Cashback cards are a different version of credit card which offers benefits in form of cashback rather than the reward points and feature available on the card. These cashback benefits ranges from 3% to as high as 10% of card expenses, sometimes even upto 20% of the transaction value.
The cashback cards tends to return great value as compared to rewards credit cards. However, mostly comes with low reward benefits.
Cashback credit cards are usually better than in return value as compared to rewards credit cards. Rewards cards usually offers return value of Rs. 0.25 to Rs. 1 on spending of each Rs. 100. On the other hand, cashback credit cards offers 3% to 10% return value on each Rs. 100 spent on the card.
The cashback earned on a cashback credit card is retained in the credit card account as a reward point and redeemed into cashback on demand. Or, you can also redeem them against purchasing gifts and online transactions from reward catalogue and partner brands, giving you the similar redemption feasibility as rewards credit cards. However, in the case of few credit cards like CITI cash back card, the rewards points are automatically redeemed against credit card bills. Hence, the cardholder doesn’t have the liberty to redeem the points against gifts.
The cashback credit card has a major flaw which is the limitation assigned by the bank on the maximum cashback a cardholder can earn in statement month. Whereas, the rewards credit cards have no such limits usually unless specifically communicated by the bank.
Since the cashback is retained as reward points which gives you more than one redemption options, the bank also charge you a redemption fee equal to around Rs. 100. Whereas, the credit cards which doesn’t have such obligation are free from this additional cost for redemption.
There are a number of cashback credit cards available offered by different banks/FIs. However, these credit card usually have less attractive benefits and rewards as compared to rewards credit cards.
Bharat Cashback Credit Card by HDFC Bank, is one of the few very popular credit cards. The credit card comes with a low annual fee of Rs. 500 which can be easily waived off. The Bharat Cashback card offers flat 5% savings on railway bookings through IRCTC, fuel expenses, bill pay and mobile recharges. Apart from that, you also earn flat 5% cashback on all EasyEMI, PayZapp and SmartBUY transactions. The maximum cashback is limited to Rs. 300 each month on the card. Additionally, you save upto Rs. 250 each month on fuel surcharges.
Similar to Bharat Cashback Card, the Bharat Credit card from HDFC Bank is also a cashback credit card which offers upto Rs. 300 cashback each month. However, the bharat credit card has one additional spending category as compared to Bharat Cashback credit card. You get 5% cashback on all of your grocery spending along with 5% cashback on railway bookings through IRCTC, fuel expenses, bill pay and mobile recharges, EasyEMI, PayZapp and SmartBUY transactions. You also save upto Rs. 3000 on fuel annually.
This is a cashback credit card offered by Citibank and comes with an annual fee of Rs. 500. The Citi cash back credit card gives you flat 5% off on movie ticket purchases along with 5% discount on telephone bill payments as well as utility bill and telephone bill payments (combined). You can earn a maximum of upto Rs. 100 under each of these categories. Additionally, you earn 0.50% cashback on all the categories other than the ones mentioned above and upto 20% cashback on your dining bills.
Moreover, the cashback is automatically redeemed against credit card bills. Hence, saves you from the redemption process as well as fee.
The Prosperity Cashback Plus Card offered by YES Bank, comes with an annual cost of Rs. 1500. The cardholder earn flat 5% discount on Movie Ticket bookings, Grocery Shopping as well as Bill Payments through YES PayNow. Additionally, you get 0.75% Cashback on all of your other spendings on the card. Apart from that, you also save 0.10% on international transactions and receive multiple lifestyle offers time-to-time from different partner brands in selected cities.
Similar to the Prosperity cashback plus credit card, the Prosperity cashback card from YES Bank also gives the equal value in cashback benefits. Except that you earn only 0.50% on other spending as compared to 0.75% on Prosperity Cashback plus credit card. Although, it’s annual fee is Rs.500 lower.
The PRIME Credit card offered by the Bank of Baroda offers 1% discount on all of your credit card spending, which is quite less as compared to the other ones mentioned above. However, it is offered against a security of at least Rs. 15,000 fixed deposit account. Although, the credit card comes free of cost.
This credit is pretty high on cashback benefits as compared to the ones mentioned above. You can save upto Rs. 600 each month on dining and entertainment where the maximum transaction amount should not be more than Rs. 4,000. Apart from that, you also save upto Rs. 4500 on fuel surcharges and upto Rs. 500 on railway expenses, annually.
The kotak PVR platinum card comes with an annual charge of Rs. 999 whereas the kotak PVR gold credit card comes with an annual fee of Rs. 499 only. The Platinum cards offers upto 2 PVR movie tickets each month in return where your monthly billing amount should be at least Rs. 10,000 or above. On the other hand, you earn one free PVR movie ticket on monthly billing of at least Rs. 10,000 and second ticket on total monthly billing of Rs. 15,000 minimum. However, the maximum benefit value one can earn on both the card is limited to Rs. 9,600 per card membership year.
The Aqua Gold Credit Card and the Fortune Gold card by Kotak Mahindra Bank, both offer a cash back value of Rs. 750 if the cardholder spent Rs. 1.50 Lacs in a card membership year. However, these two cards are zero annual fee credit card which is a big plus point about them.
Before choosing the right credit card, the applicant must know the difference between a cash back credit card and rewards credit cards. Not only it helps you choose the best credit card for you but also help save more rather than just increasing you spend.
The cashback credit cards usually are low in terms of benefits whereas the rewards credit cards are pretty good in terms of features offered on the card. The cashback cards are comes with a flat discount under various categories as well as shopping at partner brand stores. Whereas, the reward credit card have comparatively low straight forward benefits but are pretty rich in features and services such as complimentary airport lounge access, free golf games, incremental reward benefits on purchasing partner brand products.