Cash Back Credit Cards - UK-Money.com

Treat Yourself – Take Out a Reward or Cash Back Credit Card

Many of us almost faint at the sight of our credit card statements every month, wondering how on earth we are going to afford the minimum payment let alone pay off more than that. It is estimated that UK credit card users will spend £27 billion on the plastic in 2004, with over £12 billion in the month of December alone!

Of course, there are those of you out there that are enviable and manage to pay their credit card off in full every month. If you do have your finances sussed and under control, why don’t you take out a cash back credit card or a reward card that will reward your efforts?

A reward credit card does basically what it says. For every pound that you spend, you receive a certain amount of reward points that can be redeemed against selected retailers that participate in the scheme. Examples of these are Nectar points, supermarket points such as Tesco’s and Sainsbury’s and Air Miles.

A cash back card is as simple as its name too. For every pound that you spend you receive a certain percentage of cash back which differs between credit card providers.

Why should only people who pay their balances in full take out a reward card or cash back credit card?
These cards are not offered exclusively for people who pay in full every month. The reason such a reward is offered is to tempt you to take out the card and stick with it! Yet such cards tend to come with higher APR’s than others. If you cannot afford to pay off the balance in full every month, the interest costs will outweigh the reward you are receiving. There is no point in getting cash back or collecting reward points if the interest you pay is more than they are worth!

If you do take out a reward credit card or a cash back credit card, you need to manage the card effectively and make sure you don’t build up a balance on it. Do this and you will reap the rewards!