Cash-Back Credit Cards: Things to Know (Beste Cashback Kredittkort)
- Editorial Staff
- 3 minutes ago
- 6 min read
It is vital to remember that cash-back credit cards can range from simple to easy to understand to complex ones, and you must thoroughly analyze them before using them. Of course, both options are rewarding and can offer you peace of mind regarding the amount you wish to get back based on the percentage you spend.
Each time you decide to use a cash-back card to make a specific purchase that qualifies you for the reward, you will earn a percentage of the amount you pay. Therefore, when you spend five hundred dollars, for instance, with a two percent cash-back feature, you will get ten dollars in rewards.
Of course, you will not receive the amount immediately; you must wait until the end of a billing cycle or statement period. Visit this link: https://www.kredittkortinfo.no/cashback to learn more about cash-back credit cards.
You can redeem everything as a deposit on a specific bank account. Others redeem them for specific options, such as gift cards and spending options in certain stores, depending on the provider and terms and conditions.
Generally, we can differentiate a wide array of cash-back credit cards on the market. Some options offer a flat rate on all purchases, meaning you will earn the same reward no matter the amount you spend, but you must use them for specific categories of items.
Others will offer you percentage rewards for all purchases, meaning the more you spend, the more you will earn, which is vital to remember. In a future article, we will present you with a guide on cash-back credit cards, which will help you determine the best course of action. Let us start from the beginning.
How Does Cash-Back Function?
When you use a cash-back credit card, you will earn a specific percentage based on each purchase. Although it may seem like getting cents for dollars, after a while, you can stack up a specific amount you can use for anything you prefer. The main idea is to ensure your account is open and in perfect standing, meaning you will get cash back on eligible purchases.
Of course, some transactions will not qualify for the rewards, including:
• Balance transfers
• For instance, cash advances and other transactions, such as converting into a foreign currency.
• Gambling-related purchases
• Lottery tickets
When you purchase through a third party, such as a wireless card or digital wallet, you may not earn a reward, especially if the technology cannot offer you relevant information about the transaction. As a result, you will not get the money back.
Everything depends on the credit card type, but the process may be straightforward and complex. Some options require specific purchases to offer you the most significant returns, while others will offer you the exact percentage for anything you decide to buy. Different credit card providers will use the cash-back feature in the following options:
Flat Rate on All Purchases
As mentioned above, a flat-rate cash-back credit card can offer 1.5% or higher cash-back on all purchases. It is the most straightforward way to get the rewards, which may not apply to all cash-back credit cards on the market.
Some options offer you two percent on all purchases, one percent when you pay the bill, and one percent when you buy. Therefore, it is simple to earn additional funds, while the necessary factor is repaying all your debts before the due date.
Other options come without annual fees while offering straightforward cash back, meaning you will get an unlimited two percent on all purchases, meaning they do not make a difference between paying and buying.
Elevated Rewards in Specific Categories
You should know that specific cash-back cards can offer higher rewards in specific categories such as streaming services, groceries, dining, or gas purchases. On the other hand, they can also offer you a lower base rewards rate for other items not included in the specific category.
Of course, cards may limit the amount you can get for each bonus category by allowing you to get rewards up to a certain point. For instance, specific cards may offer you up to three percent for buying in branded supermarkets, gas stations, or online purchases but up to a certain amount, such as ten thousand kroner.
Customized Spending Categories
It would be best to remember that some cash-back credit cards will offer you a chance to earn rewards in a few categories from the list of various options that will offer you peace of mind.
For instance, you can find options offering you three percent in a category you can specifically choose. You will get options, but the decision should be based on your spending habits. You will get three percent on specific categories and two percent on grocery stores until you reach a specific amount.
The spending categories will rotate and change after each quarter, meaning you must decide on a new option each time you reach a new quarter. When you hit a specified threshold, the percentage will drop to one percent. At the same time, when you decide to purchase outside of customized categories, you will get one percent cash back.
Generally, spending categories include many options, including drugstores, travel, dining, online shopping, gas, furnishing, and home improvement. Another essential consideration is offering you five percent cash-back on a small threshold, such as two thousand kroner in a specific category until the next billing cycle.
On the other hand, you will receive one percent back for other purchases, meaning if you spend too much on gas each month, you will get higher cash back by specifically including gas as the category for the highest return. We recommend you click here to learn more about credit cards.
The eligible reward categories depend on your habits, meaning you can choose grocery stores, restaurants, streaming services, fitness clubs, home improvement stores, drug stores, live entertainment, travel, and many more.
Rotating Categories
You may find an option that offers rotating categories and a high return percentage, offering peace of mind. Some options feature five percent back in rotating quarterly categories, but you will get a slight threshold that resets after each quarter.
When you reach a threshold, the percentage will drop to one percent, like purchasing anything else. Similarly, as mentioned above, bonus categories can include numerous things, including gas stations, grocery stores, and restaurants. The categories may not match your spending, meaning you should consider each step beforehand.
When choosing this option, we recommend you check the provider’s website to determine the items you can get for the highest cash-back option. Besides, you will need sharp memory and written reminders to help you stay on top while choosing the best categories to offer you peace of mind.
At the same time, you must activate categories online on the provider’s website, meaning if you forget to activate them, you will end up with the lowest cash-back percentage possible. As a result, you should strategically choose the items for which you will get the five percent cash-back feature.
Redeeming Cash-Back
The first thing you must do before getting a card is read the terms and conditions thoroughly, which will help you understand the model of rewards you will get and how to utilize it.
Some credit cards offer redemption after earning a certain amount, while others do not have any restrictions. It depends on the provider and the type of card you get.
When you redeem rewards, you can ask a provider to send you cash back on a personal account or emergency fund, or you can cover a specific purchase, reducing your expenses.
Generally, redemption options vary based on a credit card, meaning you can deposit the amount into a specific bank account or use it as a gift card, check statement credit, etc. Regarding statement credit options, you cannot apply for cash-back rewards before you reach the specific due.
However, you should read the terms on non-cash-back redemptions thoroughly because one lousy step and the amount you earned may lose value. If you have an inactive account, the rewards may expire. Everything depends on the terms you have signed before taking a card. At the same time, you must keep up with payments to redeem the amount.
Final Word
As you can see from everything above, cash-back credit cards come in various options and solutions. It means you should research the best option that works for you online and choose based on your preferences and regular purchases. Spending habits can help you earn the most from cash back, which you can use for other purposes later.
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