Many people like to choose the credit cards that offer a certain percentage of cash back after making purchases. There are many companies and just about all of them offer a cash back credit card among all the other credit cards they offer. Some people who already have cash back cards end up with hundreds of dollars cash back from their card at the end of the year. How much you get back depends on how many purchases you make with your card.

Why are cash back credit cards more popular?

It seems that many people find that cash back cards are better than those that just give you rewards like free air miles. This is mostly for the obvious reason that you can get whatever you want with free cash but you cannot get whatever you want with air miles. You have to, of course, use your air miles when you are traveling by plane. Let’s face it, which would not rather have free cash than reward points or air miles that you may only be able to use at certain places?

How do you get your cash back?

The way you get your cash back depends on the specific card you get, different companies have different methods of giving their customers cash back. Also, with some companies you may get cash back for a certain type of purchase but not for a different purchase. Some companies also give more percentage back on everyday purchases like groceries and gas than they do on other purchases. You have to read the fine print to really understand how the program works.

What are some things you need to watch out for?

There are a few things you need to watch out for when choosing your cash back credit card. First of all you need to look over the terms of service and all the fees before you decide on a specific card. Certain cards that offer cash back will not actually be worth your time because they have certain fees that will cancel out the cash back. This means that you will be getting a percentage of your cash back but you will then be spending it on the extra fees. Annual fees and monthly rates could be the fees that really get you in the end.

These are three things you need to consider when you are getting a cash back credit card. You may find that a cash back credit card is not right for you and your situation at all. Once you read all the fine print and make sure everything is in order and you are sure that the card you choose is the one for you, you will be on your way to earning cash back in no time.

Many people don’t realize this, but one very simple way to start saving money very quickly is to actually start tracking where you’re spending money on a day-to-day basis. Pennies add up. And every time you stop for a quick coffee or soda, pick up an extra magazine, or even buy a pack of gum or some candy, it takes money out of your budget. Most people have no idea how much money they actually spend by buying a little bit of this and a little bit of that every day.

In fact, if you make a habit of always paying things with paper bills but never any change, and just start sticking the change in one spot regularly, you may be surprised at how fast that money adds up.

If you need to reduce your spending bill, then you need to get a handle on where your money is going. And the only way to do this is to write it down consistently. Save every receipt you get, and sit down every day with those to add up how much money was actually spent that day. You may be surprised to find, that even though you only spend a little bit here and there, the total amount is much more than you expected it to be.

Keep track of every expenditure you have. When you pay a bill, write down the exact amount you paid. If there were any additional expenses added to the bill such as credit card fees, you need to note those down too.

If you track where you’re spending money every single day, and track exactly how much you’re spending down to a penny, you will start knowing without a doubt where all of your money is going. Once you have an idea of where the money is going, it will then be much easier to sit down and create a spending budget for your household. You may choose to create a budget for each individual person as well as the house in general, or you might just want to create a general family budget which is separate from the necessities budget for the house.

Trying to make a budget without first knowing where all of the money is going though will not work. In fact it will just be an act of frustration. Because money will be flowing out, or it will be short in one area or another, and you won’t be able to understand why.

By first writing down everything you’re spending you can get a much more accurate picture of where the money’s going. And you can also see where you may have some bad financial habits, so you can start working to correct those problems while also getting your budget working much more efficiently for your family.

The other day I received an offer to consolidate credit card debt. The “package” was for $50,000 at 7.99% APR or so I thought! I do not need to consolidate any debt; especially on credit cards… any charges made get paid off each month. Normally, offers this go right into the trashcan, but this time for whatever reason I decided to read the complete offer.

Most people I talk and counsel, never take the time to read the fine print on debt or credit card offers. They head straight to the “sign me up” part to fix their money problem.

Let’s look at the details shall we!

• No Annual Fee
• No application fee
• No collateral required
• No payment for 3 months*
• One predictable monthly payment

The first 3 items come to no big deal. Why? First of all the company already did their work by basically “pre-qualifying” the applicant (me) limiting their credit risk or they would require some type of collateral. No annual fee or application fee shows how generous the company is! If the consolidation loan offer is accepted they will make plenty over time on interest.

No Payment for Three Months

Here’s where reading an offer becomes a requirement. Although NO payments for 90 days – interest on the amount would accrue over the 3 months. Why charge an annual fee or application fee when 90 days covers both.

One Predictable Monthly Payment

This may appeal to some consumers by giving them an opportunity to know up front the amount owed each month on their consolidated debt at what looks like a reasonable APR – 7.99%. However, the details of this financial contract give the company the reserved right to change the APR at their discretion. So much for a predictable payment amount!

Then the kicker:

“if you fail to pay the minimum monthly payment by its Payment Due Date on any two occasions within 12 consecutive months, we may increase your APR up to a Default APR of 27.99%.”

In the beginning what looks like a reasonable offer – just got ugly.

Let’s assume you borrowed the $50,000, 3 months later you lost your job and made payments but late. One day you open the mail finding the interest rate skyrockets to 27.99% APR.

Paying $750 month at 7.99% would take 89 months or 7 years, and 5 months to pay the consolidation loan off. When the rate goes to 27.99% the monthly payment would move to $1340 per month to pay the debt off in the same 89 months.

Over the 89 months $16,316 will be paid at 7.99%. At 27.99% the interest jumps to $68,724 over the life of the debt repayment.

Moral of the story!

Read the fine print, run the numbers and understand completely your financial position before making any financial moves. One stupid signature could place you in deeper debt!