Right up there with the employer matched 401k are the cash back credit card reword programs. Credit card companies are giving you cash back rewords for using their cards. Be it to pay for gas, hotel rooms, airline tickets or online purchases, you can get a percentage of your purchase price back.
Why the rewords programs?
According to some credit card experts, credit card companies have figured out that consumers are more loyal to cards that have reword programs than those without. On average a customer will hold on to a rewords card about 40% longer than a card without a rewords program attached.
The increased consumer loyalty is very significant, especially if you consider that the cost of acquiring new customers averages about $150.
To prove the popularity of rewords cards, about 2 in 3 consumers now hold at least one reward card, compared to an average of 1 in 6 just 4 years ago.
Cash back cards are the way to go
For most people out there, cash back reword credit cards are the best option. The reason being is that most people don´t spend enough to take advantage of the airline ticket rewords or even those cards that let you accumulate credit towards the purchase of a new car.
Most credit cards will pay you back about 1% to 5% of your purchases (gas, food and clothing just to give a few examples) with a yearly limit. For most people the limit is not a problem, since it is very hard for the average consumer to spend enough money to go over those limits.
In the future we will be reviewing some of the best best rewords cards on the market.
