Rewards Points and Cash Back in Credit Cards

Last Updated : June 1, 2016, 5:05 a.m.

Credit cards comes with plenty of benefits and features, hence it is quite difficult for all to ignore many comforts and convenience provided by these cards. Moreover, credit cards are not only the best options to use as compared to cash transactions, come with numerous rewards or cash-back options. However, one thing that needs to be mentioned here is the fact that if you randomly choose any credit card, without even knowing its proper usage, you will ultimately destroying its benefits being offered to you. Many credit cards are available these days that offer you plenty of benefits in the form of rewards points and pay back points. So, have you ever tried to know the basic difference between these two so as to avail the complete benefit of your credit card.

Let’s understand below:

Cash Back

When it comes to cash back card , whenever you use your credit card you get a fixed percentage of the amount you spend every time. Moreover, this amount varies from bank to bank, and banks notify you with various upcoming offers on timely basis.

These days numerous leading banks provide you with various cash backs ranging from approx 5-6% on movie tickets, telephone and utility bills.

However, to avail the cash back offer banks usually set a minimum transaction amount on their cards. You need to do that minimum transaction from your credit card so as to avail that cash back offered by the bank.

Not only this, the process of avail the cash back benefits also varies from bank to bank. Different banks allow you to go through with different procedure so as to avail the benefits of cash backs. Some banks come with limited time period to avail the benefits, while some have different terms and conditions with them.

Rewards Points

More to the point, just like cash back, banks provide you with reward points as well. One can redeem his or her reward points on the next purchase via card.

For example-If you have spent an amount of Rs 100 or Rs 200 from your card, you will get 1-5 reward points on your card, depending upon the bank. Different banks have different minimum amount spend limit  of providing the reward points.

Furthermore, one can redeem these reward points while shopping for various products and vouchers through net and phone banking. Once you have the enough collection of rewards in your account, you are eligible to shop for various products using these rewards only, as you don’t need to pay the cash for that.

However, many banks provide you certain time limit to redeem these rewards, beyond that limit your rewards might lapse.