Cash Back Offer Comparison

Cash rebate credit cards have a number of different ways in which you earn money back as you spend. Finding the best offer is highly dependent on your spending profile and the amount you purchase every month. A quick comparison of the cashback cards available in Australia shows that there are some restrictions and caps on which purchases you can actually get money back on. Some cards have a monthly cap on the amount that you can get cash back on with 5% being the highest rebate rate on offer.

An Overview of the Cash Back Credit Card

Cash back credit cards feature a special rewards program in which cash is paid back into your account when you use the card for purchases. There is a variety of cash back cards available with each offering different percentages and ways of earning paybacks, so if you are considering one of these products it is important to find one that suits your spending habits first. If you like to use your card often for purchases, usually pay your monthly balance in full, and like to shop with the program’s participating retailers, you could find a card that saves you plenty of money.

Generally, cash back credit card offers work by paying back money into your account each time you make a purchase, usually calculated as a percentage of how much you spend. Banks offer a choice of deals and cash back structures, and many provide greater rewards for shopping with participating retailers.

Most credit card cash back programs fall into one of three main categories: flat rate, tiered or selected retailer programs. Flat rate programs are the most simple, offering the same percentage rate of cash back on every purchase made using your credit card. Tiered programs offer cash back on different size purchases – some provide cash back for large purchases, while others earn cash back on smaller amounts. Selected retailer programs offer cash back when you use your card at specified retailers.

Four Tips for Using Cash Back Credit Cards

Find a card that suits your spending habits: When comparing and selecting a cash back credit card it is important to find one that fits in with your existing spending habits. If you already shop with a retailer who participates in the cash back program you can save money on the purchases that you normally make.

Use your card for everyday purchases: The more you use your credit card, the more cash back you can earn. Work out which of your everyday purchases you can make using the card including groceries, petrol, meals out, etc. It is important, however, to keep these purchases within your monthly budget – if you overspend and run up debts you could negate the rewards of the program.

Pay your monthly balance in full: You get the most out of any credit card if you repay the debt in full each month. An ongoing balance on your account starts to attract interest, which can be relatively high, negating the benefits of cash back. If your payments are late or less than the minimum required amount you could also be charged penalties and lose your cash back rewards.

Avoid cash advances: Cash back credit cards are great for everyday purchases, but they should not be used for cash advances. Cash advances don’t earn cash back and start attracting interest immediately, nullifying the value of any rewards. When using a cash back card it is essential to be aware of exactly what types of payment earns cash back, and which types attract more interest.

Cash Back Credit Card Features to Compare:

The cash back rate: Cash back is typically calculated as a percentage of each purchase, and often varies between different types of purchase. Selected retailer programs offer cash back for shopping at specific stores. Banks offer many different cash back deals, so it is essential to look at how each program functions before applying.

Capping: Some programs include a ceiling on how much you can earn within a year. Although this limit is usually set relatively high, it could become a concern if you are using your card for regular large payments. Read the terms and conditions to check for capping and other restrictions before applying.

Interest rates: As with any type of credit card, the interest rate is one of the most important features. Although you should aim to make use of interest-free days and pay your monthly debt in full, you must be aware of the rate of interest that is applied to the balance on your credit card.

Annual fees: The annual fee is another crucial consideration. You should try to calculate how much cash back you can realistically earn in a year to make sure the annual fee does not negate this amount.

Charges and penalties: Study the small print to find any penalty fees and other charges that may be applied to your credit card usage and how these relate to the cash back program.

Introductory offers: Some banks offer special promotions for new customers including extra cash back bonuses or reduced rates and fees for an introductory period. Shop around to find one with the best deal, and the best ongoing rewards when the introduction ends, to make sure you are saving the maximum amount of money.