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What is a cash back credit card?

A cash back credit card gives annual rebates or gives back money to the card holder based on how much have been purchased with it. This type of credit card is suitable for those who rarely use cash in their transactions. The rebate is computed as a percentage of the total amount charged to the credit card in a year. Usually, rebates are between 1-2%. Some can even go as high as 3%.

Are rebates always in the form of cash?

Strictly speaking, cash rebates should be in the form of cash. But now that card companies are diversifying, rebates may now come in the form of gift certificates and discount coupons. This somehow blurs the line between and among the different types of credit cards mentioned in the first paragraph of this article.

Some cash back credit cards offer upgrading of membership status which allow their members to more discounts and gifts during anniversaries and holidays like Christmas and birthdays. Moreover, some credit card companies also have partnerships with other consumer products that entitle their members to added product discounts in future purchases.

What banks offer cash back credit cards?

There are many banks that offer cash back credit cards in kind. They usually have a rewards program for members wherein card holders receive gifts and discounts courtesy of partner product companies; discount coupons to hotels, restaurants, specialty stores; and travel miles for non-travel purchases. Below are some banks that offer cash back benefits.
1. Citibank
2. Chevy Chase Bank
3. HSBC
4. Royal Bank Avion (Canada)
5. Standard Chartered Bank

Are cash back credit cards offered only by banks?

No. Since business establishments are innovating their services and benefits for their customers, some of them offer cash back to their loyal customers e.g. Discover Card (Discover Magazine). Aside from giving book and magazine discounts, airline miles are also offered by Discover Card. Big grocery stores such as Krogers, Wal Mart, and Bi-Lo offer cash back but in the form of cash certificates and discount coupons.
How does one get a cash back credit card?

Since almost all credit card companies (e.g. banks, stores, airlines) offer cash (or in kind) back benefits, all that has to be done is to file an application in any of their office or stores, or signup online by visiting their web sites. Just be a word of caution for online applications, make sure that the transaction is made through a secure internet connection since identity theft has become rampant with the advent of credit card use.

A Case Of Lease Vs. Home Mortgage Loan

With the high cost of living in most States, more and more people have started to view renting a dwelling place as a very practical option to fulfill the fundamental need of shelter. Renting, after all, will eat up but a portion of our monthly income, compared to buying a home which would entail spending higher savings. Additionally, urban centers do suffer from swindling living space, hence, rentable suites and quarters have become the choice of most city dwellers.

Of course, some people could choose to buy a house, but only if they have the funds for the same. And considering the costs of real estate these days, this option is clearly not for everyone.

But besides renting and buying a house, here is another option: that of securing a home mortgage loan. A home mortgage loan would allow the debtor to purchase a house with what he could afford, and the remainder would be provided for the by the lender with the deed of the house as security. The debtor would then have to pay the amount that was lent by the creditor in stated installments. Upon fulfillment of the obligation, the debtor would be freed from his debt and acquire exclusive ownership of the deed of the house.

Pending full satisfaction of the home mortgage loan, the debtor can use the house as his own. He could live in it, beautify it, arrange its interiors, buy furniture and household items to make it functional, and make alterations as he sees fit. Its as if he would own the house already.

So, when it comes to beneficial ownership, home mortgage loan agreements and lease contracts would seem to be in equal footing. Both would allow you to use the house during the effectivity of the agreements. Both would give you the rights of an owner during the same period, save the right to alienate the same for whatever purpose.

But then again, many people say that compared to renting, acquiring a home mortgage loan would be more costly. Aside from the down payment and the installment plan, these people view the interests (usually 12%) that have to be paid as something that is burdensome, compared to renting a home subject only to the periodic rates.

What these people fail to realize, however, is that in renting a home, you will pay the landlord a 100% interest! Look at it this way: by the end of the lease agreement, you wont even get to own the house. Neither will you own any interest in the house. You would be left with nothing, and would have wasted all those months in all those years of paying your rent.

Whereas with a home mortgage loan, it can be treated as a rent, though not in form but in substance. The periodic installments can be viewed as the equivalent of the rent you have to pay every month. And at the end of the loan, when your debt has been satisfied, you get to keep the house for yourself.

So which would be the better option under this light? A system that would ask you to pay every month and leave you with nothing at the end of the agreement? Or a system that would ask you to pay every month, and give you the deed to the house after ull satisfaction of the loan?

The answer is quite clear, isnt it?

Truly, a little long-term planning would reveal that securing a home mortgage loan would be the wiser choice. It can be considered as an investment the rewards of which you could reap immediately, and the full benefits you could attain upon satisfaction of the obligation.

The Advantages And Disadvantages

There is no certainty about our financial future. No matter how hard we strive, no matter how much effort we invest to secure stability for ourselves and our families, there will always be some variables that will come to play and disrupt whatever expectations we have of an obligations-free existence.

Most of us would be left with no recourse but to enter into a loan agreement with a lending institution at one point. Much as we would try to protect the integrity of our budget plans, there are still some things that are beyond our control. Emergencies for example, that necessitate expenditures way above what we have planned.

And when these loans become due and demandable, yet we dont have the means to pay for them, what are we to do? Should we forever avoid the collection agents that would be sent by the lending institution? Should we allow it to ruin our credit score and jeopardize our ability to be granted another loan elsewhere, or worse, our chance to be employed in a wonderful job?

Thankfully, when the chips are down come the time that we have to settle our financial obligations, there exists another option. We could choose to refinance our existing loans. Refinancing a loan is quite simple in principle. All you need to do is to secure another loan to pay off the old one. The end result is a new loan with an extended maturity date.

There are a lot of advantages that can be derived from loan refinancing. Lets take a look at some of them.

* Loan refinancing, as we have previously discussed, would extend the maturity date of your previous loan. This is because the new loan would govern when the same would be due and demandable, and the previous loan would be considered extinguished for all intents and purposes.

* The new loan can have a lower interest rate than the previous one. This would make things easier for your budget. You wont have to endure a rapidly ballooning obligation as the new loan would be less onerous to comply with.

* Debt refinancing can also make your payment schemes simpler. For example, you have many existing loans. Instead of dealing with multiple parties, you could get one loan to pay them off, and youll only have the new loan to contend with.

Dont get your hopes up for debt refinancing that quickly, however. This process is not without its share of disadvantages. Lets take a look at them so that youd be guided properly in determining if this route is the right one for you.

* Paying a smaller interest rate for the new loan is not guaranteed. Sometimes, the accumulated percentage for the new loan would be bigger than the sum total of the interests you have been paying for the old loan or loans.

* It would be difficult to get a new loan if you have existing loans to contend with. You would have to find a lending institution that specializes in refinancing subsisting loam or loans. Existing loans leave a mark on your credit history, and many lending institutions would be wary of the same.

* And in the event that you would find a lending institution that would be willing to refinance your existing loan or loans, chances are, it would consider you as a high risk investment, what with the inability you have shown of failing to pay off your subsisting loan or loans. As such, a new loan may be granted only if you would assent to relatively high interest rate.

Debt refinancing, however, remains a viable option, for the extension of the due date of the existing loan or loans more than anything else. If you feel that youve reached the end of your rope and debts which have matured are adding to the weight youre carrying, then it might be wise to consider refinancing the same at the soonest possible time.

Otherwise, do try your best to pay off your existing loan or loans, as this would be the safest way to preserve your good credit score.

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A lot of people in this day and age find it more practical to rent a house rather than buying one. With the rising cost of living in this part of the world, it is easy to see where they are coming from. Renting does seem to be the more practical option, instead of laying out a huge sum of money to buy a home. And since mobility is sometimes demanded by ones career, renting a home becomes an even more lucrative option.

But a deeper scrutiny of the reasons behind renting a home would reveal that with a lease, the lessee would always end up the big loser. How, you might ask?

Well, lets put it this way. There is no such thing as a perpetual lease. At some point, the rent contract would expire, either by force of the agreement or by rescission of one party. And when that happens, what will happen to all the monthly rental fees you have paid the landlord? None! You wont be able to redeem them, and they will never redound to any equity you might have on the house you have leased for the longest time.

In effect, youre actually paying the landlord a 100% interest rate.

What is a better alternative to renting a home?

Home mortgage loans are quickly gaining prominence as the option of choice for many families. A home mortgage loan is, in its essence, a loan for the purchase of a house. Youd have to pay the down payment, but the lending institution who would grant you such a home mortgage loan would pay the balance of the purchase. Thereafter, you would have to pay the lending institution in stated installments. These installments are meted an interest rate, and its just a matter of looking for a loan package with a favorable interest plan for you.

Does this mean that you would have to wait for the time when you have paid off the loan before you could use the house? Most definitely not! You could start using the house immediately, even while youre in the process of paying off the said home mortgage loan. A home mortgage loan is actually called a rent-to-own arrangement by some quarters, only, it passed through a middle party, namely the lending institution.

Yes, you could indeed use the house even during the pendency of the loan. You could decorate the interiors any way you see fit. You could paint the fence or even the facades of the home to suit the color scheme you want. You could make ornamental and necessary improvements on the house as well.

As security for the home mortgage loan, the lending institution is expected to keep the deed to the house. This means that, as a general rule, you cannot alienate the house or assign the rights to the same to someone else. However, just because the lending institution holds the deed to the house, this doesnt mean that you wont be able to partake of any interests in proportion to what you have paid. With every installment you satisfy, your equity to the house increases. Equity merely pertains to the alienable rights you have over the property. Since full equity cannot be granted until full satisfaction of the debt, you could only alienate the portion of the house which you have successfully paid for.

This is quite essential when you want to avail of a home equity loan. A home equity loan is simply an amount borrowed with your equity of the house under a mortgage loan as collateral. You could use a home equity loan to pay off the home mortgage loan, or to purchase or pay off other needs or wants.

With all that is going for it, a home mortgage loan is clearly the route to take. If you wish to stop spending money for short-term usage, seriously consider a home mortgage loan. The long term benefits would surely be worth it.