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Bankrate.com Senior Analyst Greg McBride offers tips for consumers considering a cash-back credit card.
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-- new survey out today from Bankrate dot com takes a look at the most popular cash back cards on the market.
Now you're looking to get a new -- my next guest says there is a cardinal rule to make the most money off of these new types -- reward cards Greg McBride is a senior financial analyst for Bankrate dot com.
I want to get this cardinal -- in just a second but first I wanna know what surprised you.
In these in the seeing awards survey as you look at that tonic cards fifty the most popular cash back cards.
This is really what people love now what did you find out that you -- noble war.
You know I think the.
The most surprising thing Jerry was the fact that not only did we see in uptrend.
In the payouts they got a little more generous than they were just twelve months ago.
But more than 40% of these cards have some sort of introductory bonus so pretty quick way to put some cash in your pocket just in the first few months we know.
I've noticed this in a lot of the advertising the stuff coming to me in the mail.
I mean and I'm really surprised -- how much these cards are paying out why are they improving and willow collapsed.
Well there's definitely an incentive on the card issuers part to get consumers to use credit cards for those routine transactions.
Particularly now that there's been changes to the revenue they get when consumers -- -- debit cards debit cards not as lucrative.
Credit cards revenue has not been impacted.
And as result you see a big difference in terms of the reward programs on the debit -- side we saw 30% decline.
Your every year in the availability of those programs on the credit card side.
Not only are we seeing more of the programs but as -- said they're getting more generous the idea of issuers want consumers to use the credit card.
And -- swipe it for all those transactions that they used to use the debit card for.
So you said 1% who is typically the starting point for payouts but now they're climbing how -- Well we do see some that pay 2% back on all purchases.
In about half of cards have higher payouts for certain categories.
-- things like restaurants gasoline stations things like that so you could really Taylor.
The card and it's in fighting the cards -- the -- is means tailing -- tears spending patterns.
Keep an eye -- those other categories that's where you can really bank a lot of cash well.
I -- -- show folks that some of the cards out there there in your survey like the accelerator rewards Amex that's issued by Bank of America you get a sense of what this looks like.
-- -- -- cash back ratio of one point 25% over 1% knowing annual fee.
Points valid for five years.
Interesting stuff you're not really recommending cards at this point.
But but you're seeing better pay -- I think people will certainly be excited to see that.
-- -- -- -- -- -- Cardinal rule is you have to pay the balance in full every month if you do that.
Then you're truly getting something for nothing when you were you using cash back card but if you carry a balance even occasionally.
Move along there's nothing to see here I will instead focus on.
Not getting the lowest interest rate you can just you can minimize your interest charges they -- on the map is pretty simple media getting 1% back.
If you carry a balance even for one month at 12% interest rate -- wipe out all the rewards you are all your life.
Exactly that is the key to these cards are going to be trip came off each and every month I think a lot of people were looking for options though.
When not there was this prospect that debit cards which start charging higher phases like well I don't need that -- can get -- cash back card do much better.
You also mention that rewards are less likely to expire than they used to be.
Yeah some good -- I mean not only did we find more than 80% of these cards do not carry an annual fee.
But expiration not an issue either two thirds of the cards have no expiration date.
And even those that do they tended to give you three years or five years.
Before that we take -- -- you know the beauty of cash is that it spends very well it's easy to redeem.
You don't have to worry about expiration.
Amen and amen to that all right well -- thanks for coming in tonight we appreciate your time.
Thanks a -- -- great to have you are.
