Types of Credit Cards

Credit cards which offer cash back on purchases are a very popular type of rewards card. However, do remember that they tend to have a higher interest rate (APR), so if you ever carry a balance – even once – the money you “ made” is wiped out by the interest charges. On average, interest rates on cash back or other rewards credit cards, are at least 1% higher than standard or platinum credit cards.

This kind of rewards card is sometimes preferred because it seems easier than having a card which requires you to redeem miles or track points. However, if the cash back card requires you to carry a balance or offers better rebates if you carry a balance, think again. You need to understand just how much money you will really pocket after paying interest and other fees.

See also:
What is the difference between a Platinum or Gold card and a standard credit card?
What kinds of benefits does a credit card have?
What is a rewards credit card?
What is a cash card/gift card?

Last update: 2006-09-28 19:36
Author: BKO

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