Best Cash Back Credit Card

Have you been looking for the best cash back credit card on the market lately? If so have you ever stopped and asked yourself why?

I have owned quite a few of these credit cards in the past with cash back rewards ranging from 1% to 5%. I have never profited anything from these cards. I started out with great intentions and a plan to make money by getting back a portion of what I spent every month. On paper this is a solid plan, but in reality it came back to bite me.

I’m a modest spender normally and generally only use my credit cards for major purchases. I use them when the amounts are too big to pay with Interac or if I don’t want to carry large amounts of cash on me. This was fine for a while, I was able to make the payments on time and not accrue any interest. The plan was working, I was making money from the cards instead of the other way around. This wouldn’t last.

My first mistake came at the grocery store. I usually carry cash and stay with in my budget, but this trip put me over by about $50. Since I had already made a little cash from my cash back card from the last few months I made the stupid decision to pay by Credit Card……..

An innocent enough purchase but for whatever reason I didn’t pay it off right away and had to pay $5 in interest on it at the end of the month. Big deal right? I was still ahead on the rewards.

I started getting used to buying everyday items on my card with the intention of paying it off at the end of the month. Gas, Groceries etc.. Like I said before I am normally pretty conservative with my shopping but somehow I had justified to myself that the “cash back” incentive had more value than paying with cash for the items. I was able to keep it up for a few months before things got out of had.

It’s funny how the unexpected have a way of happening, well unexpectedly. My wife lost her job and our household income was cut in half. Budget cuts had to be made and soon we were stuck just paying the minimums on the credit cards. Goodbye cash back, hello accruing interest.

The worst part was that we were struggling to pay for things since we didn’t have the cash, eventually we were using the cards out of necessity. That got us into a huge hole that took years to climb out of.

Now am I saying that the reward cards caused the problem? NO, I understand that it was my choice to buy what I did and to use the cards to do it. But, if I hadn’t of had those cards to begin with I wouldn’t have had a pile of ever growing debt to deal with.

It’s the lure of the “cash back” offer that I have a problem with. Not just cash back offers but all reward incentive programs that encourage you to buy things on credit. Most ads for these cards actually encourage you to use them for everyday purchases.

Now you’re probably thinking, “Hey, I’m a smarter than this guy, I won’t make the same mistakes he did.” Maybe you’re right and maybe nothing will happen to you, you’ll be able to pay off the balances without an issue. But my question for you is this: Why Take The Risk? In all likelihood the interest you’ll pay (at rates ranging from 14.99% to 22%) will be far greater than the rewards you’ll receive.

My advice to you is this: Avoid reward incentive types of credit cards all together. If you absolutely need to have a credit card then you’d be much better off in holding one with a very low interest rate rather then the reward cards, which almost always come with higher than average rates to begin with. (how do you think they pay for the rewards???).

Anyway, I’d love to hear your thoughts on this so please leave a comment below and let me know what you think.