You hear the term “Cashback” a lot these days. Sometimes, you get cashback for shopping on eCommerce websites. At certain stores, you get cashback on paying cash for your purchase. Sometimes, you get cashback as a promotional offer on something. Finally, there are Cashback Credit Cards.
So, what exactly is a Cashback Credit Card? In simple terms, these are the cards that give a certain percentage of the amount that you spend with your card back in your account.
Every Cashback Credit Card comes with unique terms and conditions. Some cards have no cap on how much of cashback amount you can earn within a month, while some cards allow you to earn more as you spend more. There are also some cards that require you to spend a minimum amount every month to be eligible to earn cashback. Before you head out to get your new Cashback Credit Card, it’s important to know everything about these cards.
Understand how Cashback Credit Cards work
It’s simple how these cards work: whenever you use your Cashback Credit Card to buy something, you get some cash refund based on the amount of the transaction. It’s important to understand that cashback is not the same thing as a discount. In case of cashbacks, you get your cash refund after making the purchase; so initially, you will have to pay the full amount of your purchase. Cashbacks are usually offered as a fixed certain percentage of the amount you spend with your card.
Let’s say you have a card that offers 5% cashback. If you spend S$200 on shopping, your cashback would be S$10. But that doesn’t mean only S$190 will be charged to your card when you make the purchase. Initially, you will have to pay the full amount of S$200. After a certain period, your credit card provider will put S$10 back in your account.
Is Cashback Credit Card for you?
Cashback Credit Cards offer a great way to save money while you shop, but they are certainly not for everyone. To decide if a Cashback Credit Card is for you, consider:
* Your spending habits: It’s best to know your spending habits, if you are looking to get a Cashback Credit Card. If you don’t spend much on shopping, or if you spend most of your money on travelling, then this card is not for you.
* Your ability to pay off balance every month: Cashback Credit Cards make sense only if you can pay off your balance in full every month. Otherwise, the amount you will earn as cashback will get offset by the interest charges you will be paying on your outstanding balance.
Things to consider before choosing a Cashback Credit Card
* How much cashback is the card offering? It’s important that you know exactly how much you will stand to gain with your Cashback Credit Card. Also, check if the cashback is being offered as a fixed percentage, or like “get S$X as cashback when you spend S$X?”
* Does the cashback percentage vary? You should always check if the percentage varies from store to store.
* Is there a cap on cashback? Some cards have a limit on how much you can get back every month. Knowing that limit, if any, will help you decide if it’s worth taking that card or not.
* Is there any minimum spending requirement? Some cards require you to spend a minimum amount every month for a certain number of months to be eligible to earn cashback. If you can’t spend that much amount every month, you won’t get any refund.
* Is there any minimum number of transactions to be made every month? If there is, figure out if you can meet that criteria; else you won’t get your cashback.
* How will you get your cashback? You might get it through a check or as a statement credit. It’s always good to know how exactly you are getting your cashback.
* Is the annual fee worth it? If there is an annual fee for the particular Cashback Credit Card that you are considering, make sure it’s worth it. If the annual fee is offsetting the amount of cashback you expect to earn, there is no use of getting such a card. http://bit.ly/2DbTKg7 #SAP #SAPCloud #AI
