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Why you should check your cashback card Ts and Cs

As you’re taking a long and well-deserved sip of your second cortado, your eyes wander to an advertisement in the paper – cashback on your credit card spend! You phone your bank to find out what it has on offer, and the consultant gives you a basic rundown of the range of cashback cards. Before the consultant has even finished, you find yourself saying yes to the card.

You’ve opted for the cashback option that gives a percentage of your spend back to you, in cash – not points or vouchers or similar, but money in the bank.

You do your spending, tally up the cashback amount you’re expecting to receive and then when the statement comes… zip, zilch, nada. You’re not getting the cashback you were expecting, and now you’re experiencing buyer’s remorse. Where could you have gone wrong?

Check the terms and conditions. Reading the terms and conditions can often feel like your eyes are just skimming over the words, not really taking anything in. But it’s worth it to skim across to the cashback section, which will reveal much about the conditions for earning cashback. Here are some topics to watch out for.

Card mismanagement could lead to penalties

The cashback section of the terms and conditions will state whether you will lose your cashback bonus if you don’t stick to the card rules – for instance, if you miss your payment dates or don’t pay the minimum amount.

You need to reach a minimum spend 

Some cashback credit cards may require you to spend a certain amount before you qualify for cashback. This could leave you running up a credit card bill that you never anticipated. In order to make the most of cashback, it’s important to know whether your budget is able to accommodate the minimum spend.

If you’re hoping to use your cashback card to consolidate credit card debt, the terms and conditions are worth the read. The cashback offer often only applies to new purchases, not to balance transfers. 

Cashback is capped 

‘Capped’ is not a word you want to see when it comes to cashback, but it happens. Credit card providers can cap the amount of cashback you can earn. If your credit card spend goes above the cashback limit, you might want to consider opening another card with a different credit card company in order to maximise the amount of cashback you can earn.

You may also want to do some research, as there are credit card companies that offer uncapped cashback on your spend, but make sure that the cashback benefit outweighs the costs and fees that may apply. Some card companies may even upgrade high spenders to a different card or higher tier if they meet the minimum requirements.

Cashback only kicks in at certain retailers

You’ve decided to go with a store-brand credit card because you often do much of your shopping in that store, but when you get your statement you realise that your cashback amount is far lower than you expected.

With a store-brand card, you may earn a higher percentage on your spend with that store than with other retailers. For example, you may earn up to 1% cashback when you shop with the store and only up to 0.2% when you shop with other retailers. This is a significant drop and can place a damper on your budget.

You may also find that certain retailers only offer cashback on spend at their stores, and this cashback is in the form of vouchers. Not quite the cashback you had anticipated!

The cost outweighs the benefits

You might find a cashback card that ticks all your boxes and seems to offer a healthy cashback portion but has a hefty annual fee attached. You may also find that some credit card companies charge an additional fee for a rewards membership, which could negate the benefit of the cashback.

When deciding on the credit card that ticks all your boxes, it’s important to weigh up all the options out there.

Whether you’re after rewards, cashback, 0% interest offers or a credit card to help you build your credit, our list of the top credit cards has cards that may be right for you.

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