Hey everyone, my name is Joshua Rodriguez and, thank you for joining me for my debut post here on Your Daily Finance! I was honored when I received the email from Thomas asking me to write a piece on credit cards for you guys today.
Since the first email, we have worked out a bi-weekly post here every other Thursday. Every post will be about credit cards in one way or another so, if you’ve got any questions or concerns regarding credit cards in any way, shoot me an email at Joshua@CNAFinance.com and, I may write a post just for you! OK now, let’s get to the cash back credit cards and mistakes you should work to avoid….
Just in case you are not quite familiar with them yet, cash back credit cards are exactly what they sound like. They are credit cards that give you the opportunity to earn cash back with every purchase you make.
This simple concept seems like it really couldn’t be too dangerous right? Wrong! Cash back credit cards, when used improperly can be your fast pass to credit card hardship programs or worse! That being said, here are the most common mistakes consumers make when using them and, what you can do to avoid them! Below common credit card mistakes:
Mistake #1: Turning Cash Back Into A Competitive Game
OK, I admit, I’ve been guilty of this in the past. Of course, I’m not anymore but, I’ve gotta tell it how it is. Anyway, in an office setting, employees tend to get to know each other well enough to talk about just about anything. I’ve had the office cash back rewards account comparison. In doing so, cash back becomes a game in some ways. So, what’s so bad about that?
We’ve been taught all of our lives that if we’re going to play, we have to give it our all, or not at all. It’s been ingrained into us that the higher our points are, the better the turn out can be. The only problem with that is, in this game, to earn the points, you have to create debt. Losing sight of your balance for even one month could have a snowball effect on the way you look at and use your credit cards.
How To Avoid This Mistake
Well, it’s pretty simple, talk about your earned points but, don’t be competitive about it. Also, come up with a monthly credit card spending budget that you can afford to pay off each and every month and make sure that you stick to your budget. In doing so, you will earn as much cash back as possible without going into monthly debt!
Mistake #2: Poor Credit Card Comparisons
Because cash back credit cards are categorized under one big umbrella, many consumers are under the false misconception that all cash back credit cards offer pretty much the same thing at pretty much the same price. Unfortunately, that’s not necessarily the case.
I can’t tell you how many times I’ve heard something like “I saw 5% cash back and figured, sign me up. I did realize it was only on the first $200 I spent and the interest rates were so high.”.
How To Avoid This Mistake
When you’re in the market for a new cash back credit card, remember that they are not all the same. Start out by combing the market and making a list of the offers that seem appealing to you. Then, read the terms and conditions for each of the offers you’re interested in.
Take notes about what you liked and didn’t like with regards to rewards programs, interest rates, promotions and fees. Now, based on your needs, choose the best offer for you. This fairly simple process can save a lot of hair pulling aggravation in the future.
Cash back credit cards aren’t bad credit cards. As a matter of fact, I use them quite often and make a few bucks a month because of it. But, using them properly is key. If you’ve never had a cash back credit card in the past, make sure to do a little research on how they work and how you should use them before actually getting one. Trust me, it’s better to prepare and win than to go in unknowing and lose big!
Thanks For Reading!
Thanks for taking the time to swing by and read my post. I hope you’ve enjoyed it! If you have any questions, concerns, comments or, you just want to have a friendly debate, please feel free to leave me a comment below!