Shop cheaper with a credit card. Cashback programs as an additional service make it possible. If you pay a lot with the card, you get a lot back and can thus save good money. plavixgeneric-uses.com for an assessment
What does cashback mean?
There is a difference between bonus and cashback credit cards. A bonus card is based on points that you can redeem for prizes. Sometimes there are also cash rewards to choose from, which is all the more attractive. With classic cashback, you receive a direct credit. Alternatively, the discount will be offset against your next purchases. Non-cash rewards are not available.
The amount of the repayment is determined based on the sales. The more money you spend, the higher the bonus will be. Here is an example: Max Mustermann makes three purchases, each with 100 USD, 500 USD and 1,300 USD. The bottom line is 1,900 USD. He uses the Barclaycard Plus, which gives him a cashback of 3.0% for sales of up to 2,000 USD. This consumer therefore receives a refund of USD 57. This credit card will be introduced in the course of the article.
The cashback is usually calculated automatically, which also applies to the payment. In contrast to non-cash rewards, you do not have to go to a shop and select the bonus. The money is paid out on a certain key date. Until then, you can increase your money bonus through sales.
Advantages and disadvantages
In principle, this additional service is interesting for every user. After all, there is money back, additional expenses are excluded. Nevertheless, many users benefit from the cashback. If you only use your credit card once a year for a cheap flight, you cannot expect a high bonus. More than 5.0% are rather the exception. The usual range fluctuates between 0.5% and 3.0%.
The cashback runs fully automatically. As a consumer, you only have to pay with your credit card . Payment is made on the contractually stipulated key date. There may be differences here:
Some banks use the last quarter for the bonus, others calculate the cashback on an annual basis. So you have to use the credit card for a longer period of time. However, that shouldn’t be a problem for most consumers.
Compared to bonus credit cards, you don’t have to collect points. It can take a long time to reach a certain score. A cashback card rewards you from the first USD.
A disadvantage can result from sales limits. The attractive cashback of 2.0% to 5.0% is often limited to sales of 3,000 USD. After that, there is “only” 0.5% for every USD. Still, that’s money. In many cases you will receive the cashback on any payments. However, there may be restrictions on certain trading partners. Fortunately, that’s more of an exception.
Summary of the cashback as an additional service:
+ free additional service
+ Reimbursement from 0.5% to 3.0% (higher bonuses also possible)
+ automatic payment
+ do not collect elaborate points
– Sales limits possible (cashback e.g. only up to 5,000 USD in sales)
– can be limited to certain shops
What are the costs?
The cashback is granted free of charge. It is an additional service for customer advertising. The situation is similar with insurance. Attractive reimbursement should ensure new customers.
There are only indirect costs for consumers. Cashback cards are usually associated with annual fees. Therefore you have to calculate exactly whether the offer pays off. If the potential cashback is 20 USD, the annual fees should not be 60 USD. Provided that you want to get a cashback credit card.
Some credit cards are free in the first year. A fixed annual fee then applies. There are offers with less than 50 USD per year. A cashback credit card is often worthwhile from an annual turnover of 1,000 USD.
Example: Barclaycard Plus
The Barclaycard Plus is a Visa credit card. It is aimed primarily at online shoppers, since goods protection insurance is included. There are no annual fees in the first year.
An overview of the conditions:
- free of charge in the first year
- 29.00 USD from the second year
- 3.0% cashback up to an annual turnover of USD 2,000
- from 2,000 there is a 0.5% refund
- Cashback for all sales made online
- individual credit line
- free payments in USD countries
- Cash fee of 4.0% (at least 5.95 USD)
- Goods protection insurance included
Conclusion: A cashback credit card makes sense from the first USD. If you have several cards with similar services and fees to choose from, you should prefer the model with reimbursement. Would you like to get an extra credit card for cashback? Then the potential reimbursement must be higher than the annual fees.