by Ellie Norton

Created on: October 11, 2009   Last Updated: October 12, 2009

Cash rebate credit cards are also known as cashback credit cards. These are credit cards that reward you for making purchases with their cards. The amount of the reward will depend on how much you spend, the percentage terms of the program and the status of your account. Certain credit card companies will give you a cash back bonus after your first purchase in an attempt to get you spending with the card.

You have to be careful with these cards because even though you are being rewarded for your spending, you may in fact be making more money for the credit card company. This is because you may be paying more money in credit card fees and interest then you get back. In most times, the difference in the money you get back and that you pay to the credit card company is astronomically high.

The best way to benefit from cashback credit cards is to pay your balance off in full every month. Yes, mentally it does feel good to see $10 in cash back rewards. But then go and look at your credit card statement and see how much you are paying them for that benefit. In effect, you are really paying yourself if you do not pay your balances off every month. However, cash rebate credit cards can be good ways to make some money on items that you were going to buy anyway.

Discovercard has promotions on their cards where you can get up to 20% back on items purchased at grocery stores, gas, restaurants and others. Everyone has to buy food and gas anyways so why not benefit from these great offers? Just remember it is not free money you are using. A good thing to do is see how much money you have in your bank account for grocery shopping that week, then spend that amount on your credit card so that you can get the cash rebate; and then pay the card off right away. This way you are not borrowing money from the bank in a way that will lead you to pay high interest fees, but you are still able to benefit from the cards great rewards. There are many banks that have cash rebate credit cards, including Bank of America, Chase, Discover card among others. To see an article that rates the best cash rebate credit cards go here.

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