How Cash Back Credit Cards Work?
Cashback credit cards are the credit cards that reward customers with cashbacks on every purchase. It was the credit card companies’ way of attracting customers. Combined with the free credit cards in UAE, this plan was successful in attracting customers. With the attractive offer of cashback on every purchase, cashback credit card is the one most customers go for. More than half the customers apply for cashback credit cards.
Some fascinating facts about cashback credit cards are-
- With the offer of cashback, the companies return a percentage of the purchase to the customer through various options like reduction of balance, gift cards, bank deposits, etc.
- Cashbacks are tax-free. The government doesn’t count cashbacks as taxable money.
- The minimum percentage offered by a company in cashback is 1% and the maximum is 10%.
- Customers can earn higher cashbacks when they use their cashback credit card during special promotions and discounts. Shopping websites like Amazon frequently offer cashbacks rewards. Using your cashback credit cards in those times can increase your cashback returns heavily.
- Some cashback credit cards come with zero annual fees and a sign up bonus amount.
Ways to Redeem Cashbacks
Redeeming cash back rewards is very easy.
- Bank Deposit- The customers can have the cashbacks deposited directly to their account. Just check the minimum deposit amount with the credit card provider. The amount is only deposited when customers have the certain minimum amount in cashback. Every provider has a minimum deposit limit.
- Gift Cards- Customers can opt for the gift cards when they have accumulated enough cashbacks for a gift card.
- Reduction of Credit Card Balance- Customers can use the cash backs to settle some of their credit card bills. This will help increase the balance of the credit card.
- Charities- If customers want to donate your cashback rewards, some companies do that too. All that the customers need to do is let the company know which foundation they would like to donate the amount to.
Tips for Cash Back rewards
To make the most of the cash back card, here are a few points to follow-
- Bonus Rewards- Make sure to ask the credit card company about sign-up bonus. Some companies are known to offer AED 500 as bonus sign-up amount.
- Keep Tabs on the Fine Print- Credit card companies are notorious for their legal contracts. The companies don’t give much importance to the fact that the customers might not be acquainted with the changed terms. That is why, it is the customer’s responsibility to be well informed and read the mail.
- Cash Back Percentage- While every credit cards offer cash backs, some offer more than others. Some credit cards offer 1% of the purchase as cashback but there are others that offer 10% in cashback. Look for a credit card that offers a minimum of 5% of the purchase in cashback. Opting for a credit card that offers 1% in cashback is not profitable to customers in any way.
- Optimize Your Spending Habits- A customer should use the pattern of spending to their advantage. Figuring out where they spend the most will help them earn the most cashback. If a customer is going to use most of his/her credit card for household needs, opt for a card that offers the most cashback in grocery shopping. As the type of credit card that customer holds impacts the cashbacks too.
- Payment of Your Bills on Time- If a customer doesn’t want to end up using their cashbacks on late fees and hiked interest rates, bills should be paid on time.
Although there are numerous credit card companies in UAE, not all have the best cashback offer. So here is a list of credit cards which offers 10% of the purchase in cashback in UAE.
- Standard chartered Platinum credit card- This credit card offers 10% cashback on school fees, utility bills, supermarkets. No amount is charged as annual fee. The minimum salary required for this Credit card is AED 5000.
- CBD super saver credit card- This credit card offers 10% cashback on telephone bills, utility bills, transport, education and school fees. This card also offers 2% cashback on other purchases too. The minimum salary required for this credit card is AED 12,000. This credit card has no annual fee.
- Majid Al Futtaim Finance (Najm) Credit Card- on every purchase, this credit card offers 10% cashback. The cashback is automatically credited to the customer’s account. The customer can earn up to AED 500 from cashbacks. The minimum salary required for this credit card is AED 8000. Also, the annual fee of this card is AED 313.
It is relatively easy to earn cashback rewards from the best credit cards in UAE. If a customer can utilize the promotional offers and special occasions, they can earn higher cashback than usual. Even some of the free credit cards in UAE offer the best cashback rewards. Be updated with the fine prints of the companies. Each credit card company has their own set of terms and conditions. Note that the companies can make changes in the cashback credit cards without any repeated notice. So it is important to read the mails from the credit card company thoroughly.