Like when a card says it offers a percentage of cash back
Wth does that even mean? If I borrow 200$, then I pay back 200$ or more, so what is cash back?
In: 5
You have a 2% cash back card. You spend $100 on your credit card. The credit card company puts $2 into a little account for you to redeem later.
They can do this because it encourages you to use your card more, and they charge the store a fee to process the payment, probably around 3%. There is also a percentage of people who will not pay it off, and have to pay interest at anywhere from like 5-25%, so cash back cards are really only good for financially sound and responsible card users.
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