You’ll rack up grocery and gas rebates much faster on the Preferred card than the standard Blue Cash card, but some of those rewards will amount to payback for the annual fee. And after you’ve spent $6,000 on groceries in one year, both the Preferred and the Everyday card drop you back down to 1 percent.
Before getting a revolving credit card, be sure you know the interest rate — and what it could become. The rates on these cards may seem low, but they could well be promotional rates that will soon soar. The Chase Freedom card, starts with a 0 percent rate for 15 months then morphs into a variable-rate card whose interest rate could be as high as 22.99 percent.
Read the fine print. All cash-back cards come with rules about expirations, forfeitures and redemptions. For example, if you go 18 months without using your Discover It card or miss two consecutive minimum payments, you’ll lose any accumulated rebates you’ve earned.
With some cards, you might wind up leaving money on the table when you’re ready to cash in because they only pay rebates in $25 or $50 increments. Irregular amounts, like $19, must remain in your account until they rise to the required minimum for payback.
Click here to find out how to choose the right cash-back card on Next Avenue.
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