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Why a Cash-Back Credit Card is a Great Choice

Why a Cash-Back Credit Card is a Great Choice
Saroj Aggarwal is an accomplished content writer working in a range of niches for the past 7 years. She has a keen interest in environmental and conservation issues. With a Bachelor's degree in Commerce, Saroj is currently working to assist people with their investment and financial queries.

Cash-back credit cards can be a great choice for people who prefer not to keep cash with them. Moreover, these cards can actually give you money for using them.

Travel rewards vs cash-back rewards

Travel rewards credit cards allow you to accumulate points when you make purchases with them. These points can then be used for your next travel. The downside is that the guidelines are often complicated. There are also multiple restrictions surrounding the points. By contrast, cash-back credit cards are usually a better option. Their terms are simple enough to understand. The rewards are also versatile enough to be used for a variety of things. Cash-back cards are definitely a good option if you want to make the most out of your spending. The fact that you get something in return every time you spend is not a bad deal at all.

The benefits of using a cash-back card

Credit card users have many reasons to prefer cash-back cards over other cards. Here are some of them:

Returns

This is definitely the most prominent feature of a cash-back card. Usually, the minimum amount of cash return is 1% of every purchase. For example,  let’s say you used your card for a $100 purchase. You earn yourself $1 back. This may seem small to you, but this is just the minimum. Most cards offer bigger returns for certain types of purchases. If you use your card for a purchase at the drugstore or grocery store, for instance, you may get a larger percentage of the price in return. Sometimes, the extra rewards can reach up to four times the minimum.

Fees

The annual fee is often the first detail people check when getting a credit card. For travel reward cards, the fees are usually quite high. This is not the case for cash-back cards. Many cash-back cards do not require you to pay any annual fee. For those that do have fees, the cash rewards given are usually much higher.

Bonuses

It’s normal for credit card companies to give rewards to their users. With cash-back cards, the cash you get back is already a given. The good news is there’s a lot more you can get from frequent use. Credit card companies may give you a sign-up bonus when you opt for a cash-back card. Other bonuses may include higher returns for a certain time period. Your annual fee may also be waived.

Limits

Different card companies may only give you rewards up to a certain spending limit. This makes it the perfect option for those who do not really spend a lot. If you need to make larger purchases with your card, however, you may want to think about other options.

How to make the most of your cash-back card

Once you get your cash-back card, you have to make sure you maximize it. The rewards are the main reason you chose this option, after all. The best way to make the most out of your cash-back card is to keep track of spending categories that give the most rewards. For example, some cards give more rewards when you use your card for grocery shopping. On the other hand, some may give you better deals when you use your for gas. A great example would be the Scotia Momentum Visa Infinite. Did you know that they give you 4% back every time you use your card in grocery stores and gas stations? As for Tangerine Money-Back Credit Card, they give you up to 2% in chosen categories. Just make sure you double check the spending categories. You may be surprised that you’re not getting the rewards you’re expecting because of confusion in some categories. For example, Costco and Walmart do not always fall under grocery stores. Now, what if you have both of these cards mentioned above? That’s even better! This means that you can use the cards for specific purchases. Use your Scotia Minimum Visa Infinite when making gas or grocery purchases. Then, use the other card for other categories.

What to Consider in Choosing a Card

Choosing the right card is not just about picking the one everybody else uses. Here are the most important questions you should ask before you decide:

What gives you the most rewards?

A good choice is the MBNA Rewards World Elite Mastercard. If your annual spending is around $25,000, you may end up with a net of $411 in cash. This amount comes after the annual fee has been deducted. That’s 1.64% in returns! The MBNA Rewards World Elite Mastercard also gives a $100 sign up bonus. This means that on the first year, you may be taking home up to $511 in rewards. The Scotia Momentum Visa Infinite is also a great choice. Don’t let the 1% cash-back on regular purchases dissuade you. If your list of expenses has groceries and gas on top, you’ll be surprised what the 4% bonus can do. With $25,000 annual spending, you may earn more than $400 in rewards for the entire year. Obviously, your biggest expenses should play a huge role in your decision. As discussed earlier, certain purchases will give you more rewards than the others. Check what spending categories each card gives the most rewards to. Go with the cards catering most to your biggest expenses.

Do you hate paying annual fees?

The great thing about cash-back cards is that some providers still offer no-fee cards. Look for cards that do not require a fee, then you’re good to go. Before completely discounting card options that require annual fees, consider all the options. Sometimes, the annual fee is more than worth it. Cards with annual fees usually offer more perks than the usual cash-back card. The rewards may be higher. There may be added bonuses, too. Do some computations and see if you could gain more rewards through this option despite the fee.

Is there a minimum income required?

Understandably, card companies want to keep themselves protected. This is why a lot of them have minimum income requirements. Those who have a minimum salary of $35,000 usually qualify for average cash-back cards. World Elite cards may require more, usually around $60,000 to $80,000. Earning a lot less than that? The SimplyCash Preferred by American Express actually has a great minimum income requirement. Basically, anybody with an income of $15,000 can qualify. They also have a sign-up bonus, as well as a 2% cash back rate. That alone makes it a great choice. Note that you may still be approved for a card even if you do not meet the minimum income requirement. However, you have to make sure your credit and payment history is impeccable.

Are there added perks and insurance?

Hands down, the BMO CashBack World Elite Mastercard is the top choice if you think insurance is important. This card offers 14 different types of insurance, so they’re bound to have the kind of coverage you need. They also offer free roadside assistance on top of the other rewards.    

17 Results Updated: September 18, 2019

5.00%

Interest Rate

 

$20.00

Annual Fee

 

-

Balance Transfer

 

Minimum Income

Min Credit Score: 720

More Details

Features

  • Possibility of adding control parameters, like purchasing limits and the ability to block certain types of retailers, for each card holder
  • Online management reports to help you analyze and track expenses
  • An online account management service to allow you to manage your Visa Desjardins Purchasing account on your own
  • Links to major accounting and Enterprise Resource Planning (ERP) solutions.
  • ZERO liability in the event of unauthorized use of your card
  • Liability insurance up to $100,000 per card in the event of card misuse
  • Better security through chip technology
  • PayWave contactless payment technology
  • Optional Business Cheques Service
  • Visa Consumer Authentication Service for your online purchases
  • Visa Account Updater for your recurring transactions

Advantages

  • Better control over business expenses and respect for company purchasing policies
  • Simpler, more accurate purchase accounting for your company
  • Consolidation of information about business purchases
  • Simplification of the process for requests or purchase orders
  • Considerable time and cost savings in your company's procurement process
  • Single payment for all your company purchases: substantial decrease in the number of cheques issued
  • Increased bargaining power with suppliers
  • Decrease in delayed orders

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Business, Cashback

5.00%

Interest Rate

 

$20.00

Annual Fee

 

-

Balance Transfer

 

Minimum Income

Min Credit Score: 720

More Details


Features

  • Online management reports to help you track and analyze your expenses
  • An online account management service to manage your Visa Desjardins Corporate account on your own
  • Corporate Insurance Program at no extra cost including complete travel insurance coverage. Find out more about insurance
  • ZERO liability in the event of unauthorized use of your card
  • Liability insurance up to $100,000 in the event of fraudulent card use
  • Better security through chip technology
  • PayWave contactless payment technology
  • Optional Business Cheques Service
  • Visa Consumer Authentication Service for your online purchases
  • Visa Account Updater for your recurring transactions
  • Desjardins Travel Assistance - For worry-free travel
  • Desjardins Business Assistance - Find out about your business destinations

Advantages

  • Better control over business expenses
  • Integration of data to main accounting and resource planning systems
  • Lower costs associated with employee travel
  • Consolidation of information about business expenses
  • Increased bargaining power with suppliers
  • Simpler and more accurate business expense accounting

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Business, Cashback, Travel Rewards

19.40%

Interest Rate

 

$

Annual Fee

 

-

Balance Transfer

 

Minimum Income

Min Credit Score: 720

More Details

Features

  • Complete insurance coverage while travelling for business purposes.
  • Zero Liability in the event of unauthorized use of your card.
  • Liability insurance up to $100,000 in the event the card is used after an employee is terminated
  • New payWave contactless payment technology.
  • Use the Desjardins My US Card service to manage your card online.
  • Visa Account Updater for your recurring transactions.
  • Desjardins Travel Assistance - For worry-free travel
  • Desjardins Business Assistance - Find out about your business destinations.

Advantages

The Visa Desjardins US Business card is an effective management tool that allows you to:

  • pay bills from American suppliers in U.S. currency
  • settle entertainment expenses incurred by your employees while in the United States
  • avoid paying currency conversion fees by paying for purchases in U.S. dollars

The Visa Desjardins US Business card is essential for owners of small businesses, self-employed workers and professionals who travel to the United States for business.

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Business, Cashback

8.50%

Interest Rate

 

$

Annual Fee

 

-

Balance Transfer

 

Minimum Income

Min Credit Score: 720

More Details

Optional services

  • Travel Insurance Program: Offers complete insurance coverage for your business travel
  • Business Cheques Service: Pay suppliers, settle unexpected expenses or make the most of unforeseen business opportunities
  • Credit balance insurance - Business: Covers credit amounts or financing payments in case of unexpected events
  • Business expenses management program: Offers a wide range of expense management reports to better manage the type and origin of your expenses
  • Business Account Management Service - SME clientele: For a low monthly fee, you can manage your business account on AccèsD Affaires
  • Visa SavingsEdge® - External link. This link will open in a new window. : Turn business purchases[ 5 ] note into business savings automatically.

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Business, Cashback

9.90%

Interest Rate

 

$

Annual Fee

 

-

Balance Transfer

 

$200,000

Minimum Income

Min Credit Score: 640

More Details

Other features

  • Visa payWave contactless technology
  • Verified by Visa
  • Mobile payment solutions
  • Balance transfers

Options

  • Automatic payment of your card balance at no charge with our Authorized Payment Service
  • Online monthly account statements at no charge.

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Cashback, Low Interest, Travel Rewards
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