How do cash rewards work with credit card purchases?

Earning cash rewards through credit card purchases typically involves receiving a percentage of the amount spent back as cash. This method allows consumers to benefit directly from their credit card usage, encouraging them to spend more, which can result in greater rewards accumulation over time. The percentage can vary based on the type of purchases or promotions that the credit card issuer offers.

The other options are less accurate in relation to how cash rewards function. The idea that cash rewards are only issued upon reaching a minimum balance implies a restriction that doesn't typically exist for most cash back credit cards, where rewards accumulate continuously and can often be redeemed as soon as they surpass a certain threshold, but not exclusively. Limiting cash rewards to specific holidays would not reflect a standard practice, as cash-back programs usually apply to regular purchases throughout the year. Lastly, the notion that cash rewards are deducted from your total balance misrepresents how rewards work, as they are generally issued as a credit or redemption rather than reducing your outstanding balance directly.