What is a Cash Back Credit Card?

Rather than provide points and other credit card rewards, Cash Back Credit Cards calculate the total value of your monthly spend and then give you back some of this in the form of cash.

The RinggitPlus Team explain the basics of Cash Back Credit Cards

Cash Back Credit Cards give you rebates in the form of cash. Rather than provide points and other credit card rewards, Cash Back Credit Cards calculate the total value of your monthly spend and then give you back some of this in the form of cash. While they work like rebates, Cash Back Credit Cards only return cash and not rewards, which often come in the form of discounts for other products that you may not want. This way you don’t waste any points so you can get more actual savings on your Cash Back Credit Card spending.

How Do Cash Back Credit Cards Work?

Most Cash Back Credit Cards give a percentage value or rate from 1% to 5% for their Cash Back rewards. So if you use your Cash Back Credit Card to buy an RM100 item, you get the 5% value of this purchase back in cash for a total of RM5. This means the item now costs RM95. This Cash Back is usually paid at the end of your credit card statement cycle.

Is There a Maximum Cash Back? Do I Need to Spend a Minimum Amount?

There are limitations and requirements to Cash Back Credit Cards that include the following:

  • Most Cash Back Credit Cards have a limit on how much cash back you can get every month (although some cards don't have this limit).
  • You may have to spend a certain amount in a single receipt, on certain days of the week or just at certain outlets or shops.
  • You may have to use the Cash Back Credit Card a certain amount of times per month to qualify.

What Else Do I Need to Know?

  • Cash Back Credit Cards only work well if you can pay back the whole amount spent for that month. If you spend too much just to get the cash back, but you don't have enough to pay off what you spent, then the savings get eaten up by interest.
  • While both the main Cash Back Credit Card holder and supplementary card holder can enjoy the same cash back benefits, the limitations apply to the same account. This means if the supplementary card holder has already spent to the maximum of the cash back value for that month, the main card holder will not gain any cash back for purchases made after this.
  • Usually, Cash Back Credit Cards with more requirements are next to useless unless your spending needs fit these requirements exactly.  Make sure you check the qualifying outlets, days of the week and minimum spending requirements.
  • Cash Back Credit Cards with less limitations such as no cash back limit usually have a lower cash back rate such as 1% rather than 5%.
  • If a Cash Back Credit Card has a yearly cash back limit it won't replenish every month. So if the Cash Back Credit Card has an RM600 yearly cash back limit and you spend that much in the first month to get RM600 cash back, you won't get any cash back for the remaining 11 months.

Which Cash Back Credit Card Should I Get?

If you are interested in applying for a Cash Back Credit Card Bookmark RinggitPlus.com or Subscribe to our Feed. Over the next few weeks we will be sharing our in-depth reviews of the best Cash Back Credit Cards for Malaysians.

Image Source: creditmama.com

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