Why I Stopped Using My Cash Back Credit Card

There are many options to choose from when looking for a credit card. One that can be seen all over is the cash back credit cards. Who doesn’t want to get paid for spending? It seems like a great idea. But that is not always the way it turns out. And many have canceled their cash back credit cards and opted for a better option. Why would the cash back not be a great option? There are a few scenarios to consider. If your situation sounds similar, you will want to look for a new credit card. 

High Rates

The interest rate is often overlooked when reading about the cash back credit card. Instead, the focus is put on what the card can do for you. You can get paid for using your credit card. The issue is when you spend too much and are unable to pay the card off that month. Now you will be paying interest on the amount you spent. You want to avoid paying the interest rate on cash back credit cards. They are higher than most traditional credit cards. The percentage they give you back will not make up the difference. The percentage they are charging you will not be in your favor. This is one reason to stop using a cash back card. They are only worth it if you can always pay each bill in full monthly.  

Expiration 

Like the information about the interest rates, the fact that your cash back can expire is not openly advertised. You want to look for a few situations in the fine print. One is if you are not continually using your card, you can forfeit your cash back in the account. Each card will have a different time frame, but each has an amount of time you can go without charging. When you hit the number of days they deem as inactive, your credits will be removed. Once this happens, you cannot get the cash back. Those that only use their credit card on occasion may have this happen. Losing the reason most sign up for this type of credit card. This means you need to redeem points often, which could mean small amounts. Many like to let it build up and use a considerable sum toward a purchase. But, with the expiration clause, your cash back could disappear. It doesn’t make much sense to continue if you do not use it frequently enough to accrue an amount worth transferring. 

Flexibility of Purchases  

You will be surprised that most cash back credit cards do not give the advertised percentage on all purchases. This means that you could use the card and not get the advertised benefit like you thought would happen. This could result in using the credit card when you would not normally. It also means that a different type of redeem credit card could be a better fit for your lifestyle. If the highest percentage is on items you do not frequently buy, it will not be a great option. Unless you find an offer that has equal cash back on all purchases. The fine print will be the deciding factor. It may be time to terminate your cash back card and find one with better perks. A cash back card that highlights the purchases you frequently make.

Overspending 

The cash back option can lead to overspending. Knowing there is a positive to charging something on a card can make many feel justified in splurging. Thinking about the percentage you will get back is a benefit, but only if you can cover your purchases. The offer can seem too good to be true and end up being just that. Many have fallen prey to chasing the cash back and getting themselves into trouble. It is a solid reason to cancel your cash back credit card if you feel this occurring. There needs to be a level of self-control not to end up overspending and hurting your financial situation. This would be incredibly upsetting if the intended result were the opposite, and you end up overspending. 

Take a look into the use of your cash back credit card. Is it time to change your strategy and abandon your current card? Many other credit card options with incentives could be better for your lifestyle.