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Credit Cards
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Find all the features listed to make the best choice possible...
 0% p.a. for 6 months on Balance Transfers ~ 10% cash back on purchases at BP until 31st July 2012 |
 Balance Transfer Rate reverts to 21.39% after 6 months ~ Purchase Rate 20.89% p.a. |
Cash Back Credit Cards
Are you an Australian whose eyes light up when they see cash back credit cards advertised? There's something very satisfying about credit card companies paying YOU, isn’t there?!
A cash back credit card works by providing cash returns for every purchase you make on the card. This may be in the form of points which translate into cash, for every dollar you spend; or a lump sum that is paid to you after you have reached a certain level of purchases in the year or within a monthly timeframe.
it may work as a percentage - like 1% cash back on all purchases made; there may be additional bonus cash back arrangements for shopping at specific participating retailers.
There are many ways to structure the cash back credit card and the "devil is in the detail."
Who Benefits Most from Cash Back Cards?
In the same way that rewards programs should be treated as attractive perks to a credit card, cash backs work well for people if all the other features of the card work well too. They are not usually a "make or break" reason to opt for a certain card over another.
A cash back credit card may work best for people who are financially organised enough to be able to clear their monthly balances completely, because these cards may have a high APR to compensate for the cash back arrangement.
Some may have a low introductory interest rate which then jumps up after the deal expires. These can work well for making a big purchase, which you plan to pay off within the introductory low interest period and you can take advantage of the cash back too.
Potential Pitfalls of Cash Back Credit Cards
If you are usually unable to clear your balance in full every month then think twice about going for a cash back credit card if it has an accompanying high APR.
The extra interest you pay (20% plus?) may well outweigh the benefits you get from the cash back arrangement (1%?). In other words, there's no point having money coming in the front door to go out of the back door!
If this sounds like you, choosing a card with a lower interest rate may well be more suitable.
The Lower Bills Promise
We can't promise you'll be approved but we can promise to provide you with the right information so that you apply for the best credit cards possible!
