Cash Back Bonus CardsCredit Cards and LoansAre cash back bonus cards too good to be true? Wouldn't it be great to have a credit card that pays for half of your sales tax every time you make a purchase? Well, believe it or not, there are cards that offer 1%, 3%, or even as much as 5% back on purchases made with the card. Cash back bonus cards do in fact exist, from well known companies like Discover and Chase. Before you get too excited about your imminent riches however, you need to know a little bit more about where that money comes from and some of the more important parts of the fine print. These cash back bonus cards can be useful if used correctly, but if you just get any old cash back card and use it without thinking about it, you are likely to wind up losing money in the long run compared to taking a more enlightened approach to using your cards. The first thing you need to know about so called cash back bonus cards is that they usually have some of the highest interest rates around. What good does it do you to have a maxed out cash back credit card sucking 20% APR out of your wallet? These cards should always be used specifically as a means of purchase, not a method of payment. In other words, buy it with the cash back card, and then pay the full balance of that card every month. The other important caveat on cash back bonus cards is that they usually have even more restrictions than other bonus cards. The most common restriction is to limit your cash back to certain retail establishments. The company offering the card works out a marketing agreement with a few dozen different well known companies, and they all share the pain of providing the cash back award in exchange for the expected increase in business. Buy something somewhere else, and you're just using a high interest credit card that won't give you any kind of a bonus.
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