Do you have excellent to good credit and are looking to actually make money with your credit card? Instead of paying the bank interest? Looking for the best cash back credit card deal? Looking for highest cash returns? Then you are in the right place. We will consider here two reasons why cash back is becoming the preferred way of compensating the consumer for their purchases by the credit card company. The reasons are: First, consumers are beginning to value cash more as their spending habits have changed. Second, in view of the Quantitative Easing policy of the US Federal Reserve, banks have (as they always had) access to easy money that comes with low interest loans, or no interest at all. Let's look how this works.
Consumers are showing more appreciation for cash
In the past, credit cards offering travel rewards, miles, and shopping rewards, were quite popular. The times have changed.
Overall, over the past two years, US consumers have reduced their expenditures and increased their savings rates. They have simply changed their ways from being big spenders to becoming shrewd and discerning consumers. The savings rates are up from 0% in 2007 to 6% just a few years later. Some consumers are either saving because they fear that the economy of extended elevated unemployment will affect them. The others see the values of housing and other assets diminish and are holding onto the dollar as it will buy more in a year or two.
So earning cash on your everyday purchases through a highest cash back card is attractive to many. Spending card rewards on buying stuff that folks don't really need that much, is not.
Banks have easy access to cheap cash
Through bailouts of the largest US and other banks, and through Quantitative Easing policy of the US Federal Reserve, banks have easy access to cash loans from the Federal Reserve. So offering cash back reward cards plays into that fact beautifully. Why set up travel rewards, or household item purchase rewards, when access to cash is so much easier. Plus the consumer prefers cash rewards too, see above!
Through a confluence of the above two factors, it seems that highest cash back credit cards are poised to further gain popularity both with the shoppers and the credit card companies.