You must have heard the term cash-back when you intend to apply for a credit card. it is one of the advantages that a credit card cna offer.

Cash-back reward is a special kind of credit card reward. It refers to a percentage of a credit card purchase returned back to the cardholder in the form of a cash reward.

For example, a cash-back credit card states that 2% of your purchase could become your cash-back reward, once your purchase amount exceeds certain amount of money, let’s say, 500 dollars. If you spent exactly 500 dollars, you then will receive 500*2%, which is 10 dollars, in your credit card account as a form of cash.

Different from cash advance, cash-back rewards are actually sending money back to the consumers in a user-friendly way. For example, consumers could receive this cash-back in their bank checking accounts as deposits, and consumers could also receive this cash-back in a form of gift cards.

In other words, you don’t need to pay a high interest when you are using the money from the cash-back, because the cash-back usually directly returns to your bank checking account or as a form of gift card.

Cash-back rewards could also be used as a method to reduce the credit card balance. You can use cash that the credit card company returns to you to reduce your credit card balance. Say, if you have 1000-dollar balance this month, while the credit card company returns a 50-dollar cash-back to your credit card, you only have to repay 950 dollars within your statement period.

One more benefits about cash-back is that money in the cash-back is considered as non-taxable, which means you are receiving the cash back to your bank checking account on a tax-free basis.

Cash-back rewards provide cardholders a lot of advantages!

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