Cash Back Credit Cards

How do cash back credit cards work?  Well this is actually not an easy answer.  Depending on the credit card you are obtaining for cash back you will find there are different methods.  Some of the cash back credit cards will issue you a voucher while others will simple state the amount you have earned and must go online to the account before you can redeem the cash back.  The cash back is going to be used for different things as well.  For example you are not going to find all credit cards issuing cash back in the same way for the same things.

Let’s look at Discover.  Discover has had their cash back program for at least ten years.  They offer cash back on gas, books, music, restaurants, travel, and a few other things.  The amount of the cash back is determined by the type of purchase you have made.  For students they most often find cash back at 5% on books and other school related items at certain points of the year.  Cash back on gas is usually 3% to 5% depending on the month as well.  You see Discover changes the items you receive more cash back on.  The cash back is then issued to you when you reach 20 dollars.  This money may be applied to your balance or you can choose a voucher for any of the stores or restaurants listed on their website.  You must pick the choice and then the voucher will be sent.  Some of the items listed specify that you must have a certain amount of rewards.  For example if you want a reward for Olive Garden or another high cost restaurant you usually have to have more than 20 dollars in cash back rewards to get it.  They also offer a certain period of time to get those rewards once you have earned over the 20 dollars.

Chase, Capital One, and other rewards cards will also have a certain amount of points, cash back or other types of rewards that you must earn before you can retrieve them, but they may offer different vouchers.  For example with cash back rewards on Barclay for rental cars you are going to find that you need to earn a significant amount before you receive that cash back voucher.  They will send it to you if that is the current offer.  Sometimes the cash back will be for other purchases, but you can use it on car rentals.  Often they don’t offer a choice, but send out the voucher. 

So as you can see there are differences in not only earning the cash back, but how you are allowed to use it.  The cash back amount with differ as well.  For example if you have cash back on gas, flights, rental cars, hotels, and the like you may earn points rather than a percentage.  The percentage may even differ from 1% to 6% depending on the card.  So for cash back credit cards you need to do a search for the one offering cash back on the purchases you make the most often.