| Best Cash Back Credit Cards | 
Chase Freedom(SM)
- 3% bonus cash back offers in popular, rotating categories like gas, home improvement and department stores
- Full 1% Cash Back on everything else - no spending tiers or caps on how much you can earn
- Up to an additional 20% cash back at select merchants when you shop online through Chase
- 0% Intro APR and No Annual Fee
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|  | What's More Important: Interest Rate or Cash Back Rewards?
When shopping for a credit card, it's natural to want to see the tangible reward that comes with a cash back credit card but it may be costing you money.
When I started working full time, I used to get a paycheck. There was always something very rewarding about getting the paycheck and leaving work on a sunny Friday afternoon, heading to the bank, and seeing the receipt that had a healthier account balance.
This past week I forgot to pick up my paycheck because it's no longer a check. It's a pay stub. They remind you of that in large black letters that say, "this is not a check." Friday afternoon is not as rewarding as it used to be. I don't even remember the last time I went to my bank.
Credit card companies know a few things about you and I. We represent the tens of millions of consumers who have very similar spending habits. They know that when we ask ourselves the question, "can I afford it," we are probably not asking ourselves if we have the money in our account but instead, will we get in over our heads if we buy it with our credit card.
They know that the large majority of consumers hold credit card debt. Many of them hold a lot of it. In the first quarter of 2009, credit card delinquencies rose 11%. That's 11% more credit card holders being charged that $35 late fee.
Finally, those who offer cash back credit cards know that the average consumer looks at dollar amounts instead of percentages when determining value. Which sounds more enticing: $50 or 3%?
These facts about you and I are what make cash back credit cards enticing. The card companies know that if they offer you and I what amounts to maybe a 1% cash reward for all of our annual purchases, we'll apply for their card because getting that check in the mail makes us feel good.
On the other side, though, we'll still pay our 12% interest on a balance that is probably more than we can afford and in the end, they are still coming out as the clear winner. They are making 11% more off of you and I in one year than we are making off of them or the retailer.
So let's look at our question: What is more important: Interest rate or cash back rewards? If you are unlike most credit card customers, the reward is more important. If you pay your bill in full at the end of each month, look at the reward. If you are like most Americans and according to statistics, you are holding a monthly balance, interest rate is much more important.
Now that you know more about you and you know that the credit card companies know it too, resist the urge to love the paycheck because if you are paying interest, you may be paying more in interest over a few months than your yearly paycheck. Not a very good deal, is it?
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