The Truth About Cashback Credit Card.

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The truth about cash-back credit cards
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With increase in the competitiveness between
different banks for credit card services, card
companies offer a host of additional benefits
such as rewards programmes, 'lifetime-free'
services and cash-back offers increasingly
nowadays to engage the brand awareness of the
consumer consistently.
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What are cash-back credit cards?
When accepting payment by credit cards, merchants
typically pay a percentage of the transaction
amount in commission to their bank or merchant
services provider. Many credit card issuers share
the commission with the cardholder by giving the
card holder points, air miles or a monetary
amount.
A cash-back offer is specifically for providing
the card holder a small monetary amount as a
reward for using the card.
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Which transactions are included in cash-back
offers?
Cash-back offers are valid on almost all kinds of
expenditures or purchases done through the credit
card. That is, besides spends on shopping and
eating out, even balance transfers and bill
payments are eligible.
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How much money is returned through the cash-back
offer?
Where a card issuer operates such a cash-back
scheme, card holders typically receive between
0.5 per cent and 2 per cent of their net
expenditure (purchases minus refunds) as an
annual rebate, which is either credited to the
credit card account or paid to the card holder
separately, for example by cheque.
Cash-back percentage ranges around 2 per cent - 5
per cent for different cards and in some
promotional schemes may even go up to 10 per cent
exclusive to customers with a good credit profile.
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What are the things to keep in mind while using
cash-back cards?
There are some things that you should always keep
in mind when you opt to avail such cash-back
offers.
Where you are spending
Amount of cash-back
The credit card cannot be used at any
establishment that you choose. There will be a
list of shops, stores, restaurants etc. that will
fall into the category of cash-back transactions.
Normally, banks place a cap on the maximum amount
of cash-back that it offers. It is important to
check this because even if you have spent more
doesn't necessarily mean that you are going to
get a cash-back amount as per that transaction.
Minimum cash spent
Normally, cash-back is offered only when the
credit card holder spends a minimum amount on it.
This could range anywhere between Rs. 1500 and
Rs. 2500. So if you spend only Rs. 500 on the
card, chances are very slim that you would be
able to get any cash-back on that transaction.
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Other hidden requirements
Check for other requirements such as

• Whether the card falls under the offer category

• Whether registration is required for earning
  cash-back

• Should one apply for a new card meant only for
  cash-back

• The period during which the offer is valid

• Does the offer apply at outlets having
  point-of-sale terminals, or should the purchases
  be made only where the card-issuing bank has
  installed such terminals?

• The products categories, which are eligible for
  the offer

• Should cash-back be collected at bank branches,
  redeem them at the POS outlets, or will the
  amount get credited automatically in the
  card-holder's savings account

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Using a cash-back card can be very good indeed,
provided that you use the card smartly within its
limitations.
As mentioned before, it is important to confirm
the minimum amount to be spent to be eligible for
cash-back and the maximum amount you can receive
as cash-back, because if the delicate balance
between the two is not struck correctly, you may
be over-spending which can lead to interest
charges.
These things can completely overshadow the
benefits of a cash-back card.
FOR MORE INFORMATION VISIT OUR WEBSITE
www.pandacashback.com