Credit Card Cashback and Advice on Accessing Applicable Deals
Using your credit card comes with lots of benefits such as cashback credit card offers. There are rewards attached to using your card and these rewards can be unlocked based on various factors. Your issuer often tempts you with cashback credit card offers that you can’t resist. While these offers are tied to higher spending, you must exercise due diligence before choosing to access them.
Credit card bill payment cashback offers are targeted at people who settle their bills with plastic money. Users that spend more on certain categories each month also have rewards and perks that they can unlock. In this detailed guide, you will learn what cashback is and how to unlock cashback offers without biting your fingers.
What is a credit card cashback?
Cashback is money offered back to you as an incentive for buying things with your credit card. It is a percentage of your credit card spending and is targeted at encouraging you to continue using your plastic card. The cashback you get can be in the form of cash, redeemable reward points, gift vouchers, or discounts, among other things.
When you are rewarded with cashback for purchasing stuff with your credit card, the cashback can be added to your card balance or deposited into your bank account. It can also be given as a card voucher that enables you to buy something for free or at a discounted price. Your cashback can be applied to travel, fuel for vehicles, mortgage, grocery, entertainment, and other lifestyle needs.
How to qualify for cashback?
If you want cash back credit card offers, the following tips would be helpful:
- Use your card
The first criterion for qualifying for cashback is using your credit card. It is best to use your card in purchase categories that match your daily lifestyle. For instance, if you constantly fuel your car on your daily commute, you might consider using your card if it is optimised for fuel purchases.
- Pay off your balance
This is a no-brainer. To qualify for cashback, it is best to pay off your credit card balance each month. To do this effectively, do not spend above your available credit or go beyond your credit limit. Paying off your balance monthly or paying the minimum balance will go a long way to qualifying you for cashback.
- Patronise retail partners
Some cashback is tied to specific retail partners. For instance, you may get specific or higher cashback for buying stuff at Amazon, Target, or Tesco. Some credit card companies would like you to buy fuel for your car at designated gas stations because of a business partnership with them.
- Hit the recommended threshold
In many cases, you are required to spend above a given threshold to earn cashback. In such a case, you are advised to never spend above your budget to earn a reward, because the higher spending has countered the targeted reward.
Where does cashback come from?
If you are wondering how credit card companies and retailers turn a profit with their cashback system. The answer is simple. Credit card companies pay you cashback from the membership fees they charge to cardholders. Retailers are also able to offer cashback because of their economies of scale – meaning the profits they generate from bulk purchases.
Importance advice to bear in mind
– Do not be tempted to spend above your budget to clinch a cashback offer.
– Always use credit cards that do not charge annual or maintenance fees for cashback offers.
– Some cashback may cancel interest or fees on some cards, so be sure to find out.
– Use credit cards that are designed for cashback in certain spend categories, e.g. travel, gas, grocery, entertainment, health, etc.
– Do not think that cashback is free money because it is not. It is a percentage of an aggregated expenditure shared out to faithful customers within that category.
– Credit card bill payment cashback offers are good for clearing your monthly balance and will help boost your credit score over time.
The cashback model was first introduced by Discover in 1986 and it has been popularised by many credit card issuers around the world today.
Also Read: How to maximize your credit card rewards
Cashback is a reward system designed to reimburse credit card users for card purchases. The cashback reward will not make you rich, but it can refund a significant percentage of your purchases back into your pocket.