Part of taking charge of your financial life is actually reading and understanding the terms of service on the financial products you use. Like, for instance, credit cards! Now the latest marketing sensation in the credit card universe seems to the 5% Cash Back Rewards cards. Wise Bread, my new favourite source of financial wisdom, has a terrific post calling BS on these 'reward cards'. How often do you actually get 5% back? Nearly never:
Interchange fees (or "swipe fees") in the U.S. are generally around 2-2.5%, so credit card companies would actually lose money on every transaction if they paid out more than 2-2.5% to you in the form of rewards.
Whether it's air miles or introductory rate or other rewards, KNOW what you're really signing up for.
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