Cashback rewards on your credit card means you can redeem your points for almost everything.
Some of the most popular reward program features is the cashback. This includes vouchers or credit that you can redeem your reward points for. One of the biggest advantages of cashback rewards is that you can buy your own rewards from your favourite retailers - great for those who don’t have time to browse through rewards and catalogues.
Comparison of credit cards with cash gift cards as part of their rewards program
Types of cashback rewards programs
There are three major types of cash rewards programs:
- Cashback on application. This is when you receive a gift voucher for being approved for an eligible credit card. Usually there are terms and conditions so make sure you read the fine print to be eligible.
- Cashback as part of their rewards program. Points based programs allow the cardholder to save up all the points they want, which they will then redeem for cash which can be credited to the account to pay annual fees, charges or pay down their balances.
- Store vouchers as part of their rewards program. There are reward points programs which allow you to redeem your points for shopping vouchers and gift cards. You can save all the points you want and redeem them for gift cards to your favourite retailers, allowing you to literally choose your own reward for spending money using your credit card.
Popularity of cashback reward credit cards
Cashback credit cards have proven to be very popular because of their simplicity. These rewards provide you with the opportunity for redeeming reward points for vouchers that are easy to use, or even cash credited straight to your account which you can use towards the annual fee.
These type of rewards are great for those who don’t have time or the patience of looking for a worthwhile reward. It’s also incredibly useful when you want to use your rewards for everyday spending, as the rewards are nearly as good as cash.
Comparison of credit cards with cashback offer
How much is a cashback worth?
To truly understand how much your cashback rewards are worth, we crunched the numbers on two credit cards.
Comparison between Citi and Amex cardsWe compared the Citi Reward Signature credit card with the American Express Platinum Edge credit card to see which card will return more value for cashback rewards. While the American Express Platinum Edge is clearly a winner, it’s important to remember that American Express generally has a higher points earning ratio compared to Mastercard or Visa. Citi credit cards are eligible for their fine dining program where you can get a free bottle of wine every time you dine at eligible restaurants.
|Citi Reward Signature Credit Card||American Express Platinum Edge Credit Card|
|Points per $1||1.5||3|
|Equivalent in cashback||$159.60||$533.30|
|Ratio based on||$100 Citi Prepaid Gift Card - 18,800 points||$100 Coles Myer Gift Card - 13,500 points|
|Difference in comparison to annual fee||- $39.40||+ $338.30|
*This comparison doesn’t take into account your personal situation and is used as a general demonstration. All fees and points earning rates are correct as of 18/10/2013.