What is the process of cash back credit cards?

 How does cash back credit card work?

Cash back credit cards are a type of rewards card that you can use, but they are not the only type. This is because they pay cash rewards. Let's take a look at how they work. Every time your card is used for eligible purchases (as defined the card's issuer), you receive a percentage back at the close of the billing cycle or statement period.

Most cash back rewards cards pay around 1% to 2.2% of the purchase in cash back. Some cards pay as high as 5% cashback. A flat-rate 1% Cash Back card will earn you $10 cash back each month if you spend $1,000 during a statement period (about a month).

The card may offer bonus cash back based on certain purchase categories, or on activity that is defined in the cardholder agreement. Chase Freedom Flex(sm), which offers 5% cashback for purchases of up to $1.500 in bonus categories, each quarter that you activate, and then 1% cashback thereafter, is an example.

Now that we know how cash back can be earned, let's move on to the redemption side. Your card may give you a variety of options for redeeming your cash back rewards. Here are some of our most popular choices.

Statement credit: A statement credit is one of the most straightforward cash back redemption options. Statement credit: You can redeem cash back rewards to lower the credit card bill. You would redeem $200 cashback on your statement if you had $200 in cash back, and you had a $1,000 credit card bill. Then you would owe $800. This option is very popular due to its simplicity and apparent value.

Direct deposit or paper checks: You may be able log into your card issuer’s website and redeem cash back rewards to get a paper check. The check would then be mailed to yourself. You might also be eligible to have the cash transferred directly to your savings or checking accounts.

Redeem your cashback rewards as gift vouchers: You may be able to redeem your gift cards for favorite brands and stores.

There are many types of cash-back cards

There are many types of cash back credit card, so it is important to understand the differences between them. The most common cash back cards are the flat-rate, rotating-category, and bonus-category types.

Flat rate: Certain cashback rewards cards offer a flat-rate cashback on all eligible purchases. This method of earning is simple and easy. It's easy to get the same rewards rate at all stores, so you don't need to worry about which card you should use.

Certain cards offer cashback on certain bonus categories. American Express' Blue Cash Preferred(r), Card offers 6% cashback at U.S. supermarkets on purchases up to $6,000 annually, followed by 1% thereafter, 6% cashback for select U.S. streaming services, 6% cashback for U.S. streaming subscriptions and 3% cashback for transit (including taxis/rideshares as well parking, tolls trains, buses, etc.) with 1% cash back elsewhere. Although bonus-category cards offer more cash back than most flat-rate cards you will need to keep track of where the card is used to earn the best rewards.

Rotating categories: This is another type of cash back reward card that is very popular. This type of reward can be found in Discover it(r) Cash Back and Chase Freedom Flex (sm). When you activate categories like gas stations and grocery shops, both cards will give you 5% cash back up to $1500. After that, you can get 1%. These cards are fantastic because they allow you to earn even more. But it's up to the cardholders where and how to activate the categories whenever they change.

Double Cash Card offers 1% cashback for every purchase and 1% cashback when you pay your bills. For a total of 2.2% cashback, you get a Double Cash card. what is cashback plan and does it really work