By Zulika van Heerden ©2007

People often make decisions about using credit card debt based on the types of reward programs they are eligible for as cardholders. Some credit card providers offer points toward merchandise or gift cards, airline miles, credit for fuel purchases, and other appealing bonus programs.

Cash rebate credit cards are the latest trend in consumer credit. Extra cash always comes in handy, and many consumers love the idea of earning cash back bonuses from their credit card charges.

While the idea of cash rebates is very appealing, it's important to be cautious any time you open a new credit card account. Unfortunately, what seems to be a terrific bonus program can actually end up costing you money if you don't pay close attention to the fine print of the cardholder agreement. Before you sign up for the next cash rebate credit offer you come across, take the time to make sure you understand all the terms and conditions associated with the account.

Verify the Fine Print

Before you incur credit card debt, make sure you understand all the fees associated with the account. Most credit card programs do not carry annual fees, but there are some that do. You definitely need to know about this
before opening an account.

It's also important to verify the account's grace period, interest rate, late fees, and charges for exceeding the credit limit. You should also find out how the card provider handles fraudulent charges, stolen credit cards, and cases of identity theft.

In addition to being sure that you know how much the credit card can potentially cost you, it's also important to find out exactly how cash back bonuses are calculated and paid out. Some credit card providers automatically send your cash rebate when you earn a certain amount. Most companies, however, require you to request your bonus when you are ready for it. Points earned toward cash back bonuses typically expire if you don't redeem them within a certain window of opportunity.

How to Benefit From Cash Back Credit Cards

The best way to take advantage of a cash rebate credit card program is to use your credit card to pay for your everyday purchases, and then pay the bill in full at the end of every month. This way, you enjoy the benefits of accumulating points toward cash rebates for your everyday purchases, but you aren’t purchasing things you don't need, or spending money on interest.

If you have the self-discipline to use your cash back credit card in this manner, the rebate rands you receive really are a bonus.

What to Avoid With Cash Back Credit Cards

The worst way to use one of these cards is to spend money on unnecessary purchases, carrying balances from month to month because you don't have enough cash to pay your bill in full. This is one of the easiest ways to run up expensive credit card debt.

Many people rationalize such behavior, convincing themselves that their spending is justified because they are earning cash back on their purchases. However, the interest you will have to pay on your unpaid balance will greatly exceed any funds you receive in the form of a cash back rebate.

Responsibility is the Key

The key to benefiting from any type of credit card reward program is to make responsible use of the credit available to you. Make sure you understand the terms, and be certain that the cash back program that seems to be so appealing isn't going to end up costing you money in the long run. Credit card debt remains a sure way of ending up in the debt trap, if not controlled properly.

For more on debt consolidation see below (these articles should be links back to other articles on the site.)

-Credit Card Debt Secrets
-Steps to Eliminte Credit Card Debt
-Debt Free Living
-Lowering Your Debt For Life
-Are your debts keeping you awake at night?

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