Last Updated on February 26, 2023 by
If you have heard of a website or card that gives you money back after you’ve made a purchase, then you’ve heard about cashback. However, do you know much about the process apart from that simple description? Are there various cashback options? Let’s find out more about cashback account and other alternatives.
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What is a cashback and how does it work?
Cashback is a reward you get for spending money; and the reward comes either from your bank, an online website, or a card in your wallet.
Here’s how it works: When you spend a certain amount of money, the provider gives you a certain percentage back.
Cashback works in several forms and we’ll now explore them.
Cashback Credit Card
A cashback credit card gives you back a percentage of the money you spent as credit, and this money can be given back every month, every quarter, or every year, depending on your card type.
Different lenders give different percentages, and you’ll find many offering higher rates at the beginning and later reducing the rates, while others maintain a standard rate throughout. For some others, your cashback rate will depend on how much you spend and where you spend it.
When should you use a cashback credit card?
Use your card for simple, daily purchases, so that you can pay your bills monthly. In that case, you can avoid interest payments and get your cashback savings.
If you end up buying expensive things you don’t need or you can’t pay for in a short time, you would be overcome with interest payments.
Cashback account
Even banks sometimes offer cashback incentives with online spending, whether on daily shopping or entertainment activities like going to the movies.
Several banks have a limit on the cashback you can earn, so study them and find the one that suits you and your spending habit.
An example of a cashback bank account is Suits Me, which offers unlimited cashback between 6% and 15%. There are a range of cards offered by Suits Me that you can access in a few quick steps, and all you need is an identity card, a driving license, or a passport to open an account.
Cashback sites
Cashback websites are also a part of the cashback process. They are like middlemen as they connect you to other sites when you want to make purchases, and then they reward you for using those sites by giving you a percentage of the commission they made from your visit.
So, whether it is an online store or a vehicle insurance company, you can be sure of a percentage cashback.
These cashback sites can either be free or paid for, depending on the available options. Some even have premium membership at a higher fee.
Whatever the case might be, ensure that you understand all that’s required of you, build your cashback to reach a certain amount, and then consider if you want to upgrade to a premium membership or leave things as they are.
Apart from that, if you are interested to know about Opening a Bank Account then visit our Business category.
