Updated November 5, 2014

Top 8 Cash Rewards Credit Card Myths

Read more about Cash Back Rewards

Take full advantage of cash rewards credit card benefits when you dispel the top 8 myths.

Cash back credit cards are enjoyed by millions of Americans, and they are now one of the most popular types of credit cards. While most of us have a cash back credit card in our wallet, they are often misunderstood among credit card customers.

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Here are the top cash back credit card myths you need to know:

  1. Cash back credit cards are great for balance transfers – Cash back credit cards have their benefits, but balance transfers usually are not one of them. In other words, you may be better off choosing a competitive-interest-rate credit card to transfer your balances instead of a cash back credit card.

  2. Cash back credit cards offer the most competitive interest rates – Because there are so many cash back credit cards on the market these days, interest rates and other terms and conditions vary widely. Subsequently, it is important to review the latest cash back credit cards before choosing one that features the most competitive rates and terms.

  3. Cash back credit cards are always the best choice for every consumer – For some consumers, cash back credit cards are a great choice. However, for others, cash back credit cards may not be the best choice. If you spend often on your credit card and always pay off your bill each month, a cash back credit card is probably the right choice for you. However, if you are unable to pay off your balance in full each month, the amount you pay in finance charges will likely overshadow any cash rewards you earn.

  4. All cash back credit cards are similar in terms of cash back rewards – Cash back rewards can take on many different forms. Some cash back credit cards, for example, actually send the credit card customer a check, while others simply deduct the amount of their cash rewards from their balance.

  5. Cash back credit cards can earn you cash back on every type of purchase – When choosing a cash back rewards credit card, pay close attention to the type of cash back rewards the credit card company is offering. Some cards offer rewards on solely on gasoline purchases, for example, while other cards offer rewards on every type of purchase.

  6. You must pay an annual fee to get a competitive cash back credit card – Because there is such a great variety of cash back credit cards, you can expect to find a competitive card with no annual fee.

  7. Most consumers will be approved for a cash back credit card – Many cash back credit cards are reserved for only those individuals with strong credit scores. Therefore, many individuals will not be approved for these types of credit cards.

  8. Cash back credit cards are always advantageous – Cash back credit cards are only advantageous if you pay off your balance each month and if you spend often and regularly. Otherwise, they may not be the best choice in terms of a credit card.

If you can dispel these eight cash back credit card myths, then you can take full advantage of the benefits of these cards.

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