What is cashback?

movilogo

Sorry if the question appears dumb - but I really like to know what exactly is cashback.

How I can get benefitted from it?

Thanx

Penny-Wise_4

It is cash you get back!

On credit cards they usually give you a small percentage of the amount you spend on the cards and which may include balance transfers.

To benefit from cash back you will need to apply for a card which offers cash back and then buy things on it! Check out Martin’s page on cashback cards HERE

movilogo

Thanks - it looks like that Morgan Stanley card will be best for me! I always pay in time and don't pay interest at any time.

PS: On a second though Eggs looks even better!

Bokken_2

Penny-Wise wrote:

It is cash you get back!

On credit cards they usually give you a small percentage of the amount you spend on the cards and which may include balance transfers.

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It doesn't include Balance transfers,.

JohalaReewi

And it isn't usually cash that you get but credit on your account to offset the next bill.

YorkshireBoy

JohalaReewi wrote:

And it isn't usually cash that you get but credit on your account to offset the next bill.

...or in the case of Egg Money, it could be 12 months before you get it as it's paid annually in March!!

uktim29

Be careful when you apply for these though. Sometimes they can have a higher rate of interest if you don't plan to pay it off it full each month.
To get an idea of the value you get minus the cashback % from the interest. Eg
15.9 % APR & 2% cashback = 13.9% APR if you pay the minimum amount.
12.9% & 1% cashback = 11.9% APR so in the latter case even with less cashback you would be better off.
It depends how you use it but bare that in mind.

sloughflint

Consider the amex platinum if you spend a lot like me on CC. After a threhold, you earn 2% cashback. Every little helps.

Anwen_2

uktim29 wrote:

To get an idea of the value you get minus the cashback % from the interest. Eg 15.9 % APR & 2% cashback = 13.9% APR .

Not exactly, because the cashback is just a one off amount, rather than an interest type payment. Though I agree that if you are likely to ever carry a balance (ML has written an article on cashback cards which says why you shouldn't) you're better to have the cheaper APR. Possibly a better solution though would be to have the best cashback card set up to ALWAYS pay off in full and have another card with cheaper interest for any purchases you might need to spread over a few months.