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What Is a Cashback Credit Card?

Updated 08 Nov 2018 – By Ng Shen Lee


You’ve probably heard of the term cashback credit cards whenever credit cards come into the picture. Whether it’s in advertisements, television or when you’re just mindlessly scrolling through Facebook, that term, along with “cashback reward programs” have most likely made their appearance in your life more than you like it to be.

So, what is a cashback credit card?

Cashback credit cards are exactly that - credit cards which give you your cash back!

Basically, for every amount spent using your cashback credit cards, you’re refunded a certain percentage of the said amount spent. That is to say, your credit card pays you back! For example, if a card offers a flat-rate of 1% cashback over a billing cycle of one month, and within this one month you spend RM1000 using this cashback credit card, you earn RM 10 back into your account. The cash rebate is deposited back into your account at the end of your billing cycle or is also redeemable as a statement credit or gift cards.

Why do banks do this if it means losing money on their end?

By offering cash rebates to cardholders, this gives more incentive for people to use their card.

Say someone were to lay out four options before you: cash, debit card, regular credit card and cashback credit card. You need to give RM2000 worth of furniture. Chances are you would choose to pay using cashback credit card. Thanks to its attractive 1% rebate, you essentially only “pay” RM 1800, with the remaining RM20 being transferred back into your account as cash rebate at the end of the billing cycle.

What are the different type of cashback credit card?

There are many different cashback rates with each different card and many have very specific categories as well. These are crucial and make a huge difference as to whether you will actually receive any cash rebate at all or if you should even consider applying in the first place.

Cashback categories

Perhaps the most important thing to look out for is the specific spending category. The most common term that people search for is “best petrol cashback credit card”. Other common categories include F&B and groceries.

Take note that not all credit card companies offer cashback for all categories, with most only offering cashback for three or four. So here’s the trick, you can sign up to multiple credit cards to get the most out of each cashback/ Just make sure you’re spending wisely!

A fine example would be the Public Bank Quantum Visa and Mastercard, which are actually two cards and come in a pair. Each offers 5% cashback, but only for specific categories. The Visa for entertainment and department stores, the Mastercard for online shopping and dining. There’s even a cashback credit card specifically targeted for women! The UOB Lady’s Platinum Mastercard offers a 10% cashback rate on groceries and retail fashion.

You might also be looking for a credit card from a specific bank. For example, if you already have a CIMB saving and current account, having a CIMB credit card will make it easy for you to organize both from the same portal.

Cashback rates and tiers

Rates are determined by the bank and vary for each card. Most credit cards offer up to 10% or lower, with the exception of cards such as the Standard Chartered JustOne Platinum Mastercard which offers a cashback rate of up to a whopping 15% for auto bill payments, online shopping and petrol!

This is where tiers come in. Even though the card offers a 15% cashback rate, that’s only if you spend a minimum of RM 2500 a month. Below RM 1000 a month, the rate is only 0.2%! Between RM 1000 - RM 1499, 5% and between RM 1500-RM 2499, 10%.

Which is the best cashback credit card for me?

Each cashback credit card has its own pros and cons for each individual based on factors such as spending ability or what you normally spend on. Luckily, we’ve compiled a list of all of them, including all the details you need to know like interest rates, cashback rates and particular categories! Check the best cashback credit card for 2019 here!

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