All You Need To Know About Cashback Credit Cards

Cashback credit cards are often considered the best credit cards for:

Maximising your spending power
Providing you with a straightforward way to save money

The amount of cashback you get depends on the card issuing company and the brands they have relationships with. You can use these cards for all expenses, be it:

Buying flight tickets
Booking accommodation
Shopping from retail stores online or offline
Paying utilities and recharging your mobile
Buying groceries and more

How Cashback Works

This feature helps refund a small percentage of your purchase amount or bill amount back to you. You can get it in two ways:

Credited in your account to be used as statement credit to pay your next bill
Credited as reward points, which you can use to purchase merchandise or gift cards

You can get cashback by spending money on categories like:

Fuel
Dining
Pharmacies
Travel
Online shopping
Phone and internet services
Movie booking
Streaming services
Fitness memberships
Food delivery
Rideshare bookings

You usually do not earn cashback on purchases such as:

EMI conversions of bills
Insurance payments
Rent
Education fees
Jewellery purchases
Utility payments

Here are some features to keep in mind:

Cashback isn’t an instant discount at the time of purchase
Cashback rewards may take time to show up in your account until the purchase is fully processed
Cashback may be subject to a certain transaction amount and other conditions
Cashback may be capped at a certain amount every month, quarter or year

How Do Cashback Cards Work?

Depending on your credit score, you can get credit cards with a different set of benefits. A good score and high income can help you get approved for the best credit cards that offer valuable cashback deals.

When you swipe your card to pay, you will be rewarded with a small percentage of your transaction amount as a credit. The percentage differs card by card and based on terms and conditions.

Types of Cashback Cards

Knowing all the terms and conditions associated with this feature will help you choose the right card. Take a look at the various types of cards in this category that are normally offered by credit card companies:

Flat-rate Cashback Cards:

These cards offer one of the easiest ways to track your cashback and plan purchases since they offer the same percentage for all eligible transactions.
Whether it is grocery shopping or fuel purchases, you get the same cashback.
For instance, say you get 2% cashback on online and offline transactions at all eligible retailers. This way, you know that all your eligible purchases will give you the same cashback.

Tiered-rate Cashback Cards

These cards may offer you a higher percentage on certain categories like groceries or online shopping and a lower percentage on other categories like utility bills.
The cashback may also be higher when you make purchases with certain brands that the issuer has a tie-up with.
For instance, you may get 5% cashback on all spends on Amazon, 2% cashback on fuel purchases and 1% cashback on all other eligible transactions.

Other Cashback Cards

There may be other variations of cashback offers, such as a higher percentage until you reach a certain cap and a lower percentage after that.
Cashback may also be related to your monthly or quarterly spending.
For instance, you may get a higher cashback when you cross a certain spending milestone.

Choosing a Cashback Card

If you are wondering whether you should choose a cashback card over other varieties, such as a travel card or a rewards card, take a look at features to watch out for:

Check the yearly fees of the card and try getting a lifetime-free card, so you can use it without spending anything out of pocket
If you get more cashback on a card with fees, select a card that allows you to waive off annual fees on meeting certain spending criteria
Keep the interest rate in mind and choose a card that has lower rates to keep your outgo low in case you are unable to pay your bill in full in the future
Pick a card with a lucrative welcome bonus or vouchers to get the most out of it
See if your card comes with insurance covers, zero liability or purchase protection

Making sure you understand your chosen card’s features and terms is key to having a good experience. If you want a card that provides exciting valueback offers and many more benefits, get the One Credit Card. It helps you earn 5X reward points on your top two spending categories each month, no matter what they are.

It also comes with zero annual and joining fees and has a full-stack mobile app that helps you manage your card like a pro. Apply online to enjoy the benefits of this lifetime-free credit card.