do this by checking with their credit card companies how much air miles they need to accumulate in order to avail of a plane ticket to their desired destination. The number of accumulated air miles points on their card doesn’t necessarily equal the actual miles required to make the trip. In order to determine the actual equivalent of miles their accumulated miles rewards points from their credit card purchases, they’ll need to check with their credit card hotline numbers or from their credit card’s consumer websites to receive more detailed information in determining how much actual miles their accumulated air miles reward points has made, how to claim them and how to work out the travel arrangements with the airline company the credit card company has tied up with regards to the travel rewards promotions.

In determining which credit card to choose, it’s best to know the purpose of getting the card. Credit card companies may offer cards to their clients that have flexible terms with varying annual percentage rates or APRs. In choosing a credit card, an individual will need to study carefully and understand the purpose for getting the credit card.

Different credit cards have different features, APRs, annual membership fees and promotions that they provide their users.

Some credit cards may offer low APRs with no annual membership on the first few years of use although these may change to higher APRs and varying membership costs after the expiration of their waived membership fees and low APRs. In this example, the use of this particular credit card may only be applicable for short term use as there may be other credit cards available that offers fixed lower than current industry’s standard APRs. There are also credit cards offered in the market that waives the annual membership fees on a longer term basis as long as the credit card user is able to meet specific purchase and payment targets.

There are credit card companies on the other hand that offers reward points that provides flexibility in choosing how the rewards will be redeemed. Rewards points accumulated from purchases can be redeemed in the form of gifts, appliances, furniture, or even travel miles. For a frequent traveler who’s also a frequent credit card user, he can maximize the rewards system provided by credit card companies that offers travel perks with their frequent flyer programs.

There are merchants in the business of retail that are also offering credit cards to help promote the sales of their products. A retail company selling products on the internet may offer credit cards under major credit card companies. While the credit card is technically a standard credit card that can be used in purchases from various establishments, the retail company that provides the credit card rewards the consumer with reward points depending on the amount of purchases made. The reward points accumulated then is converted to gifts, products or redeemable check amounts that can be redeemed for products from their stores on the internet.

In choosing which credit card a person will choose, it’s always best to understand the purchase habits the person has. A person who’s a frequent traveler can maximize his credit card use by subscribing to credit cards that offers air mile rewards. A frequent shopper on the other hand may benefit from his credit card by getting a card that his favorite merchant is offering and later on redeem the points accumulated from the merchant’s stores.

I have a friend who’s a frequent traveler who’s most of the time always out of the United States. While he’s always traveling, his purchases done in other countries are done over his credit cards. He prefers using his frequent traveler credit card in buying his plane tickets as these that allow him to accumulate travel air miles. Whenever he buys plane tickets, can always redeem his accumulated travel miles to avail of discounts on his plane ticket or if he has accumulated a lot of air miles already, he can use them in buying his plane tickets alone. He does have other credit cards that were offered to him from US merchant stores. The only problem he has is as he’s always out in other countries, while he’s able to use these credit cards, he may not be able to always to use his accumulated points from those merchant sponsored credit cards because he seldom goes to those stores anymore. In availing of credit card points other than air miles, are there other ways of redeeming them assuming that an individual may not be around all the time to shop back in the locally based stores that co-sponsored those credit cards?

The answer is yes. While an individual may be out of the country on business or leisure, the advantage provided by the internet has allowed consumers all around the world with much flexibility and benefits. Accumulated rewards points from credit cards offered by major US based merchant stores can also be redeemed online whenever he may make purchases over the internet. A person making a book purchase online using his credit card sold to him also by the same online book retailer he’s buying the book purchase right now for example may redeem his rewards points in the form of redeemable gift checks that he can later use to buy other books and have them sent over to his house in the US or send as a gift to friends or loved ones.

In order determine the number of points a person has accumulated from his purchases from his credit cards that he can later on redeem for new gift items, appliances or even equivalent travel air miles, these can also be tracked and checked from the credit card companies’ websites. Credit card companies have their own hotline numbers for inquiries on redeemable rewards also. It’s important to know the equivalent number of points that will be needed to redeem the equivalent items so that the credit card user may maximize the benefits and rewards that his credit can offer him on a longer-term basis.

Credit card companies offer varying benefits and promotions to entice their customers to use their credit cards not only in their everyday purchases but also for major buying decisions.

One of the promotions that credit card companies have is the rewarding of points to their users for every purchase that they make.

Different credit cards have different product features, benefits and ways of providing rewards to their users. A frequent traveler credit card that is made available in the market to those who are frequently flying can avail of the rewards points their card companies provide to them by converting these rewards to frequent flyer miles. These frequent flyer miles is then converted to actual miles that can be redeemed from airline companies that is co-sponsoring the credit card promotions with that credit card company. The frequent flyer miles are not always equivalent to the actual miles required to travel to particular destination. Some credit card companies reward the credit card user with 1 flyer mile for every dollar spent on his purchases. Different purchases mean varying reward points. Retail companies that may also co-sponsor those credit cards available in the market today may have higher reward points equivalent for purchases made on those credit cards to promote the sales of their products too.

Citing the frequent traveler credit card rewards system for example, a card user who purchases groceries, gas or technically his daily purchases, may have an equal travel reward points awarded to him for every dollar he spends on his regular purchases. On the other hand, should he ever buy plane tickets from an airline company co-sponsoring the credit card he’s using, the reward points that he may earn may be higher as this is also one way to help promote the airline company’s latest promotions or travel packages.

Once an individual credit card user has accumulated enough points from his purchases, he may then redeem them for equivalent rewards. The higher the accumulated points, the higher the value of the reward he may redeem. Appliances such as a big flat screen tv or electronic gadgets such as a notebook PC are some of the possible rewards that credit card companies may offer their users when they redeem their rewards points. For smaller accumulated rewards points, a not so frequent credit card user may also redeem their points for rewards of smaller value such as a personal wall clock or a desk calculator. Credit card companies have different rewards for various points accumulated on a specific time period.