Working Of Cash Back Credit Card

Credit card can be characterized as one of the most attractive financial products which allow the borrower to shop even when they have no balance in their account. Nowadays, every person has a credit card, which proves useful when you fall short of the funds and want to make a purchasing. In order to lure customers, credit card companies have come up with credit card with cash back offer.

Working of Cash Back Credit Card

In order to encourage use of credit cards, varied cash back schemes were launched by banks. When the person makes use of cash back credit card for buying any consumer item then a fixed percentage of the purchase price would be returned in the form of cash value, back to the client. The percentage of return may be even 5 per cent of the purchase price.

For instance, if the customer will purchase the product which costs to Rs 2000 by using the cash back credit card, which gives 5 per cent return then he will be refunded Rs 100, which in turn will be credited to the account by the company. It means the product will only cost Rs 1900.

It is necessary that you are clear about different terms of usage and the interest rate which is charged by the credit card company. It is necessary to make timely payment of credit card bills because if you will miss any payment then it can lead to fast growing debt. It is necessary to use the cash back credit card in order to reap its varied benefits.