Free Cash Back Credit Cards guide and experiences. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
Credit Cards
Cash back credit cards
What a concept! Get paid to spend money! It's every shopaholic's dream come true. Cash back credit cards usually work on a points system that gives you a specified amount of points for each purchase that you make. Then, after a specified period, the points you've earned are turned into a cash sum and is paid into your credit card.
How do these cash back credit cards UK or otherwise, work? Well its wise to keep in mind that banks and lender companies seldom do anything for free, or that will not give them some form of return at some stage. Think about it. If you're given the opportunity to earn cash back on the purchases made on your credit card, you'll be using that card for all your purchases won't you? With your cash back credit card you'll be swiping at every chance – even for smaller petty purchases that you'd normally use cash for.
So now you're using your credit card more often and for smaller amounts. The banks are scoring already. How? Well you're paying service fees aren't you? On every purchase made using that card, you're being charged. Now that you've got an incentive to use that card, you're using it more often and the banks are making even more through their service charges. Sure you're getting a certain amount of that cash back into your account, but in the end, the banks are still making more money though your increased usage of your cash back credit card UK or otherwise.
It might seem like a fantastic opportunity but its wise to remember that chances are the special offer isn't so special and you'll inadvertently be paying more in the long run anyway. Ignorance is sometimes bliss, but when it comes to your finances and your credit record, it always pays to be informed.
