What is a Cashback Credit Card?
Cashback credit cards offer a percentage of your spending as a reward, credited back to your account. You can earn up to 5% cashback on select categories, like online shopping, dining, groceries, and more. Let’s dive into how these cards work and how to make the most of them.
How Does Cashback Work?
- Cashback is credited to your account through your monthly statement.
- You can use it to pay off part of your credit card bill.
- Some banks allow you to request cashback redemption or set minimum cashback thresholds for redemption.
What Are the Benefits of Cashback Cards?
- Cashback on Daily Spending: Earn on categories like food delivery, movie tickets, and e-commerce.
- Easy Redemption: Most issuers allow you to apply cashback toward your statement balance or deposit it into your bank.
- No Expiry: Cashback typically doesn’t expire, but watch for time limits on cashback points with some issuers.
Important Things to Remember
- Category Restrictions: Cashback often doesn’t apply to EMI, fuel, or utility payments.
- Cap on Earnings: Some cards have a monthly limit on cashback earnings.
- Exclusions: Cashback isn’t offered for rent payments, insurance, e-wallets, jewelry, and other transactions.
- Timely Payments: Pay your credit card bill on time to enjoy cashback benefits.
Who Should Get a Cashback Credit Card?
- Everyday Spenders: Ideal if you want rewards on groceries, food delivery, and online shopping.
- Simple Rewards: Unlike air miles or reward points, cashback can be used directly to pay your card bill.
Where Cashback Doesn’t Apply
- EMI transactions (Merchant/Flexipay)
- Fuel purchases
- Rent, insurance, education expenses
- Railway bookings, toll fees, and more