The Truth About Cashback Credit Card.

1. The truth about cash-back credit cards

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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

8. 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