The best cash back cc
Save money or get cash back when shopping by credit card: This is possible with cashback credit cards.
A credit card with a cashback system offers either a percentage credit for every euro spent, a direct discount on purchases, bonus points or miles to redeem.
Some of these credit cards charge an annual fee, while some are free.
Some credit card providers even grant cashback regardless of where their customers shop.
If you're smart about using the right credit card, you can turn every expense into a little extra cash. Simply pay for your next trip with your cashback credit card and take home discounts or airline miles. Or collect bonus points and redeem them for a fancy reward. And participants in a real "money back" program get money credited to their account.
Are you interested in cashback? Then find out which cashback credit cards could even save you cash.
Cashback credit card - what is it?
Cashback literally means "money back". With this extra, credit card providers want to attract and retain customers. Cashback does not always stand for the program of rewarding purchases in cash. Rather, through cooperation with third parties, shopping discounts, bonus miles for frequent flyers or rewards are offered. For credit card holders, such a cashback credit card can be a useful tool to get reimbursed - in whatever form - for everyday shopping. Examples include:
With the Targobank Gold Card, users automatically receive one percent of the purchase value credited to the card account in the following month for every payment they make with it. This is the simplest type of cashback card. You can think of this cashback system as a small discount on every purchase. If someone makes a purchase with the card for 500 dollar in one month, they automatically save five dollar and end up paying only 495 dollar.
American Express, for example, offers its customers the versatile Membership Rewards bonus program. Points are credited with every cashless payment. Depending on consumer behavior and card use, a lot of points can accumulate. The customer then exchanges these for goods, e-codes (digital shopping vouchers), flights, hotels, etc. at an Amex partner. Or - which is a really nice idea - he makes a donation to a charity. Important note: The Membership Rewards annual fee of 30 dollar is included in the Gold and Platinum Card fee, but this does not apply to the Amex Green Card.
Whether flying, shopping at the airport or in everyday life: "Miles & More" cardholders earn so-called award miles with every transaction. They can then redeem them for flights, hotels, rental cars, upgrades or products at over 300 partners. Interesting for frequent travelers: Don't underestimate extras such as car rental insurance coverage or discounts on rental cars. If you do the math, you'll find you can save hundreds of dollar - provided you don't forget to use the card.
How to make the most of the cashback card
Refueling, online shopping, weekly shopping - please whip out your card! To get the most out of your cashback credit card, it's important to actually use it for the majority of your purchases. Since Visa, Mastercard and now American Express are accepted just about everywhere anyway, this is no longer an impossibility, as it was twenty years ago.
The cashback or bonus programs are not always easy to understand. But users can easily get an overview of their status quo online: where do I stand, how much bonus do I have, what do I get in return?
If you have several cashback cards, you should use them strategically. For example, pay for trips and vacations with the card that offers cashback even when used abroad. Does the son want the headphones from a certain reward package? Then please only use the card valid for this rewards store to pay for all purchases and fill up the tank in order to collect as many points as possible for this. And redeem the rewards as soon as possible. If you don't want any gimmicks, but would rather simply get money back, you should pay for each monthly bulk purchase with a card, which gives you a percentage refund of the purchase value.
Our tip: With too many credit cards, the overview can be lost quickly and financial chaos can be caused. It is easier to use a few cards and only those that fit your personal purposes of use.
What to look for in cashback cards?
If you want a cashback credit card, you should know your own user habits. After all, not every card is profitable for every customer. Keep in mind:
Those who consume little should choose a card with a low - or even better - no basic fee. Because if the fee is high, you end up with a kind of "zero-sum game" in terms of card price and cashback.
A cashback card must suit the user, not the other way around. If you never board a plane, you definitely don't need a "Miles & More" credit card.
Watch out when choosing a credit card partner! Crediting five percent of sales is obsolete if you can only book vacations with a certain travel provider. Especially if it is even more expensive than other providers.
If you use your card not only for cashback programs, but also to withdraw cash at home or abroad, you should find out exactly what the withdrawal fees are.
Taking out a loan with a credit card?
The name doesn't say it all. This is because neither cashback cards nor normal credit cards are a suitable means of borrowing money. Issuers usually offer the zero-percent interest rate only until the credit card account is balanced each month. However, anyone who slips into debit with their clearing account - i.e. current account - for this balance will pay overdraft or overdraft interest.
Those who have a credit card with an installment facility should pay particular attention. These cards rarely provide the freedom they promise. With these installment agreements, a large amount of the credit card bill is deferred and the cardholder is allowed to pay off the loan in subsequent months.
What sounds tempting can quickly become a debt trap. For one thing, annual interest rates for these partial payments are usually enormously high - often much higher than a bank loan. And repayment is made more difficult by the growing mountain of debt - interest and compound interest. Experts and consumer protection agencies warn against cards with installment facility or revolving cards.
How much do cashback credit cards cost?
Cashback cards are available from zero to several hundred dollar for a Platinum or Black Edition. But beware: the free credit cards are sometimes linked to conditions, such as a certain minimum monthly turnover. This should be clear from the price information. So please always study the fine print and thus avoid trouble right from the start.
Do you want an all-rounder card for everyday use with a low monthly fee? A card that is just as good for shopping at the drugstore as it is for filling up with gas or booking a vacation? Then a card with good acceptance, such as the American Express Gold Card, is a useful alternative. In addition to its extensive services and extras, the Membership Rewards program offers a good selection of rewards. Here, every dollar of turnover is credited as a collection point. The Amex app gives users a constant, real-time overview of their current points balance. A major advantage is that card transactions can even be settled retrospectively.
Advantages and disadvantages of credit cards with cashback system
With the credit card we pay cashless and more and more contactless as well as mobile via smartphone. Stores worldwide, service companies such as hotels, restaurants, gas stations or car rental companies accept the card money.
Advantages of a cashback credit card:
- Save money when spending money,
- participation in bonus programs,
- attractive rewards,
- discounts in the double percentage range with partners of the respective credit card,
- depending on the card status such as Gold, Platinum or Black: feet up in the luxury airport lounge.
Possible disadvantages of cashback credit cards you should know:
- Depending on the card, a very high annual fee,
- Discounts only with selected partners,
- Really good rewards only with very high collection points,
- extremely high interest rates for partial payments or individual payment plans,
- Cashback may be tied to minimum sales,
- Cards with bonus programs can tempt customers to overestimate their financial scope and get into debt.
Don't be too dazzled by discounts, cashback and bonus programs. It's better to think about your own consumer behavior before deciding which credit card it should be.
Cashback can certainly pay off. And redeeming points or selecting rewards on the Internet can be fun, too. The "money-back" option is probably best for discount fans. However, a rebate of just 0.5 to one percent is not really much. Collecting award miles is suitable for frequent flyers and frequent travelers. Consumer protectionists criticize above all that the cashback programs are usually very complex. When it comes to costs, you are on the safe side if the credit card's cashback offer does not involve additional fees.