If your credit card offers you cash back, you’ve probably noticed that the percentage rebate varies by category.  For example, American Express advertises 5% cash back on gas, groceries and drugstores, and 1.5% cash back on everything else.  Discover offers 5% back on gas and groceries, among other categories.  Citibank actually offers 2% cash back on “rotating categories”. 

Turns out, “Gas and Groceries” are habit-forming.  While they may make up a small part of your household budget, you probably purchase them one, twice or even three times a week.  And the card companies are hoping that you’ll get used to pulling their card out for the small purchases, so that when it comes for a big purchase, their card will be “top of wallet.”

I don’t think this falls in the “dirty tricks” category.  In fact, you can use it to your advantage.  You can maximize your cash back by making sure you put these small purchases on your card.  And you might consider carrying multiple cash back cards to maximize your rebates when one has a higher rebate on a category.

There have been quite a few commercials for Bank of America cash back credit cards lately, so I thought I’d do a quick review.

The “BankAmericard Cash Rewards™ Visa Signature® Card” has no annual fee and 0% APR for the first seven or 10 billing cycles on purchases and any balance transfer made within 60 days of opening the account.

There is a 4% balance transfer fee if you choose to transfer a balance, which is pretty much right in the middle of the industry standard 3-5%.

But obviously the biggest draw tied to this credit card is the cash back rewards program.

During the first six months following the opening of your account, you will earn 3% cash back on purchase transactions made at eligible gas, grocery and drug store merchants.

After that promotional period, you will earn 1% cash back on such purchases.

1% Cash Back Rewards, No Limit

On all other purchases, you will earn 1% cash back, which is their simple approach to cash rewards.

There is no limit to the amount of cash rewards you can earn, and you can redeem them when you’ve earned as little as $25.

Additionally, you will receive a 25% bonus when you redeem $300 or more in cash rewards, which is an incentive to wait.

You can also earn a $50 statement credit if you make any combination of purchases totaling at least $50 within the first 60 days the account is opened.

The cash back rewards can be credited to a checking or savings account, or mailed to you in the form of a check.

So if you spend $1000 a month on the card, or $12,000 annually, you’d earn $120 cash back plus a $50 bonus if applicable.

And potentially more if you used the credit card as gas stations, supermarkets and drugstores during the first three months.

It’s actually a pretty good deal if you aren’t a big spender, and if you hold out for the 25% bonus after earning at least $300.

But I still think the Blue Cash from American Express is the best cash back credit card for those who spend a bit more monthly, as it offers 1.25% cash back on all purchases and 5% cash back on gas/groceries/drugstores once you surpass $6,500 in spending annually.

Nationwide personal income decreased $16.8 billion, just 0.1 percent, in September from the rate observed in August, according to the latest figures from the Economics and Statistics Administration. Meanwhile, disposable personal income dropped $20.3 billion, or 0.2 percent. In addition, personal consumption expenditures climbed $17.3 billion, or 0.2 percent.

This came after an August that saw sizeable increases in income and disposable income, as well as a slightly sharper jump in personal consumption, the report said.

This marked the first decline in personal income since April, the report said. Read full article…

It looks like regulators at the Federal Reserve Board were listening when consumer groups and others lambasted a new database of credit card agreements that debuted in May 2010.

Under the Credit Card Act of 2009, all U.S. credit card issuers with more than 10,000 open accounts have to submit all of their consumer credit card agreements to the Fed every quarter. The Fed, in turn, must post the agreements on the Internet so that consumers can have a one-stop place to see and compare credit card terms. At least, that was the intent.

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Low interest rates are the most common selling point used by credit card companies to solicit new clients. Having a low interest rate is certainly appealing, and preferable to having a high one. However, it’s important to remember that credit card companies primarily generate their profits not only from interest, but also from fees. Thus, if the company is not making a lot of money in one way, they may be compensating with the other, by charging unfair fees. The following are a few  commonly overlooked disadvantages associated with low interest credit cards.

Reading the Fine Print

Checking the card’s terms and conditions is imperative when applying for a card that supposedly offers some of the lowest rates around, because in most cases these amazing rates won’t last forever. While

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