When does a cash back credit card pay out its cash back rewards? How is the cash back paid out? There are thousands of different reward credit cards and cash back cards available. Some benefits include trips, discounts at stores, hotel stays, or auto rentals. Now, many people are responding to credit cards that offer cash back. This cash can be put towards your balance or spent on whatever you want. If you are interested in a cash back reward card you may be asking how and when do I get my cash back from my cash back credit card? Knowing the terms of your card service agreement is very important so you can get the cash when you need it.
What are Cash Back Credit Cards?
Credit card companies make money off of you even if you pay your balance in full every month. There is a percentage of each of your purchases that goes to the credit card company direct from the merchant as a fee they pay for credit card processing services and then, if you do carry a balance, you are paying them your monthly finance charge. When you combine this with late fees and over the limit fees, credit card companies are making a lot off of their customers. This is why they can afford to offer cash back credit cards.
Each cash back credit card works differently. Cards offer anywhere from 1% to 5% cash back on purchases. Usually the purchases have to be specific, such as 3% back on groceries or 5% back on electronics. Other cards change their cash back items monthly to encourage you to go out and spend. So one month you may get cash back on groceries another month on entertainment. Most companies will let you know on their website, on your monthly statement, or via e-mail.
If you are looking for the most pay out you will want to go with an uncapped card. An uncapped card will give you your cash back rewards up to how ever much you spend. Uncapped cards are typically for those with excellent credit scores and they often have restrictions on cash back such as no cash back for bills that you pay with your credit card. Capped cards will give you a certain percentage back up to a pre-determined amount.
How Do You Get the Cash?
Here is where the tricky part comes in. Well, it isn’t actually tricky, it just requires a lot of attention to the details. Each cash back card works differently and has different ways the cash is paid out. For the most part, the payments are made to you once per year. Some cards use a calendar year meaning on December 31st of each year you will get your cash back. Other cards work on an anniversary system meaning that on your yearly anniversary of having a card, you will get your cash back.
Most companies will send you your cash back in the form of a check that you then cash. Other companies send it in the form of a prepaid Visa card that you can use anywhere or withdraw the cash from an ATM. Some companies will give you the choice of either one, or ask if you want your cash back put on your card towards your balance. You can just choose the payment option that works best for you.
Some cards will give you your cash back automatically while other companies will wait for you to request your cash back so be sure to know when the payout date is so you can make your request as soon as possible. It is important to note that many cards have caps placed on the amount you can get back. Your card may say something like 3% cash back up to $1,000 (to calculate how much cash back you can earn with the top cash back cards from many different credit card companies then check out our cash back credit card calculator).
What Card is Right for You?
Choosing which cash back credit card is right for you depends on what you want out of a card and what your financial situation is. If you have the financial freedom to charge everything you possibly can and then pay off your balance monthly, then you will want to go with a card that is uncapped and gives the maximum payout. If you are not in that situation and use your credit card mostly for gas, groceries, or shopping then you want to look for a card that gives more cash back for those types of purchases.
The best way to find the card that is right for you is to compare cash back credit cards. You can do that online by using our online credit card chaser tool. Use this tool right now to see what percentage of cash back cards offer, what other rewards are available, and how you get your cash.
Compare credit cards now and start earning your cash back!
