Taking advantage of free money, extra rewards and more perks is a great way to get ahead with your personal finances and eliminated, debts while building wealth. Consumers in 2016 are being overwhelmed with offers featuring great perks, rewards, points and promotional deals, this article should help you navigate how to make the right choice before you apply for a new credit card.
Cash Back or Rewards Cards for Grocery Shopping, Which One Offers the Best Deals
Using cash back card to do grocery shopping is better compared to rewards credit cards. This is because the value that you will get from the reward points is often lesser than the cash back. Besides, rewards points programs will place restrictions on the type of merchandises you can buy for accruing the points.
Related: Costco announces new card promotion offering up to 4% cash back
In rewards points program, every single dollar you spend will earn you one point which is equivalent to $0.01. The point you earn can change from time to time. This is the reason why credit card company store your points in scores instead of telling you how much money your points can exchange for. The points are referred in other terms such as miles.
Besides the normal points that you earn for every dollar spend, rewards cards also let you earn bonus points. You should avoid bonus points programs that have a very short term. Another downside of using rewards credit card for grocery shopping is that you have to pay a higher interest rate. Non rewards cards usually charge a lower interest rates. But, if you pay off all your balance in full by the due date, you may get a lower interest rate.
Many rewards cards also offer big signing bonuses to entice new cardholders. If you want to sign up for a rewards card, you should choose one with no annual fee and low APR fee. Some credit card companies let you redeem the points for cash but you will only get half the worth of the points if you do so.
Cash back programs will usually return back at least 1% of the money you spent on the purchases on selected shopping categories. It is easier to calculate how much you earn in a cash back card because they give you back money instead of a certain amount of points. Cash back rewards are more predictable as they do not involve confusing conversions. Points are hard to quantify because there are lots of redemption options. The value of the points you can redeem will vary across the different rewards credit cards. Furthermore, you can use the cash back card to spend on all types of purchases and still get cash back.
The cash back you earn can be spent on anything, unlike a point program, where you can only use the accrued points on a limited range of items. Many cash back cards do not charge interest or annual fee during the introductory period. The disadvantage is that you can’t use it to get discount on your purchases like rewards card.
In conclusion, no matter whether you choose to sign up for rewards or cash back card, make sure you always do research and perform comparison based on your expenses. In this way, you will be able to reap a large amount of rewards.