What Is a Cashback Credit Card and How Does it Work?

DUBAI, UAE - (ARAB NEWSWIRE) - Individuals choose to use credit cards to pay their bills and expenses primarily because they are convenient. One does not need to write checks or carry cash if they use credit cards. Instead, they can swipe or tap their credit card to complete a transaction. However, with cashback credit cards, there is an added bonus: A cardholder can get back a percentage of their transaction when shopping locally or internationally.

The following illustration will clearly explain how a cashback credit card works. Let's say a cashback credit card in UAE offers customers an opportunity to get 3% cashback on non-AED spending. Therefore, a cardholder spending AED 1800 on an eligible retail purchase through this cashback credit card will get a cashback of AED 54. Over a substantial period of time, the amount of cashback a cardholder accrues on regular spending can be pretty significant!

 

What Is a Cashback Credit Card?

 

Cashback credit cards offer their bearers rewards on eligible purchases they make using these types of credit cards. These rewards are typically in the form of monetary cashback credited to the card account directly. Cashback credit cards provide users with exciting features, benefits, and privileges like:

• Cashback on all eligible domestic as well as non-AED spending  
• Cashback on eligible purchases made from grocery shops, supermarkets, and online shopping

In addition, cashback credit cardholders can enjoy privileges like:

• Discounts and offers on all eligible travel, lifestyle, and dining spending
• Option of Easy Installment Plan for big amount purchases
• Instant cash loan for meeting emergency money needs (conditions applicable)

 

How Does a Cashback Credit Card Work?

 

Although the benefits of cashback credit cards can be straightforward and complex, both are rewarding in their own ways. A cashback credit card allows cardholders to get a percentage of the amount they spend on qualified purchases from stores and online.

At the end of the card statement billing period, the card issuer credits the cashback from the eligible transactions of the previous month to the customer. Cardholders can also redeem their cashback as electronic deposits in their bank account, statement credits, gift cards, or as provided by the issuing bank.

 

Types of Cashback Cards in UAE 

 

Customers can avail the following types of cashback cards in UAE:

1. Rotating Category

In this category of credit cards, the percentage of cashback through which a customer can get cashback may change every quarter. Hence, to reap the maximum benefits of these cards, users must keep themselves updated about changes in the cashback rates. 

2. Flat-rate Category

As implied by the name, this category of cashback credit cards offers customers a fixed cashback rate for every eligible retail purchase. Moreover, a card user has to qualify for certain pre-specified conditions to get cashback via these cashback cards in UAE.

3. Bonus Category

Also known as a tiered credit card, this category of cashback credit cards offers its users varied percentages of cashback depending on their purchase. For example, purchases at grocery stores or fuel stations may earn higher cashback compared to transactions at other places.

 

Conclusion

Cashback credit cards in the UAE unlock a world of exciting benefits for their customers. These credit cards are undoubtedly worthy if their users know how to spend responsibly and which spends qualify for earning cashback. However, users need to be aware of the cashback rate and the qualifying categories to reap the maximum benefits. Also, a user should be mindful of the Annual Percentage Rate (APR) and other terms of cashback cards. Interested customers can check out the extensive range of credit cards offered by many banks and apply for credit cards that match their spending needs.

 

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