Credit Card Operation And Management
Having a credit card is having a ready-to-use revolving line of credit that allows you to charge anything up to the amount of your credit limit at any time, anywhere credit cards are accepted.
When you use your credit card to make a purchase, your bank lends you the money to make that purchase. Unlike a loan with a fixed end date and regular monthly payments, you can choose how much to repay each month with a credit card—a minimum payment, a partial payment, or your entire balance. With a few exceptions, responsible credit card users always pay their monthly balances in full.
Paying With Your Credit Card
When you use your credit card to make a purchase, the bank gives you a grace period—usually between 20 and 30 days—during which you can pay off the purchase before interest begins to accrue.
Grace periods are adequate because they allow you to use your credit card as a short-term, interest-free loan. You will not pay interest on credit card purchases if you pay every penny you charged last month before the due date.
All Things Cashback
Having a credit card can be a gratifying experience, and getting cash back makes them even better to have. With so many offering cashback, let’s look at how they work and what makes them the best credit cards to get cashback.
A cashback card works by taking a certain percentage from all qualifying purchases and returning it to you as a reward. For example, if $500 is spent monthly with a 5% cashback, it will provide you with a monthly earning of $25 for being a loyal card user. Depending on the card issuer, you may have a spending limit, so being aware of it is essential before applying for the card. This can typically be found in the terms and conditions if it uses.
1. The Chase Freedom Unlimited Cash Back Card
The Chase Freedom provides the best initial rates on each purchase. You have many chances to receive cashback. The Chase Freedom provides a rate of 1.5%, which is their standard for purchases. You also receive many other category rewards, such as dining out, travel, Lyft, and drugstore purchases. To welcome new cardholders, a bonus of $200 can be earned as soon as $500 is spent within 90 days of account opening.
2. The Discover it Cash Back Card
This cashback card is excellent for different categorical rewards and provides a 5% bonus on all qualifying purchases among other rotating areas every quarter with a limit of $1,500. Plus, all earnings received through cashback will be matched by Discover on your first anniversary. Nevertheless, if you plan to spend over the limit of $1,500, then opening a cashback card that offers a flat rate may be preferable.
3. The Double Cash Card from Citi
This Double Cash card is the best cashback flat-rate card. It provides cashback of 1% for purchases and an extra 1% as payment is made on balance. The Double Cash card also proudly provides a highly competitive rate in comparison to other credit cards. The earned rewards are convertible into a point system used to purchase gift cards or travel purposes. The conversion is $1 earned by cashback to every 100 points earned. Although it is an excellent value for the long-term, there is no sign-up bonus, making it a bit unattractive. Plus, if there are 12 months of inactivity, then your rewards will be removed. To avoid this, make sure to use it a little bit at a time, so you keep your rewards.
4. The Bank of America Cash Rewards Cash Back Card
This cash rewards card from Bank of America is another one of the best personal credit cards that provide flexibility for many categories. A lot of times, spending can be seen as a cycle for many people. Your winter shopping may increase, but then your summer is spent buying gas for travel plans. Having a Bank of America® Cash Rewards allows you to choose different categories for the bonus once each month, which lets you customize spending with the rewards. A few categories involve shopping online, travel, restaurants, gas purchases, and pharmacies.
Cashback of 3% is also earned on another category that the cardholder chooses and 2% when shopping for groceries. This 2% is only applicable when $2,500 has been reached in purchases obtained from a wholesale or grocery store purchases made every quarter. After that, the rewards go down to 1%. By being aware of the perks and their work, you can take great advantage of them since an annual fee does not apply.
When you decide to obtain a cashback credit card, you will likely see many choices to choose from. Along with these choices, you will love that some can be converted into points and then used to make other purchases without touching your credit limit.
Usually, having fair credit will be the minimum as far as creditworthiness is concerned. However, make sure that you know the requirements for each credit card you plan to apply for.