Cashback Credit Cards Secrets

Credit cards operate such that when merchants accept a payment by credit card they pay a percentage of the transaction money to their bank or money provider as commission. It is customary for renowned banks to share this back with their customers to make loyal customers and attract more with their rewarding credit card service. Banks very successful catch customer's attention by offering various deals and services on use of their cashback credit cards.

Credit card commission can be shared in the form of points like purchase discounts, package deals, gas filling etc, AirMiles, or a monetary amount. The money however that is given out has a special name, cashback credit cards. Banks then use from 0.5% to 2% of this money as service offers on cashback credit cards. This rebate is not done weekly or monthly, but annually to make sure that the customer doesn't take and use the credit card for a full year service. Reimbursements given out by the banks to customers is either in the form of credit or individual checks. Canadian cashback credit cards also have extended guarantee dates, theft insurance, baggage delay insurance and car rental insurance as part of their offers.

The advantages of cashback credit cards include the usage of free money where buying things is necessity, want, and even fun for some elite groups, hence they benefit most from their refund on luxury items. Now it depends on you if you want to search for cash back rewards on your own, or get it from your bank, that is ever ready to grab you up as their potential new customer.It has been noted that some banks offer an all time high cashback of 5%. Good customers who pay off their credit bills in full by the end of the month get selected for better credit ratings that earn them bonus points. A particular mastercard in Canada offers 'price protection' by making you a refund of equal to $100 on price difference if you get a reduce price inside 60 days of your purchase.

Now, cashback credit cards are not all good, as they do have some bad points too. Firstly, the lure of rewards encourages customers to make unnecessary purchases making it difficult to settle the balance. Secondly, some banks charge a high rate of APR that just adds to the customer debt. Thirdly, customers should make sure to read the terms and conditions before signing up. One thing to be aware of is that the rates that banks charge initially, is just for 6 months, with a gradual drop to 1% when customers go for purchases.

Canadian financial institutes offer a number of seminars each year to educate customers, so make sure you attend some for your knowledge and always be ready to deal with all the pros and cons when you have been hit by the sales pitch of a credit card seller.