The cashback rewards program is used to providing a standard percentage of cashback on qualifying purchases. However, competition in this segment has forced the cash rewards scheme to evolve.
The program is now working in favor of those with high spending. The percentage of cashback is depends on the total yearly card purchases. By spending more within a year, you'll enjoy higher percentage of cashback.
There are more issuers adopting this attractive strategy. This is no coincidence as it is credit card issuers intention to encourage the usage of credit cards. And in return, the credit issuers can earn more fees from the merchants.
Aside that, the percentage of cashback may varies based on the purchases category. For example, you may earn a higher percentage on gas purchases but a lower percentage on groceries.
Carefully read the fine prints
As such, it necessary to read the terms and conditions of the cashback. With a thorough understanding, you'll be able to make the most out of your card purchases.
You'll need to pay attention to the limit of cash back you can earned, as well as the expiry date, if any. It's to your advantage to get a cash back credit card with unlimited cash back and no expiry date.
How to enjoy the most out of your cash back credit card?
It is common for a cashback reward card to have a higher interest rate than a regular credit card.
As such, it works best for cardholders who make high enough total yearly card purchases(to enjoy the maximum cashback percentage), and able to pay their balances in full every month.
For those who would like to carry balances with their card, a low interest rates credit card could be a better choice.
Last but not least, with the recent financial crisis and new credit card act, you may see credit card issuers scaling back the rewards in their cashback program.
We foresee a series of changes is coming soon the credit card industry in US, including the introduction of annual fee in the near future. So it works in your favor to get one now as the offer may not last forever.