Who does not like earning while spending? This may not sound unrealistic, but it is very much possible with credit cards. Credit card cashback is a rewards initiative wherein cardholders receive a portion of their spending amount back on purchases. This cashback is either applied as a credit to the cardholder’s account or offset against upcoming bills, reducing the overall cost of transactions. When utilising a credit card for a purchase, a specific percentage of the transaction amount is refunded to the cardholder as cashback. The exact percentage is contingent on the card’s terms, conditions, and the nature of the transaction.
Cashback may take the form of a fixed amount or a percentage of the transaction value and could be subject to limitations such as a cap or minimum spending requirement. Optimising cashback rewards requires a strategic approach. Here are some tips to help you increase your cashback rewards.
How To Select?
The first step to cashback success lies in selecting a credit card that aligns with your spending habits. Many credit cards cater to specific categories such as groceries, dining, travel, or fuel. By identifying your most frequent expenses, you can choose a card that offers higher cashback rates in those categories.
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Everyday Expenditures
There are several credit cards that provide cashback on routine purchases such as groceries, dining, and utilities. Optimising cashback earnings involves selecting a card tailored to your most frequent spending categories.
Online Shopping and Bill Payments
Credit cards often collaborate with online retailers or specific e-commerce platforms, offering elevated cashback rates for transactions made on these websites. At the same time, settling recurring expenses like utility bills, phone bills, and insurance premiums through credit cards can yield cashback. Some cards extend higher cashback rates specifically for such bill payments.
Adhil Shetty, CEO, Bankbazaar.com, says, “Online shopping has become a significant part of our lives, and credit cards often have tie-ups with e-commerce platforms. Take advantage of higher cashback rates for purchases made on these sites. Look out for exclusive deals and discounts tied to your credit card for added savings.”
Rotational Cashback
Certain credit cards introduce categories with enhanced cashback rates (e.g., dining, travel, fuel) on a rotating basis, typically each quarter. Participating in these programs and aligning purchases with these categories can substantially boost cashback rewards.
Special Deals
Credit card companies regularly roll out special promotions that provide extra cashback for expenditures in specific categories or with designated merchants. Opting for substantial purchases such as electronics or appliances can serve as a means to accrue substantial cashback, particularly when coupled with special offers or discounts.
Travel and Loyalty Rewards
Certain cards focus on travel-related perks, extending cashback benefits for bookings involving flights, hotels, and car rentals. Credit cards affiliated with loyalty programs, such as airline miles or hotel points, often grant additional cashback on top of the earned points, enhancing the overall reward.
Bundling Multiple Offers
Astute users frequently combine diverse offers and rewards programs to optimize cashback. This may involve utilising cashback portals or apps alongside credit card rewards for a comprehensive approach to earning rewards.
Shetty suggests, “Look for cards that offer enhanced cashback rates for big-ticket items, especially when combined with special promotions or seasonal sales. Making substantial purchases, such as electronics or appliances on festive offers, can be a strategic move to accumulate significant cashback and earn points.”
Whether it’s online shopping or large purchases, understanding the nuances of cashback programs help you to make the most of your credit card and enhance your overall savings. In fact, you can save on a daily basis if you start making full use of your credit card rewards.
