Two experts identified four factors that determine the cashback card's earnings and returns, including type of purchases, maximum monthly usage, annual fees and minimum spending requirements.
The main advantage of a cashback credit card is that it offers its users instant rewards, without waiting to accumulate miles or points that may expire if the cardholder does not remember using them. The majority of cashback cards are simple to use, straightforward to get their rewards, and some have no annual expenses.
The benefits of cash back cards include a refund of a percentage of the value of their purchases in cash. But, as with any card, there are not certain limitations. In general, customers should check the maximum cash advance given that the majority of products to which cashback applies are subject to a monthly cap.
Advantages of cards
Philip King, Global Head of Retail Banking at ADIB, told Emirates Today that the most important advantages of cashback cards are that they allow their holders to redeem a percentage of the value of their purchases in cash but, as with any card, it is not without A certain limitation.
“The cashback amount varies depending on the type of purchase and the maximum monthly usage, in addition to the annual fees and minimum spending requirements. For some cards, such as Abu Dhabi Islamic Cashback Card, users receive cashback on all transactions, whereas in other cards such as Spice, customers receive cashback on certain types of transactions, including restaurants. "In general, customers should check the maximum cash back given, as the majority of products to which the cashback applies are subject to a monthly cap," King said.
high percentage
"Cashback card users can take advantage of these cards by getting a large proportion of the money they spend, but this requires that the usage be done," said Adhil Shetty, chief executive of Bank Bazaar, a banking and information services company. Wise, so as not to spend more than the capacity of the cardholder ».
He explained that «customers should bear in mind, that there are several categories of cashback cards, but most cards require a certain amount of spending to be discounted or cashback», pointing out that «these cards may set a maximum for the monthly purchases that are obtained On a cashback of value ».
50 cards
The Emirates Today monitored cashback cards issued in the UAE, which exceeded the number of 50 cards, and offers many advantages, but the conditions and requirements for the use of each card, makes it necessary to take into account the four key factors that will determine the final cost of that card, these factors Are, salary, interest rates, redemption value, and restrictions.
Restrictions
Cashback cards offer many options for their users, but there are limitations to consider when choosing the right card. In spite of the advantages offered by many cards, their annual expenses can be as high as AED 1000. The bank may charge annual expenses on the amount of purchases that are spent. Also worth paying attention to in these cards, foreign exchange fees when withdrawing from the card abroad or buying in foreign currency, they are often up to 3%.
Salary
The higher the salary, the more benefits these cards offer. In addition to direct discounts on purchases, cashback cards offer benefits such as fast visa transactions when visiting certain countries, free hotel stays, and extra points for purchases other than cashback, which can be converted into miles.
Some cards require the transfer of salary to the bank, in this case offers many advantages to the customer compared to banks that do not require salary transfer.
Interest rates
Interest rates range from 3.25 to 3.5%, according to Emirates Today. Banks do not associate these with salary volumes, for example offering interest rates of 3.25% and requiring salaries of at least AED 7,000. AED 1,000 per month.
Redemption value
The redemption value for purchases varies between 3 and 10%, and varies from one card to another. Some cards allow this value for all daily purchases, without a limit, while others set limits. Some cards specify specific areas or destinations for cashback, and some offer a 50% refund on some entertainment services such as cinema.
U-Points Card
Emirates NBD offers several cash back cards, including the U Points Card, which offers 1% cashback on points for all spending and up to five times if spent on Emaar properties.
The Bank also offers a Platinum Credit Card with an annual fee of AED 700 and an interest rate of 3.25%.
The card offers free access to over 1,000 lounges at international airports, offers up to 30% discounts on over 2,000 restaurants in the UAE, and offers 3% discount on airline tickets or up to 7% discount on holiday packages through the Bank of Dubai office. Emirates National Travel.