Finding the best cash back credit cards is hard, because the world of cash back credit cards is filled with the good, the bad and the ugly. How do you tell which is which?
If you know what to look for and where to look, finding the best cash back credit cards doesn't have to become mission impossible. When you're looking for the best credit cards available, you need to know exactly what you should be looking for. Fortunately, the best cash back credit cards have seven things in common:
1. Reasonable Interest Rates
The best cash back credit cards offer reasonable interest rates. Notice I did not say "low" interest rates, because rewards credit cards usually carry a higher interest rate than your typical low-interest credit cards. That being said, there's no reason to pay more than you have to and you should be able to keep your interest rate at about 11 or 12 percent.
2. No Annual Fee
The best cash back credit cards never charge an annual fee. If you apply for a cash back credit card with an annual fee, there is no guarantee that your rewards will even equal that annual fee (depending on how much you charge each month). Instead of gaining money in the form of a cash back reward, you're losing money because of that annual fee.
3. No Reward Limits
Many cash back credit cards put a limit on the amount of money you can get back on an annual or even monthly basis. The best cash back credit cards, however, have no limit on the rewards you can earn.
Before applying for any particular cash back credit card, make sure there will be no limit set on reward amounts.
4. Beyond the One Percent
It used to be that most cash back credit cards offered a one-percent cash back bonus and that was it. Nowadays, perks associated with the best cash back credit cards can go well beyond just a one-percent reward.
Depending which cash back credit card you carry, you can get up to five percent back on certain purchases, as well as other perks, such as unlimited purchase protection, extended warranties and rental car insurance.
5. Travel and Gas Perks
Some of the best cash back credit cards also offer airline miles, which is great if you travel a lot. Some offer a higher rewards level on gas purchases (often 5%). If you travel or drive a lot, these perks could make one card a lot more appealing than another to you.
6. Introductory Interest Offers
In addition to charging a reasonable interest rate, the best cash back credit cards also extend a zero-percent introductory offer. When looking for the best credit cards to apply for, look for ones that offer zero-percent interest for at least six to twelve months.
7. Finding What Works For You
Before applying for any credit card, always evaluate what's most important to you. If you pay off your balance in full each month, you'll want a card that offers the highest reward amount, regardless of interest rate. If you travel a lot, you'll want a card that offers miles or travel perks in addition to a cash back bonus. By evaluating your specific situation, you'll be able to determine which of the best cash back credit cards is right for you.
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