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Most of the credit card companies have come up with cash back as well as reward point schemes. You can avail huge discounts with the help of cash back and reward point cards. There is a facility for you to donate these reward points to charity organizations. Some cards also offer the facility to transfer the cash back to your savings account as an investment. But above all you should be careful and watch out the interest levied on these cash back cards. The interest charged on these cash back cards are heavy compared to the interest on other ordinary cards.
Cash back credit cards do not have many restrictions as other reward cards have. You normally get a discount of one percent to two percent on your credit purchases. The cash back rewards come in different forms like discounts on gas purchases or other furniture purchases. Here you have to worry about accumulating a given number of reward points in order to make use of these discounts. Most of these cards do not have annual fees charged unlike the reward cards where the annual fees gets adjusted with the discount you earn. You are able to get back a percentage of what you had spent for the purchases made. You have various methods of getting back this offer. You could get back the cash by means of statement of credit or you could ask for a check or you could ask them to directly deposit the amount into your savings account.
Cash back companies help you to make use of the discount amount in any of its retailers. There is no limit to the amount of discount that you can earn since the more you purchase the more discounts you get. There are some companies who even offer up to five percent discount on purchases made.
Reward points will have to be accumulated for a certain limit and once you are eligible you can gain a lot of rewards right from airfares to merchandise and other great offers. You will be able to get more rewards than the normal cash back. The only drawback here is that it has a lot of restrictions. There are definite periods before which the reward points have to be collected. Also these cards come with annual fees. So whatever reward points or discount that you earn almost gets adjusted with the annual fees. There are also restrictions on the stores that offer these rewards. Some discounts are given in such a way that you can redeem it only at the same store or chain of stores.
Looking at both these type of discounts, you will find that cash back discounts are more beneficial than the reward points offered by the credit card companies. With the cash back cards you have the facility to spend the cash discount immediately as against the reward points which need to be accumulated and only after reaching a target can be redeemed as rewards.