Earn rewards in dollars rather than points with a cashback credit card.
This type of credit card gives you cash rewards for your spending. There are a few different types of cashback offers available on the Australian market, with some cards offering a one-off cashback payment as part of a special promotion and others earning cashback as a percentage of your spending. Some reward credit cards also let you convert your rewards to cashback on your account. You can use this guide to compare cashback credit card options, learn how they work and discover how you can get the most value out of this type of credit card.
American Express Credit Card Offer
With an American Express Essential Credit Card, you can receive $50 credit to your account and enjoy a long-term balance transfer offer, without having to pay an annual fee for the life of the card.
- $0 p.a.
- 14.99% p.a. on purchases
- 0% p.a. for 12 months with 1% balance transfer fee on balance transfers
- Up to 55 days interest free
- Minimum Income Requirement of $40,000 p.a.
Compare Cashback Credit Cards
Guide to cashback credit cards and offers
How do cashback cards work?
A cashback credit card gives you rewards in the form of dollars or credit on your account. These offers vary between cards, with some earning cashback as part of an ongoing rewards program and others providing a one-off cashback reward offer for new customers.
In fact, there three main ways you can earn cashback on your credit card purchases, which we've outlined here:
- Instant cashback when you make an eligible credit card purchase. For example, if you make a credit card purchase of $1,000 and there is a 2% cashback promotion, the credit card provider will give you $20 back.
- Cashback promotional offers on sign up. Some cards have a cashback promotion for new customers. These offers usually require you to apply before a set date and spend a specific amount within the first few months you have the card.
- Cashback via a credit card rewards program. As well as using points for flights or merchandise, some credit card rewards programs give you the option to redeem your points for cashback on your account.
Is there a catch?
Just like other reward credit cards, you need to meet the spending requirements or eligibility requirements to earn cashback. For example, cashback may only be earned on "eligible purchases", with common exclusions including cash advances, balance transfers and refunded purchases. Some cashback credit cards may also cap or limit the amount of money you can earn per month or year. Make sure you read the card's Product Disclosure Statement for more information.
Compare credit cards that allow you to redeem rewards points for cashback
How can I compare cashback credit cards?
Here are the key details to look at when you're comparing different cashback credit card options:
- The cashback amount. Weigh up the value of the cashback you can earn based on your spending habits and the overall cost of the card (i.e. the annual fee and purchase rate). This will help you decide if the rewards are worth it.
- Reward caps. Some cashback cards limit the amount of money you can get from them. For example, you might be able to get 1% cashback per $1 but have a limit of up to $20 per month.
- Introductory offer requirements. If the cashback reward is offered as a special promotion, make sure you understand the terms and conditions before signing up. Depending on the offer, you may want to look for the date the offer expires, spending requirements or participating retailers to take advantage of the cashback reward.
- Ineligible transactions. While most everyday purchases are eligible to earn cashback rewards, transactions such as cash advances, bill payments, gambling transactions and credit card fees are usually ineligible. Check these details before you get a card to decide if it suits your spending habits.
- Rewards value. If you have a card that earns points and want to redeem them for a cashback reward, check to see if there are other rewards (such as flights, travel upgrades or merchandise) that have a retail or regular price value that is higher than the cashback amount. This will help you get the most value out of your rewards.
- Annual fee. Weigh the card's annual fee against the cashback you expect to earn to work out how much value you'll get from the rewards. Ideally, the amount of cashback you get should be worth more than the annual fee.
- Other card features. Make sure you also consider the card's standard variable purchase rate, as well as any additional charges, fees and complimentary extras. Along with the rewards and annual fee, these features will help you decide if the card suits all your needs.
What are the advantages and drawbacks of cashback credit cards?
Weighing up some of the pros and cons could help you determine whether a cashback credit card is right for you.
- Money in your pocket. This type of reward offer gives you the chance to get money back for paying with plastic.
- Dollar value. Instead of earning points per $1 spent, cashback credit cards offer a straightforward dollar value for the rewards you earn.
- Other extra features. Credit cards with cashback promotions may offer other features such as complimentary travel insurances, rewards programs and concierge services.
- High annual fees. Credit cards with cashback rewards charge a higher annual fee than no-frills credit cards. Ideally, the value you get back from the rewards should be higher than the annual fee.
- Rates of interest. If the cashback offer is a feature of a more premium product, you may find that it comes with higher interest rates. Make sure you can repay the amount you've charged for the cashback (as well as other purchases) before the end of the statement period.
- Limited rewards. Some cashback credit cards may have a cap on the number of times you can redeem a cashback offer. For example, some many only allow you to receive the cashback once, while others may allow you to take advantage of it up to a capped amount of times in a set period.
How to apply for a cashback credit card
If you've decided you want a cashback credit card, you can apply online in around 10-15 minutes via a secure web service. But before you apply, make sure you meet the eligibility requirements and have the necessary documents needed to complete your application. These will vary from card to card, but you can usually expect the following eligibility:
- Age. Cardholders must be at least 18 years of age.
- Residential status. Most credit cards require cardholders to be permanent Australian residents, though some do offer products to specific visa holders.
- Minimum income. The minimum income requirement will vary between cards, but they usually start at $15,000 p.a. for low income cards and between $60,000 and $100,000 for higher-tier products.
- Credit history. All Australian credit card issuers require applicants to have a good credit history.
Necessary documents and information
- Proof of identification. You'll be required to provide a copy of your driver's licence, Medicare card and/or passport for proof of identification.
- Proof of income. You'll be asked to provide your employer's details, as well as a recent tax return and/or payslips. If you're self-employed, you'll need to include your accountant's details.
- Financial information. You will need to provide other information about your finances including debts, liabilities and expenses.
Once you've provided all of this information and hit "submit", you should receive a response regarding your application within 60 seconds. If you're approved, you'll receive your card in the mail within 1-2 weeks. If the card has a cashback offer, you should read the Product Disclosure Statement to confirm the terms and conditions and when you can expect to receive the cashback credit in your account.
If you're looking for a new credit card, a product with a cashback offer could provide you extra incentive to pay on plastic. While cashback offers can be rewarded, they always come with terms and conditions, so make sure you understand what these are and compare your options before you apply for the card.
Popular questions about using cashback credit cards
How much cash can I expect to get back when I spend?
While the cashback rate varies from product to product, most cashback returns are somewhere between 1-2% of the total value of the transaction. This figure can jump when you look at merchant and retailer bonus cashback rewards schemes, or when a fixed rate of cashback is offered (ie. $20 or $50 when you first use the card).
Can I use cashback to pay the annual fee or my credit card debt?
Yes, you can generally use cashback rewards to pay your card's annual fee or the outstanding balance of a credit card.
Are there any business credit cards that offer cashback?
Not currently, as of 1 July 2017 there are no business credit cards which offer cashback.
Where can I find out more about cashback and rewards points capping?
We include the relevant information about cashback and rewards points capping on our cashback credit card review and application pages. If you're interested in a specific cashback credit card or rewards program, you may also want to read through the Product Disclosure Statement provided by the credit card issuer. This will outline the full terms and conditions of the cashback offer or rewards program.