![]() ![]() However, most cash-back credit cards have other fees, which could wipe out any rewards you’ve earned. You also don’t have to worry about spending a minimum amount of money to earn enough rewards to cover the annual fee and make the card worth carrying. “No annual fee” simply means that you don’t have to pay an annual fee to carry and use the credit card. What does no annual fee on a cash-back credit card mean? Common categories include spending at gas stations, restaurants and grocery stores. These cards offer higher cash-back rates in specific spending categories that don’t change. Tiered cash-back cards are best for people who want to use a rewards card for a specific purpose. The simplest cash-back card to use, a flat-rate cash back card delivers the same value, typically 1% to 2%, on every qualifying purchase, regardless of the spending category. Rotating categoriesĬards with rotating spending categories, like Chase Freedom Flex and Discover it Cash Back, let you earn higher cash-back rates in categories that change quarterly - as long as you activate them. Others offer a flat-rate for every qualifying purchase. Some have spending categories or tiers of points depending on what you purchase. Types of cash-back credit cardsĬash-back credit cards vary in how they calculate rewards. In general, 1% cash back equals one cent of rewards per dollar spent, but rates can vary by card issuer and offer. With cash back cards, you earn a percentage for every dollar you spend. Some card issuers allow you to redeem your rewards for gift cards or merchandise, as well. Most often, you’ll receive cash back in the form of a statement credit, although you may be able to request a check or direct deposit into your bank account. ![]() What is a cash-back credit card?Īs the name implies, a cash-back credit card offers a percentage of money back on eligible purchases. The last digit of the Credit Card, called its check digit, is calculated using Luhn Algorithm.1% cash back on eligible purchases right away. The account number can be a maximum of 12 digits (depending on the length of the credit card number). The table below shows well-known allocations for IINs. ![]() Conversely, this IIN can be used to identify the type of card. The first six digits of payment cards are unique for each financial institution that issues the credit card. Telecommunications and other industry assignments The first digit of the credit card represents the category or industry of the credit card issuer. The others being American Express (or AMEX), Diners Club, Discover, etc. Visa & Mastercard are the two leading credit card issuers. The other being a commission that the merchant pays on each transaction (generally 2%). It is one of the alternative ways the card issuer makes money out of credit cards. Credit card issuers such as banks impose hefty fines when people fail to pay the due amount. You must pay the bill with real money within a stipulated time, called the credit period. ![]() You get a bill at the end of the billing period. This limit dictates how much you can borrow from the credit card issuer and spend on purchases. How do Credit Cards work?Ĭredit cards have a spending limit called the Credit Limit. We use Credit Cards online on websites, mobile phones, or physically in department stores, hotels, airports, etc. A credit card is a payment card used to make purchases, pay bills, etc. ![]()
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