Rotating Category Cash Back
This type of cashback system offers you the highest value cashback but in particular categories. You get a lower cashback rate on non-listed categories. For the listed ones, you get to make the purchases within the prescribed time. These categories keep changing quarterly as per the terms and conditions mentioned by the issuer. To earn maximum cashback, you need to log in and opt for the maximum cashback reward category. There are caps on each category; for example, you will earn 5% cashback on purchasing $2500 in a particular quarter.
Limitations to Watch Out For
The cashback system is easy and clear, but still, there are some pitfalls and discrepancies that might keep you at the losing end. For example, people usually don’t calculate the following into their calculation of rewards from the cashback credit card.
Different Rules
Some credit cards allow you to get your reward only if it has reached a particular set level in some mile or points.
Not every credit card allows you to redeem your cashback in terms of money. Instead, most of the issuers make you use this reward in further purchases. At the same time, others want you to transfer them into prescribed accounts.
You will also be asked to make a certain amount of purchase for the particular quarter to receive the cash backs.
The most annoying one is that various credit cards allow you to redeem your reward only once a year.
Read the rules thoroughly before getting yourself a cash-back credit card.
Annual Fees
The more percentage the credit card offers in cashback, the more you will have to pay in terms of an annual fee. If you want to spend from a particular credit card in the concerned category, you must calculate the annual benefit you get as value and cashback from that credit card. Therefore, you need to spend a substantial amount of money on the prescribed category to offset the annual fee of your credit card. Otherwise, you will be paying more in this transaction, and rewards will not compensate for the amount you are paying as an annual fee.
Final Thoughts
Cashback rewards on a credit card are a great way to save money from your purchases. If you are on a budget, these small bonuses can mean a lot to save you from the hassle of the tradeoff in your purchases. But before going to a cash-back credit card, you must sit and look at your spending pattern. You need to carefully formulate the pattern and match it according to the three cash-back credit cards. Never go for these cards all at once. You need to master one card first to fill your wallet with these options to have maximum value.