What Is Cash Back?

Cashback often refers to two types of financial transactions related to credit and debit cards that have grown increasingly popular in the last two decades. Most commonly, it's a credit card benefit that refunds the cardholder a small percentage of the amount spent on each purchase, or purchases above a certain dollar threshold.

Cashback also describes a debit card transaction in which cardholders receive cash at the time they make a purchase—generally, a small amount above the item cost.

KEY TAKEAWAYS

Cashback refers to a credit card benefit that refunds the cardholder's account a small percentage of the sum spent on purchases.

Cashback rewards are actual cash that can be applied to a credit card bill or received as a check or bank account deposit.

Cashreward can also refer to the practice of charging an amount above the purchase price on a card, and receiving the extra money in cash then and there.

The Basics of Cash Back

An outgrowth of general rewards programs offered by credit card issuers, cashback programs date back to the1990s. But they have become ubiquitous in the 21st century; nearly every major card issuer now offers the feature on at least one of its products. It's an incentive for existing customers to use the card early and often, and for new clients to sign up for the card, or switch from a competitor's.

Unlike traditional rewards points, which can be only used to buy goods or services or gift cards offered by the card issuer, cashback rewards are (as their name implies) cash. Often presented to the cardholder on the monthly credit card statement, they can be applied to purchases on that statement—to help pay the credit card bill, in other words. Or, consumers may receive the cash-back reward directly, either deposited directly into a linked checking account or the old-fashioned way, through the mail by check.

Visit: https://www.shopasave.com.au/how-it-works