We've all seen the funny commercials with Jimmy Fallon talking about the Capital One Cash Card that offers 50% more cash back than other cards that offer cash rewards. The commercials are funny, especially the one with the baby who does not want 50% more cash. Have you ever wondered how the 50% more cash really works?
First, you need to understand how cash rewards cards work.
Cash rewards credit cards actually pay you cash when you use the card. Usually, the reward amount is 1% of the amount of your purchase, which means if you charge $500, your reward is $5.00. Some rewards cards offer you higher percentages reward for buying certain categories of items, or shopping at selected retail outlets and online retail site. Many also have an introductory award. For instance, Capital One will give an additional $100 spending bonus if you charge $500 in the first three months you have the card.
So how do you get your cash?
In the case of Capital One, your cash rewards go into a separate account with the Rewards Center. Your statement will show you your balance. You can access your cash at any time by calling the Rewards Center. You can also access your Rewards Center account online. You can request a check, or a gift card, and it will be sent to your address within thirty days. This seems like a long time to wait for cash you have earned, so the better option would be to have your cash rewards credited to your charge account. This only takes 5 – 7 days. It really is a better option, because you can buy something with the card, and then use your cash rewards to pay the bill. The purchase will earn you more cash rewards! You can also set up a threshold, which is an amount you set up, so that when your cash rewards reach that amount, they automatically redeem by sending you a check, or crediting your charge account.
Another thing you want to consider is that you can only redeem your cash rewards if your account is in good standing. This means that you must not exceed your credit limit, or be late with a payment. Your cash rewards will never expire, and there is no limit as to how much you can earn in cash rewards.
So where does the 50% more cash come in?
Well, Capital One gives you an additional 50% bonus on the cash rewards you earn throughout the year. This bonus is awarded to you every year on the anniversary of the account being opened. If, in the first year of having the account (and paying your bill on time) you have earned $280 in cash rewards from your purchases, you will then earn an additional $140 in cash rewards! Not a bad deal at all.
Right now, Capital One is offering an introductory interest rate of 0% until February of 2013, which includes balance transfers. Be careful. If you don't keep the account in good standing, the rates will probably go up. But overall, if you manage the card properly, it has many good benefits.
