What Is Cash Back? Hint: It's Not Free Money
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Cash back refers to a credit card that refunds a small percentage of money spent on purchases. You can also sign up through cash-back sites and apps.
Cash back, or cashback, involves receiving a percentage of money spent back as a benefit on credit or debit cards. This can be redeemed as actual cash, applied to a credit card bill, or received through various methods. Cash back is a popular feature offered by many card issuers since the late 1980s, encouraging spending and customer retention. Additionally, cash-back apps and websites allow consumers to earn money on purchases. Notable programs include Rakuten, Ibotta, and Shopkick, each offering different benefits and partnerships with various retailers. While cash back can be a valuable incentive, it's important to be aware of potential drawbacks like high APRs, delayed rewards, and earning caps. The choice between cash back and other rewards like airline miles depends on individual preferences and spending habits.