Credit Card in UAE

Cashback Vs Reward Points Credit Card - Which One to Get?

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Cashback and Rewards
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The whole world is going digital and credit cards have become one of the most convenient ways of making transactions. There is a wide variety of credit cards available in the market today and it may sometimes be difficult to pick the best fit.

The whole world is going digital and credit cards have become one of the most convenient ways of making transactions. There is a wide variety of credit cards available in the market today and it may sometimes be difficult to pick the best fit. Some credit cards enable card members to earn cashback, while some offer reward points to redeem. The requirement of a credit card depends upon the types of transactions you make. Before you make a choice, let us help you learn what these cards are all about along with a brief on their advantages and disadvantages. 

What is a Cashback Credit Card?

As the name suggests, cashback credit cards enable card members to earn an attractive amount of cashback on their purchases and spending. These purchases are limited to specific categories set by the credit card lender. The categories include travel expenses, grocery shopping, dine booking, petrol expenses, entertainment expenses, and more, along with almost all the online transactions.

Some cashback credit cards come with fixed categories, whereas some enable card members to choose based on their financial preferences. Either way, the cardholders can earn cashback and use the same to meet other financial requirements. The cashback cards come with a capping requirement ranging between 1 to 10 percent for each cardholder. 

Once a cardholder makes a transaction on one of the covered cashback categories, the cashback amount gets credited into their credit card account within a specific duration, as mentioned in the credit card policies. 

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Advantages of a Cashback Credit Card

Here are a few major advantages of getting a cashback credit card.

  • Getting Cashback - With cashback credit cards, the cashback amount gets credited to the card members account based on their usage. There is always an option for them to maximize their usage and earn more cashback. They can check their credit card statements to check the categories where they have earned a good amount of cashback. The cashback credited into the card members’ accounts is also reflected in the credit card statements. 
  • No Catalogue Bound Products - Cashback is limited to categories but not to specific vendors’ catalogues. For example, if the card lender has offered cashback on retail shopping, it does not matter which retailer you choose to shop with. The card members can simply make purchases and check their next bill statement to know the amount of cashback they have earned.  
  • Automatic Cashback Transfer - Cashback returns are automatic transfers made by the credit card lender into the cardholders’ account. They are provided to the card members in the form of bill rebates that they can never slip through their fingers as there is no concept of redeeming them before they expire. 

Disadvantages of a Cashback Credit Card

There are a few disadvantages of getting a cashback credit card with all the advantages.

  • Minimum Spend Requirement - Not all cashback credit cards come with minimum spend requirements. But the cards that do, offer higher returns. With the credit cards that have minimum monthly spend requirements, the card members need to spend a specific amount every month to trigger the higher cashback rates.
  • Limited Earnings - Cashback credit cards come with limited earning options for cardholders. All these cards have annual capping for the amount that card members can earn in the entire year. The calculation for the cashback amount starts as the year starts based on the card billing cycle.
  • Limited to Categories - Cashback credit cards are limited to a range of categories. The card members can optimize their cashback credit cards and choose their preferred categories, but still, they will not be able to cover them all.

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What is a Reward Point Credit Card?

Reward point credit cards work the same way as cashback credit cards do. The only difference is that they dispense rewards instead of cashback points. The earned reward points get added to the cardholders’ monthly bill statement with reward point credit cards. They can then redeem these points to meet their other financial needs.

Reward point credit cards are not limited to specific categories. With most reward point credit cards, the card members can earn points on both local and international spending that are not restricted to a catalogue.

Advantages of a Reward Point Credit Card

Here are a few major advantages of reward point credit cards.

  • Great Redemption Deals - Reward points offer great redemption deals with constantly refreshing catalogues. The credit card members can redeem their reward points to spend on other exciting deals and offers. Not just that! The reward point credit cards also enable card members to earn attractive travel perks and promotion programs while multiplying their earnings and redeeming bigger gifts. 
  • Reward Points Conversion - The best part about reward point credit cards is that they enable card members to convert their earned reward points into travel miles. The cardholders can use these reward points to fly with various popular and reputed airlines partners and save on their travel expenses. Some of the reward point credit cards even allow card members to convert their reward points into cashback and use the same to fulfill their other financial needs.
  • Not Limited to Categories - Reward point credit cards cover almost all the categories and enable card members to earn reward points on nearly all types of spending. Whether the card members shop around in the retail stores or book tables in a restaurant for a family dinner, they save on everything if they have a reward point credit card.

Disadvantages of a Reward Point Credit Card

Here are a few major disadvantages of using a reward point credit card.

  • Reward Points Can Expire - Unlike cashback points, reward points that the cardholders earn can have a limited validity. They have an expiration date, and the cardholders need to redeem the reward points before they expire. However, some credit card lenders in the UAE offer reward points with evergreen validity but they do not usually suit the cardholders’ spending habits.
  • Limited Item Redemption - Unlike cashback points, reward points redemption is limited to a specific catalogue brochure. For instance, the card members can convert their reward points into air miles, but they still stand limited to a specific value compared to cash returns. 

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Difference Between Cashback and Reward Point Credit Cards

Categories

Cashback Credit Cards

Reward Point Credit Cards

Transaction

Cashback credit cards enable card members to make transactions to a specific brand outlet.

Reward point credit cards enable card members to make almost all the transactions not restricted to any specific catalogue.

Usage

With a cashback credit card, the card members can get the amount credited in their account that reflects in their next bill statement. They can use this amount anywhere to buy the products of their choice.

Every reward point credit card credits the reward point in a fixed period of time set up by the lender. The card members can use these reward points to buy products that are available on the lenders’ websites.

Validity

Cash returns come with no validity. The cashback credit cardholders can use these cash rebates anytime they want. 

Reward point credit cards offer reward points with a validity that varies from bank to bank.  

Minimum Transaction

Some cashback offers come with no minimum transaction requirement and the cardholders can earn the same on every little transaction. 

Reward point credit cards need the card member to meet some minimum transaction limit to earn reward points. The limit varies from bank to bank. 

Fluctuations

The cashback percentage offered in the credit cards usually remains the same until the cashback amount reaches the maximum limit.

The card members can earn thousands of reward points and the numbers of reward points fluctuate based on the increase and decrease of a transaction amount. 

Frequency

Not all credit cards offer instant cashback. With some credit cards, the cardholders can get an immediate Cashback whereas some credit cardholders get the amount of Cashback after 90 days from the date of transaction.

The card members can get their reward points reflected in their accounts instantly after making the transaction.

Extra Bonus

Some credit card lenders do not offer an extra bonus in cashback credit cards. Once the card members earn cashback, they are not eligible for extra bonus offers. 

Some reward point credit cards offer additional reward points bonus on achieving a certain limit of spending amount. 

Maximum Limit

Cashback credit cards come with a maximum earning limit for card members. Sometimes the limit is linked with some specific brands.

With most of the reward point credit cards, there is no maximum earning limit. The more transaction the card members make, the more reward points they can earn.

Calculation

Cashback credit cards define the cashback percentage in the terms and conditions of the credit card and it is easy to calculate the amount of cashback based on the details provided.

Reward point credit cards offer different reward point percentages. It varies for different types of transactions. Therefore, it is not easy for card members to calculate the exact number of reward points they will get on a transaction. 

Multiplication

Cashback offers are one of a kind. They do not multiple or get affected with the other transactions. The percentage for the cashback earning is usually fixed.

Reward point credit cards enable card members to multiply their earned reward points by making more transactions based on the categories.

Welcome Offer

Not all cashback credit cards come with welcome bonus offers for the card members on activating their credit card. 

Almost all the reward point credit cards offer some welcome reward points that the card members can get at the time of card activation. The card members can redeem these reward points to shop around later on.

Top Cashback Credit Cards in UAE

Here is the list of the best cashback credit cards in the UAE.

Name of Cashback Credit Card

Cashback Offers

ADIB Cashback Visa Platinum Card

Receive 1 percent cashback flat on each and every credit card expense

Mashreq Cashback Credit Card

Get 5 percent cashback on dining expenses

Dubai First Cashback Credit Card

Get up to 5 percent cashback on shopping and online purchases

Simply life Cashback Credit Card

Get 1 percent cashback on all expenses with a minimum monthly expense of AED 1,000

RAKBANK Titanium Card

Get a 5 percent cashback on supermarket and restaurant spending

FAB Cashback Credit Card

Earn a 5 percent cashback on shopping, fuel, utility expense

HSBC Cashback Credit Card

Earn 10 percent cashback on fuel expenses

Emirates Islamic Cashback Plus Credit Card

Earn a 10 percent cashback on supermarket, education, dining, and telecom expenses.

Citibank Citi Cashback Card

Earn a 3 percent cashback on non-AED spending

Best Cashback Credit Card in UAE

Top Reward Points Credit Cards in UAE

Here is the list of the best reward point credit cards in the UAE.

Name of Reward Point Credit Card

Reward Point Offers

FAB Abu Dhabi Titanium Card

Earn 25 per cent extra FAB Rewards for your spending in Abu Dhabi

Earn up to 2.5 FAB Rewards for every AED 1 you spend

ADIB Booking.Com Infinite Card

Earn 3 reward points for every AED 1 spent locally or internationally

ADCB Etihad Guest Infinite Credit Card

Earn 1 Etihad Guest Miles for every USD 1 on domestic purchase and 1.25 on an international purchase

Earn 0.33 Etihad Guest Mile per USD 1 when spent on government services, supermarkets, education, utilities, etc.

Earn 1.25 Etihad Guest Miles for every USD 1 on purchases with Etihad Airways

Welcome bonus of 12,000 Etihad Guest Miles

Al Masraf World Elite MasterCard

Earn 2.5 reward points for every USD 1spent internationally

Earn 2 reward points for every USD 1spent domestically

Earn 0.5 reward points for every USD 1spent on government services, fuel, merchants, utilities, etc.

Earn 100,000 bonus reward points

Emirates NBD Lulu 247 Titanium Credit Card

Earn 2 percent on fuel spends

Earn 1 percent on utility bill payment

Earn 3.5 percent on LuLu in-store and online spends

Earn 0.35 percent on all other spends

CBD Titanium MasterCard

Earn 0.5 points per AED 1 spent on groceries and government purchases

Earn 1 and 1.5 points per AED 1 spent on local and international purchases respectively

American Express Platinum Card Credit Card

Earn 1 point earned for every AED 4 spent through Membership Rewards program

Reward points never expire

Dubai First Amazing Platinum Card

Earn 1 and 2 amazing points on each AED spent on local and international purchases respectively

Citi Emirates Ultima Card

Earn 1 Skywards Mile per USD of local spend Earn 1.5 Skywards Miles per USD of FX spend

Earn 2.5 Skywards Miles per USD spend on tickets purchased online at emirates.com

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Conclusion

Now that you know the advantages and drawbacks of both cashback and reward point credit cards, it will be easy to make a choice. Make sure you go through all the benefits and features offered by a credit card before you get one for yourself. You can visit our website to explore more credit card options based on your financial preferences. You can also call our help and support desk in case you need assistance. Our professionals will analyse your financial needs and explain the detailed benefits of a few suitable credit cards. 

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