Typically in the past, cash back credit cards were giving cardholders meager rebates of 1% on all or most of your purchases. However, if you check some of the reward programs these days you will see some offers giving back 3-5% rebates on many purchases (i.e-gas, groceries, and utilities).

Because these credit cards usually charge higher interest rates, rewards card tend to be the most suitable for consumers who pay off their entire balance every month. Cardholders who like to carry revolving debt would be wise to choose a card with a low interest rate. The majority of all reward card programs are usually not appealing for these type of cardholders.(Possible exception: Discover Motiva Card- see below)

Relatively, many cash back reward programs are usually only appealing to big spenders because they cap the rebate amount you can receive in any month and/or in a year, and a few pay back a relatively small percentage until a certain spending level is reached.

In general, try to stay clear of reward cards who try to tack on annual fees on your statements. Also, be weary of reward cards that expire if they are not used within a specific time frame, or make it difficult to redeem points on the card. Unless the reward programs have especially attracting features (like a high rebate of 5%), I would bury these programs in the sand…

Now for the good news!! I have found and signed up to a few cash back reward cards which offer attractive features and no annual fees(unless offers have recently changed as of today….) Take at look at the cash back rewards cards below, and tell what you think. Also, if you have chance you should check cashback offers at MyMoneyBlog. I have found great offers and information on his site.

Blue Cash from American Express pays 5% cash back for grocery store, drugstore, and gasoline purchases after you spend $6,500 within a year, and 1% of any given purchase personally, I have been using my Blue Card for a few years now, and their program is the most reliable.

American Express One Card- This program only gives you 1% cash back of your purchases, but it places your cash rewards directly to a savings account, which pays an annual rate of 2.75%(rate as of July 30). Also, an additional $50 is place in your savings account when you make your first purchase. The OneCard hits you with a $35 annual fee, but that is waived in the first year (just make sure they do).

Discover Motiva Card-Now here’s an interesting concept, the Motiva Card gives back the cardholders seventh monthly interest payment as rebate each time the cardholders makes six consecutive monthly payments where a minimum payment is due. So I wouldn’t sign up for this card if you like paying off your balances every month. This card is more suitable for cardholders who do not pay off their card in full every month, and carry a balance. The Motiva Card currently charges a 4% APR(annual percentage rate) for the first 6 months and 12 months on balance transfers. After the introductory period, the APR goes up from 11% to 19%.

Chase Freedom Visa Signature Card- Last, but not least is the Chase Freedom Visa Signature card that gives 1% cash back on most purchases and 3% on the purchasing categories the cardholder spends the most money in any given month. The main categories include gas, groceries, utilities, department and drugstores. For more information visit the Chase credit card site.

A debt consolidation loan is typically a loan of a large amount that you can use to consolidate all your existing credit.  The purpose of this is to pay off all your outstanding debt so that you have just one loan left to manage.

People can have lots of small loans, credit cards or purchases made on credit.  Smaller loans typically have higher interest rates so that lenders make enough money during the repayment period so they can make a profit from giving someone credit.  Consolidation loans are bigger so they should have a lower interest rate in the same way as a mortgage loan for a house.

If you have a lot of small loans then applying for a debt consolidation loan may be the best option for you.

What are the benefits to getting a debt consolidation loan?

A debt consolidation loan can be used to pay off all you existing loans.  Usually a debt consolidation loan will have a lower interest rate.  This can also be a great way to bring several loans together so that you are accountable to one lender rather than four or five at one time.  You will also make only one payment rather than 4 or 5 payments to different creditors.  This will help if you struggle to pay all your loan repayments every month because if you can get the right consolidation loan with a lower interest, then this should help you stay within budget every month.

What are the disadvantages to getting a debt consolidation loan?

The repayment period is usually longer so you will probably be paying more money in the long term.  The other problem with debt consolidation loans is that it is typically successfully pitched to people that are struggling to pay their repayments.  This means you have to read the small print very carefully to make sure you are not going to get ripped off by accepting bad terms and conditions.  This may mean that the interest and repayments are structured in such as way that if you want to settle the loan earlier, you end up paying higher interest rates and fees that will increase you total debt to repay.

Things to remember

Debt consolidation companies have to make profit just like everyone else.  The term you have to pay off your loan may be a long term commitment that doesn’t suit your life-style. So it is worth considering whether cutting back to pay for your current loans is better than spreading payments out over a longer time.

Because consolidation loans are much bigger loans you have to be more careful with the small print.  Signing up to a high interest rate could mean you end up paying a similar amount to what you were paying but for much longer.  You must make sure the numbers add up for you.

Remember not to make hasty decisions in signing up for a debt consolidation loan.  If you have a great credit history and a lot of credit on poor interest rates then it may be a good solution.  However, if you have bad credit then reacting to your finances with a short term goal may just be setting yourself up for big debts in the long term future.

All in all debt consolidation loans can help you get our debt faster, and start you in path of financial independence.  However, just read the fine print and perform due diligence on every debt consolidation offer.