Credit cards may not be the norm in Australia, but they can come with a lot of benefits so it’s important to do your research before you pick and apply to a card. Cash Back Credit Cards are simply what they sound like, they give you cash back for every purchase you make with the card. Other credit cards are often rewards based or have a points system, meaning each purchase makes you eligible for specific rewards or gain points to use on things like flights or restaurants.
Take time to do your research and consider the following criteria when making your decision on the best cash back card for you:
Type Of Cash Back Card:
There are two main types of cash back credit cards in Australia Rewards Cash Back Cards and Cash Back On Spend.
Rewards Cash Back Cards let you earn points each time you use your card, which you then can save up to turn those points into cash that’s credited into your account or a gift card to use at your favorite stores. Be sure to keep an eye out on the expiration dates if you choose to turn your cash back into gift cards.
Cash Back On Spend Cards are a lot more straightforward. Those cards will give you a fixed percentage, typically around 1%, on any purchase you make using the card. Often times, banks will also give you higher percentages for cash back when you use it at certain partnered stores, like grocery stores or restaurants. These cards are easy to use and you can simply watch your account get credited with cash!
A lot of cards will charge an annual fee and this can be a deal breaker for some people. But you may be able to find a card with the same cash back rates but with lower or no annual fees. If you don’t think you’ll use your cash back card a lot or don’t think you can spend that much money, paying a hefty annual fee may just not be worth the rewards the card comes with. You might just end up paying more for the card instead of getting more cash back.
This is another great perk when you sign up for a new credit card. To get you to sign up, a lot of cards will offer you some type of welcome bonus, such as getting $200 back after you spend $1000 within the first 3 months of signing up. Keep this in mind so you can max out your benefits.
How You Spend:
Depending on what you spend your money on, you can maximize the benefits of a cash back card. Some cash back cards are geared towards world travelers, so they may give you steeper cash back rates for spending on flights or travel. Other cards may be more practical for everyday purchases, such as higher rates for shopping at supermarkets or retail stores. It’s important for you to think about your spending habits and pick a card that will benefit you the most. Not all cards are best suited for everyone.
Pay On Time:
While credit cards come with a lot of benefits, you must be responsible and pay your bills on time. Different cash back cards will charge varying interest rates that can range from 10% to 20% if you do not pay off your bill in full and on time. This is a slippery slope and you can end up owing the bank more money than the cash back rewards for using the card can ever offer you. It can end up not being worth it to have the card at all. You should regularly check your credit card statement and think about setting up automatic payments so you won’t ever be behind on your bills.
The amount of cash back you can get from a credit card is entirely dependent on where you spend your money and how much you spend. If you’re a big spender (but of course pays off their bills on time), then you can expect to earn a lot of cash back. A lot times, there will be caps on how much you can earn back, so if you plan on spending a lot with the card, find one that has a higher cap or no cap at all.
There are a multitude of options when it comes to cash back credit cards. When you’re picking and choosing which card to apply for, it’s important to consider what works best for you and your spending habits. Not one card is going to be the best option for everyone.
1. https://mozo.com.au/credit-cards/guides/cash-back-credit-cards-unveiled/84 2. https://www.creditcardcompare.com.au/cash-back-credit-cards.php 3. https://mozo.com.au/rewards-credit-cards 4. https://mozo.com.au/rewards-credit-cards/guides/reward-programs-the-ultimate-guide