What Is A Cashback In Credit Card & How Cashback Works?

What is a Cashback Credit Card?

Cashback Credit Cards have become quite famous due to their simplicity of usage. A Cashback Credit card gives the rewards in terms of CashPoints which can be converted into real cash. A cashback credit card gives a certain amount of your purchase’s money back on each transaction. The percentage amount given back varies among different categories as per the card’s policy.

Cash-back benefits are real money that may be applied to a credit card payment, received as a cheque, or deposited into a bank account.

How does Cashback Credit Cards work?

To completely understand how Cashback Credit Cards work, go through the following points given below:

  1. CashPoints: The Rewards earned on a Cashback Credit Card are known as CashPoints. These cash points can be earned in different categories like travels, lifestyle expenses, Entertainment, etc.
  2. Accelerated Points: Many times, a cashback credit card provides accelerated Cash Points on certain categories, For Example, the Paytm SBI SELECT Credit Card gives accelerated benefits on transactions done via Paytm. So, a co-branded card, or any other form of collaboration can qualify your card for accelerated benefits of cashpoints. 
  3. Redemption: You can only redeem your cash points after reaching a certain threshold. Once that minimum limit is reached then the benefits earned on cashback credit cards can be redeemed in various ways, you can either get the amount transferred into your bank account or you can adjust it in your credit card bill, you can also use your points to convert into air miles and save your money on next ticket, etc. 
  4. Types: The cashback Credit Cards are of three major types as discussed below, the workings of all these cards are different from each other:
    a)     Flat Rate Cashback Credit Card: This is the easiest type of Cashback Credit Card. With a  Flat-rate card, the cashback in credit card earned in this category is the same across all categories.
    b)     Tiered Cashback Credit card: Several cashback rates are available with the Tiered Cash Back Credit Card. On certain transactions, there is a regular cashback rate, and they also provide "Accelerated Rewards" on specific categories. Accelerated rewards cards are simply cash points or miles earned in addition to the base reward rate.
    c)     Rotating Cashback Credit Card: Rotating Cashback credit cards offer high incentives for designated categories. Those super-high incentives are earned in specified spending categories, such as supermarkets or petrol stations, and those categories vary every three months.

What are some of the top Cashback Credit Cards available?

Some of the top cashback Credit Cards available for you to choose from are mentioned down below:

  1. Axis Bank ACE Credit Card
  2. Paytm SBI SELECT Credit Card
  3. Citibank Cashback Credit Card
  4. HSBC Cashback Credit Card
  5. Standard Chartered Super Value Titanium Credit Card

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