Cash Back Credit Cards: Worth Considering
Whether rotating category cards are worth it largely depends on the pricing and terms of the card, your spending habits, and budget. These cards can be worth considering because they let you earn elevated cash back rates, often with no annual fee. Their varied rewards may allow you to capitalize on spending in a variety of categories and save money throughout the year.
Benefits and Drawbacks of Cash Back Credit Cards
The benefit of a card with rotating categories is you could use it to supersize rewards. Say it offers 5% cash back on up to $1,500 in purchases per quarter. If you hit the limit, you’d get $75 per quarter and $300 per year. Others avoid them, concerned they can’t keep track of categories, remember to activate rewards, or fully capitalize on opportunities.
Are Cash Back Credit Cards Worth It?
Credit cards can offer a decent cash-back rate on your purchases. Some cards offer as much as 6% cash back on certain purchases—but many purchases will earn around 2% or 3% cash back. Cash-back credit cards are rewards cards that give you a small percentage of each purchase back as a reward. They can help you simplify your finances, earn rewards on spending, and take advantage of extra perks that debit cards don’t offer.
Considerations for Choosing a Cash Back Credit Card
I’m missing a 5% quarterly bonus card. Should I add a 5% card to earn extra cash along the way of acquiring all cards that I want? Once I have all those cards, I would keep it just for credit limit and history. My profile is good for either, but I’m weighing pros and cons of Discover.
Types of Cash-Back Credit Cards
Cash-back credit cards have both benefits and drawbacks. Two types of cash-back credit cards are available: fixed rate and category bonus. You have to invest the time in making the right purchases and using them. By planning and timing your spending, you can earn up to 6% or more of cash back just by making purchases you’d already be making.