Take advantage of the cashback incentives being offered by financial institutions.
With the increasing competitiveness of the financial market, lenders are looking for more and more ways to reward you for signing up for one of their products or services. Cashback offers let you receive a monetary reward in the form of cash or a gift card from the financial provider when you sign up for one or more of their products.
What are the different types of cashback offers?
There are a few different types of financial products and services that offer cashback offers. Take a look at your options below:
Credit cards with cashback offers
- How it works: Credit card providers may offer you a certain amount of money in the form of cash or a gift card. A cashback incentive may be offered by the lender in conjunction with other benefits, such as a 0% balance transfer rate, discounted fees or rates or any other introductory offers. These are usually offered for a limited time and you would need to apply by a certain date.
- What to watch out for: Remember to check the rates and fees associated with the card to see if the cashback offer is worth it.
Home loans with cashback offers
- How it works: Home loans offering cashback incentives have become more common recently. The amount you are offered as part of the cashback is usually considerably more than you would be offered with other financial products, because a home loan is so much more of a financial commitment.
- What to watch out for: Choosing a home loan provider is not a decision which should be taken lightly. You should consider the cashback offer as an added bonus and nothing more. You should also familiarise yourself with all other fees and charges that you will incur when you sign up for the loan so you can better determine if the cashback offer will be of much value to you.
Transaction accounts with cashback
Financial packages with cashback offers
- How it works: Some financial institutions try and encourage you to get more of their products by offering you a cashback incentive. They may offer you this cashback when you sign up for an account with them and then link it to another recently acquired product, such as a home loan or credit card. Not only are you rewarded with money, but keeping your financial products together is a convenient way to track your finances.
- What to watch out for: Make sure you check all the associated rates and fees of all of the products you are planning to sign up for. If you do not want the product on offer, then you may want to reconsider taking it up.
What are the pros and cons of cashback offers?
- You can choose to put the money towards your purchased product or service or spend it on something for yourself.
- The cashback offer is not an amount that is attached to the loan so will not incur any extra fees or rates.
- This kind of offer does not improve the quality of the product or service.
- You may find the cashback offer wasn't of much value to you after your sign up due to the amount of fees and interest charges.
Compare cashback offers
When looking at cashback offers or any other kind of sign up incentives, it's important to compare your options before you decide which one to go with. You can look at the fees and charges associated with each product and also the rates you will be charged. Using this information, you can calculate the approximate amount you will be paying with these products and then determine the actual value of the offer. For example, you may receive a $3,000 cashback offer, but if you pay $1,500 in introductory fees then you should consider it a $1,500 cashback offer.