Cash back credit cards appear to be a lucrative deal to many of us. They come with cash back rebate incentives or rebate schemes. A cash back credit card gives you back a percentage of money that you spend on your card.

Cash back credit cards generally require good credit rating for approval. The credit card issuer requires the following information:

• Your bank current account number
• Your bank sort code
• Your present address in UK
• Your previous address
• Legal proof that you are above the age of 18 years

Besides these, your good credit rating is also essential for getting a cash back credit card. You can build up a good credit rating by paying your credit payments on time.

Advantages of Cash Back Credit Cards

The advantage of a cash back credit card is that when you pay your credit bills on time you not only save the interest fees but also earn points for free merchandise, trips or rebates.

Dangers

However, you must be aware of the other side of the picture too; a cash back credit card can give you a false sense of security and you may tend to spend more than your means. If you plan to use a cash back credit card you must be prepared to pay your credit card balance off in full every month. If you fail to clear you credit card balance then you will begin to incurr interest charges that will defeat any benefit that you have gained from using the cash back feature.

If you are not able to clear your balance every month then you may be better advised to apply for a low rate credit card or either a card with a 0% introductory purchase rate offer. You should find that these cards may serve your interests better.

It pays to remember that credit card companies are in the market to make profits — often at your cost. Therefore, always read the fine print carefully or seek professional advice before going ahead with a cash back credit card.