Credit card customers are increasingly turning away from card “reward point” programs. With money tight in the vortex of the Great Recession, card customers would much prefer cash-like options.
Card companies are getting the picture, and responding with new cash-back-oriented card deals in early 2010. Check out Discover’s (Stock Quote: DFS) CardBuilder deal, which places a big priority on cash-back bonuses and on-time payments that can trigger cash payouts.
The Chase Freedom credit card, from JPMorgan Chase (Stock Quote: JPM) (which we wrote about yesterday in Deals of the Week), is also getting aggressive. Chase has hiked its cash-back percentage from 3% to 5%, effective March 15.
On average, cash-back credit cards pay about 1%-2% on card purchases, according to the Creditcards.com. Card companies usually cut a check for the amount of the cash back and ship it off to you in the mail. There are usually no restrictions on how you can use the cash-back money, although companies like Chase try to steer you to favored retailers via its “seasonal” cash-back programs (for example, if you buy a lawn mower at Home Depot (Stock Quote: HD) in May this year, you can earn the full 5% cash back from Chase. But if you buy a pair of skis at Sports Authority this May, that falls outside the border of the bank’s seasonal cash back program.)
How can you get in on the cash-back craze? Start with your own credit card carrier. Call them and see if there’s an option to switch from your current card to a cash-back card. If they have one, it shouldn’t be a big problem.
If you card issuer doesn't have a cash-back card, then feel free to look for a new card company. Chase, Discover and American Express (Stock Quote: AXP) are all aggressively marketing such cards right now.