Cashback

A number of credit card issuers now offer incentives to use their cards ranging from airmiles to cashback. Cashback is a method whereby subject to certain conditions each purchase made using the card is totalled up and at the end of say a 12 month period a minimum of 0.5% of the total expenditure is credited to your card account as a rebate or cashback.

Every time you use a card in a shop or online the retailer is obliged to paid the card company a fee, perhaps 1% rising to 3% flat of the transaction amount. It is from this income source that the card issuer provides the rebate.

Please note that cash advance amounts are usually excluded from these arrangements.

Cashback is only offered by a small number of card issuers but is viewed by some consumers as an attractive discount on purchases they make. At certain times the card companies run special deals and increase the percentage cashback to encourage greater usage of the card and to gain new users.