Cash back allows a cardholder to earn a certain % of cash rewards from the credit card purchases. There are different types of credit cards which offer cash back feature to the customers. Most common type of cash back cards are:
- Flat rate: They offer fixed flat rate cash back on all purchases.
- Cash back by categories: The % of cash back varies by spend categories or merchants. List of categories or merchants could be fixed or changes over time.
- Cash back rewards for payments made on the card
Keep in mind that not every purchase may earn cash back. Balance transfers, for example, may not be eligible. As with all credit cards, you need to make sure to read the terms and conditions and consider how you will use the card when determining if it’s right for you.
How to redeem cashback?
Cashback can be redeemed any time or after accruing a certain amount of cash like $25 before redeeming. This varies by the issuer’s cash back program.
When redeeming cash rewards, you generally have a few options:
- Statement credit: (Most popular): You can redeem accumulated cash back for a statement credit. This way, you can apply earned cash back toward your credit card balance.
- For online shopping: Different issuers have partnered with merchants and offer redemption of cashback points against the purchase at the merchant website.
- Some issuer can convert cash back into other rewards currency like rewards points.
- Gift cards
- Check: You can request a bank deposit or a check for the cash back amount.
Check the cash back program from your issuer to understand the cash back redemption options.
