EARN WITH CREDIT CARDS: USE A CASH REBATE CARD

2007-03-08 10:33:40

( Financial )



You can earn money just by using your credit card. Sounds too good to be true? Not if you have a cash rebate card.

A cash rebate card pays you back a certain percentage of the money you charge. Rebates can take the form of money, airlines miles or gift certificates. There are two main types of cash rebate cards: the 1% flat percentage cash rebate card and the tiered cash rebate card.

The 1% flat percentage card is the most common cash rebate card, because you earn 1% rebate on purchases. MBNA Cash Back, for example, gives you $25 for every $2,500 in purchases, with no limit on how much cash back you can earn.

The tiered cash rebate card usually pays higher than a 1% rebate pay-out, but the rebate percentage depends on how much you charge to your credit card. Higher purchases get higher rebates. Some cards also require you to have a minimum monthly balance to get your rebates.

Discover Card Services offers an alternative to the two kinds of cash rebate cards with their Discover Card Cash Back Bonus. With this card, you can get 5% rebate on purchases made from companies included in their "Get More Partners" program. You get a 1% rebate on all other purchases, as long as you have an annual spening of at least $3,000.

Chase Manhattan has a similar promotion with their Chase Cash Plus Visa Card. You get 5% cash rebate on groceries, gas and drugstore purchases. Other purchases also earn 1% rebate.

Finding the best cash rebate card

To find the best cash back card for you, shop around and do research before signing up for one. Anyone who wants to get the best deal needs only to invest a little effort and time to study the details.

Earning rewards - can you get rebates on any purchase or do you have to charge a minimum amount before you can start earning rebates? How do you get your rebates? Do you get checks or are you allowed to deposit cash rebates into your bank accounts?

Fees and interest rates - Some cash rebate cards have higher annual percentage rates if you carry a balance on your credit card. Some might have higher than usual transfer fees or penalties.

Limits and terms - Is the cash rebate a permanent offer? Is there a limit to how much rebates I can earn on my cash rebate cards?

Using your cash rebate card wisely

Avoid credit card debt - Although they seem appealing, cash rebate cards aren't for everyone. If you can't pay off your credit card balances every month, a cash rebate card is probably not right for you. Whatever you earn on rebates will probably not be enough to cover the interest charged to your cash rebate card balance, so be sure you pay for your monthly payments in full and on time

Make wise purchase decisions - If you can't afford to pay for items in cash, don't buy them. Don't buy unnecessary things just so you could earn a rebate. Avoid getting cash advances, as the fees and interests that go with them are costly.

You really can earn by using a cash rebate card. You only need to be disciplined and smart in managing your purchases, so you can continue to be financially sound.


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