Cash Back on Credit Card?!

apple82

Apologise if its a dumb one.

I am new to credit card business hence:eek:

OK so I have a cap one card with 200 limit. not planning to take cash out as its way too expensive but if I pay with the card at super market and is it even possible to take cash back? if it is then do the bank take it as cash taken out or what?

YorkshireBoy

You can't (generally*) get cashback on a credit card.


* I understand some pub landlords will do it. I've also seen it posted that Wilkinsons do such a 'service'. In both cases the transactions go through as a purchase.

[Deleted User]

No. Cashback is not offered on credit cards.

Having said that, it's often said that Wilkinson's do offer this, though they shouldn't. In that instance, it would go through as a purchase.

grumbler

Deleted_User wrote: »

.... they shouldn't... .

Why?
I think it's just a matter of higher fees that retailers pay on CC transactions. If Wilkinson are happy to pay this fee for giving you cash, then there is no reason why they shouldn't do this.

RobTang

grumbler wrote: »

Why?
I think it's just a matter of higher fees that retailers pay on CC transactions. If Wilkinson are happy to pay this fee for giving you cash, then there is no reason why they shouldn't do this.

I would assume because the transaction type is different, ie they cant mix a cash advance transaction with a purchase transaction.


or they are only allowed to do cash advances in certain situations (eg. foreign exchange)

RichyRich

I believe it to be against the card scheme rules for retailers to give cashback on a credit card. However, as others have said, there are some retailers that will do it anyway. In my experience pubs are more likely than other retailers, but didn't know Wilko did it.

grumbler

If these rules really exist, they make no sense.
CC companies make money from the fees that retailers pay.
They don't make money from ATM withdrawals and probably even pay for them. Hence the fee for the customers and higher interest rate.

If a retailer is happy to pay the CC purchase fee for giving a cashback (i.e. make loss on this part of transaction instead of profit) then there is no any reason for the CC company not to be happy either.

yangptangkipperbang

RobTang wrote: »

I would assume because the transaction type is different, ie they cant mix a cash advance transaction with a purchase transaction.

There is no reason why anyone cannot do cash back on a Credit Card.
The main reason that most people don't do it is the high commission the retailer pays.

If you buy £5 of groceries and ask for the £50 cash back on a debit card, the retailer pays the same flat charge for handling the transaction as if you had just paid the £5.

On a credit card he pays a percentage (say 4%). If you pay for your fiver's worth of goods he pays 20p. If he gives you £50 cash back he pays £2.20 - not good business sense !

Pubs are the most likely to do this to keep you in their premises and spending !

apple82

Thank you all for your replies and help. :T

RobTang

yangptangkipperbang wrote: »

There is no reason why anyone cannot do cash back on a Credit Card.
The main reason that most people don't do it is the high commission the retailer pays.

I don't care about the commission, its irrelevant.


Its more on the CC side as they fee structure for cash advances and purchase are different (where as they are not for a debit card).


Now I'm making the assumption the processor will only receive one amount one amount, so the CC company can't apply the correct fees to your transaction or worse apply the cash advance structure to your purchases.


However given the costs why would someone actually want withdraw cash on they cc anyway.


On a side note my CC charges £2 per ATM withdrawal, so at least one is making money from ATMs.

lisyloo

However given the costs why would someone actually want withdraw cash on they cc anyway.

The exception is foreign cash.
Halifax clarity charge 0% currency commission.
There is interest on the borrowing at 12.9% but if you can make on-line faster payments you get charged nothing or a few pence for 1 day.
Even if you don't have internet access on your holiday, it's still often the cheapest way to take foreign cash out and avoids the risk of carrying loads of cash around.