A Detailed Overview of Cashback Credit Cards

The general concept of cashback is undoubtedly an alluring one. You are spending your money to purchase something, and then getting some of it back surely prompts everyone to make the most of these opportunities.To further help you in this endeavour, financial institutions have introduced cashback credit cards.

What are cashback credit cards?

Cashback credit cards are nothing but regular credit cards with one exception. You receive reward points when you swipe your average credit card to make a transaction. In this case, you get cash back, which can be later credited to your account, and you can adjust it during credit card bill payments.

Having said that, cashback credit cards can offer this facility throughout the year, or for a certain period, like festivals. Furthermore, this facility is usually available for selected items and brands. 

So the question is, how does it work? Well, a percentage of your transaction amount is received as cashback. For instance, your credit card offers 1% cashback on every food that you order from a particular app. So if you spend Rs 1000 on that app, you will get Rs 10 as cashback.

Now, as stated earlier, you can get this amount as cash to your account or available as credit card bill payment offers, where you can get a discount on the final amount.

Moving ahead, there are two subtypes of this credit card type –

Fixed-rate: In this type of cashback credit card, the cashback rate remains the same irrespective of how, when and what you use it for.

Dynamic rate: Well, in this case, the rate of cashback alters depending on the product or service and the company you are purchasing it from. For instance, one credit card may offer you 1% cashback on grocery shopping but increases to 3% when you buy fuel.

With all the features and types out of the way, let’s understand the points you must consider before applying for this credit card.

Top 3 things to know before choosing a cashback credit card

Additional fees

Additional charges are the first point that you need to consider before applying for a credit card. These charges include joining fees, annual charges, etc. Now, these charges can increase your total cost of maintaining a card. So you need to find a credit card with no additional charges.

Late payment penalties

The next point for you to remember here is the late payment charges. If you fail to pay the bills on time, you have to pay a penalty with your credit card bill. 

EMI facility

Lastly, you must check for the EMI facility before applying for a credit card. The reason here is that if you think you cannot repay the amount in full, you can use this facility’s help to convert it into easy EMIs, which will help you repay the debt easily.


To sum up, credit cards offering cash back facilities are undoubtedly a great financial tool. So, use it wisely and enjoy the hoard of benefits it brings.