Cashback Credit Card: Benefits and Features

by John Judge Writer

Credit cards let you easily borrow money while also allowing you to build your credit score. A credit card offers you many deals, discounts, and benefits. Cashback is one of the benefits credit cards offer you.

Cashbacks are simple. You spend money on a purchase, and instantly, you get cash of real value back. Instead of earning rewards and redeeming them at a later point for cash or vouchers, cashbacks give you some real value back.

There are many cashback credit cards in India, and most of them offer extra cashback on specific spending categories. That is the reason you must pick the right money-back credit cards based on the way you spend your money.

What is a cashback credit card?

A credit card cashback is when you get a fixed cash value as per the available offer while paying through your credit card. These cards are credit cards that let you earn cash after you spend money. They pay back to you a percentage of the money you spent or give you reward points. But keep in mind that the schemes of any credit card make sense only if you can pay off the balance in full every month and do not go over your limit. Otherwise, the interest will outweigh the rewards every single time.

A credit card cashback can give you real value back when you spend money on products with applicable cashback offers.

Types of cashback credit cards

You have different types of cashback credit cards. While some credit cards offer the facility of cashback throughout the year, others offer it on occasions like festive sales, etc. Also, most cashback credit cards offer cashbacks only on specific purchases like utility bills, dining, fuel, or shopping at select merchants. Today you can find many credit cards that offer cashback on purchases, regardless of the type.

As per the bank you choose to go with, you can avail different types of credit card offers. While some credit cards offer a flat percentage cashback, others provide higher cashback tied to your purchase value. Simply speaking, cashbacks are a way to get a percentage of your money spent back. In case you want to get reward points instead of cashback, you can choose the best credit card for reward points. There are many credit cards with reward options in the market.

How do cashback credit cards work?

With the best money back credit cards, every time you use the card for a purchase, a percentage of the amount is credited to your account as cashback. For example, if your credit card gives you 1% cashback, then you earn ₹10 for every ₹1,000 spent.

Depending on the type of credit card, you can receive cashback into your account monthly or annually. Also, what most cashback credit cards do is they credit the cash you have earned into your credit card balance. This can reduce your monthly credit card bills. Also, you can choose credit cards with rewards if you want to accumulate reward points instead of money. You can redeem the reward points collected by using the best credit card for reward points to pay for your next purchases.

In summary

Thus, cashback credit cards can be one of the best options for you if you use credit cards regularly and want to earn a percentage of your spending back.