The following is a guest post on behalf of Financial Facts.
In today’s tough economic climate, everyone is looking for an edge. Every single penny counts in the face of rising gas and food prices, record foreclosures and bankruptcies combined with an uncertain financial outlook that is, quite frankly, rather frightening. If you are thinking now is a good time to apply for a credit card, you could be right. Credit cards can help establish a good credit score, help you bridge the gap between the ends we are constantly trying to meet and help in times of emergency if used responsibly.
Of all the credit cards available out there, you can choose to get one which offers rewards points toward merchandise, cashback on petrol, there’s even a credit card for air miles so your travel is covered as well. However, for some people those choices aren’t really good ones. A cashback credit card is a much better asset. Here are 3 reasons to choose a cashback credit card.
1. It’s CASH! While this seems evident, we’re talking cash money here. This is money you’d normally never expect, so this is a perfect example of if you don’t see it, you can’t spend it. Once you receive your cashback, pretend you didn’t and throw it in a savings account. It might not seem like much at first, but over time it will grow substantially.
2. Earn on what you already spend. The savvy credit card customer will choose a cashback credit card which pays them for spending money on things they already buy. For instance, choose a card which will pay you cash for groceries – you will always have a grocery bill as long as you’re eating, so why not take advantage of this and earn money you’re already spending?
3. Added legal protection. If you’re buying a big ticket item, by using a cashback card you’ll not only earn money, you’ll also qualify for additional legal protection in the form of extended warranties. This can save you a lot of money in the both the long and short term. Not only do you get cash back, you’ll also save money by not having to buy the extended warranty. Win/win.
There are a lot of perks to using a cashback credit card as long as you do it responsibly. Don’t carry over a balance, as the interest rate charged will offset your savings. The best strategy is to pay this balance off before the end of the billing cycle. Avoid those interest rates like the plague to get the optimal benefits. If you’re going to spend the money anyway, a cashback credit card could be the best thing going for you.