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Unlimited cash back rewards, explained
Unlimited cash back refers to a rewards program where individuals earn back a percentage of their purchases as cash rewards without any caps or restrictions. It provides a consistent way to earn rewards on spending, often across different categories.
Explore the pros and cons of unlimited cash back rewards programs.
How do unlimited cash back programs work?
Unlimited cash back programs let consumers enjoy the convenience and simplicity of earning rewards on every purchase made within the unlimited category or guidelines. Some unlimited cash back programs or credit cards may have an unlimited offer across all purchases or rotate categories and products that apply to the unlimited offer.
For example, the PayPal Cashback Mastercard® allows people to earn unlimited 3% cash back1 on purchases made through PayPal. Alternatively, a rewards program like PayPal Rewards allows users to earn limitless cash back when shopping with PayPal by adding reward offers to their account.2 These offers may apply to specific stores or retailers, products, and rotating categories, but offers may fluctuate or only be available for a specific period of time.
Unlimited cash back reward programs generally don’t have any cap to cash back earnings, meaning customers can continue earning regardless of whether they’ve earned high amounts of cash back already.
However, keep in mind that there may be associated terms such as minimum spending requirements, eligibility criteria, or annual fees. Just because there is potential for cash back on spending, it's important to practice wise money management and only spend within one’s means.
Potential pros and cons of unlimited cash back
It’s important to evaluate all factors when considering unlimited cash back programs, including potential advantages and disadvantages. Some potential upsides include:
- Simplicity: Some unlimited cash back programs may offer straightforward rewards guidelines without the need to track specific categories or follow rotating categories.
- Flexibility: Depending on the reward program or unlimited cash back card being used, users may be able to earn cash back on all purchases or find/add offers across a variety of categories and products, making it easy to earn cash back on various purchases.
- Maximizing rewards: With no caps on earnings, individuals have the potential to maximize their cash back benefits, especially if used frequently for everyday purchases.
- Easy to redeem: Redemption options are typically simple, with choices like statement credits or direct deposits, allowing users to easily access and utilize their cash back rewards.
Despite these potential benefits, it’s important to consider some possible cons to unlimited cash back, including:
- High APR: If an unlimited cash back program is tied to a credit card, it may have a high APR, potentially leading to higher interest charges if balances are not paid off in full each month.
- Annual fees: Some cards or programs offering unlimited cash back may come with annual fees, which could offset the value of the rewards earned — especially for users who don't spend enough to justify the fee.
- Minimum spend: There may be minimum spending requirements to qualify for the cash back rewards, which could be a disadvantage for users with lower spending habits.
- Potential for overspending: The draw of earning unlimited cash back rewards may tempt users to overspend, leading to increased debt if balances are not managed responsibly.
Earning unlimited cash back can be a great perk for those looking to reap higher rewards on their spending. However, it's essential to weigh the potential advantages and drawbacks. Choosing the right rewards program depends on individual financial goals and spending patterns.
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