When you have a Cash Back Credit Card, it is so easy to assume that each time you use the Card, you will get cash back. But that is not how it works.

Here are five important things you need to know when you use your Cash Back Credit Card –

1. Different Cards work differently

There are a variety of Cash Back Credit Cards and they all work differently. One is a flat tiered card which earns cash on any kind of purchase. One is a Bonus card where the categories that earn the most keep shifting. It could be fuel today, and change to dining tomorrow. Some cards have permanent tiers – some categories earn higher cash back and some, lower amounts. So different cards work differently.

2. You don’t earn a lot of cash back

Yes your Cash Back Credit Card does earn cash, but do not assume that you can retire with the money you get back on it. While it mainly depends on the bank that issues the cards, the percentage of cash that you get back can be anywhere between 1% and 6% of your purchases and not more.

3. To enjoy the full benefit of Cash back, you need to make full payments

When you have a credit card and you get your monthly statement, it might be tempting to pay only a fraction of the total amount that is due and carry forward the rest into the next month as revolving credit. While this might reduce the outflow from your wallet at that time, you will end up paying interest on the amount that you carry forward. And more often than not, the interest that you pay will far outweigh any benefit of getting cash back. So make sure you pay your bills in full to enjoy your cash back to the fullest.

4. Different Cards have different rules

Not all Cash Back Credit Cards are the same. They each work differently. Some Cash Back Cards expect you to accrue a certain amount of cash before it can be credited to you. And the modes of getting the cash back on card varies from bank to bank. Some can give it to you as a statement credit. Some can give you vouchers to use at certain stores. Some can let you deduct this credit out of a bill that you pay. It all depends on the Bank that issues the card and the rules that they make. So make sure that you read all the literature carefully to know what will bring you the most benefit.

5. Be wise in your spending

As with the use of any Credit Card, it does not make sense to live beyond your means. It’s never a good idea to incur a huge bill simply to earn some cash back, and buy things you don’t have use for. It is more important to stick to the lifestyle and budgets you are accustomed to.

Spend wisely and slowly chalk up those numbers that’ll let you enjoy the cash back that comes your way as a bonus!

Keep these five important things at the forefront when it comes to spending with your Cash Back Credit Card. That way, you will remain debt-free and get the most out of your Cash Back Card.