How to get the most out of your cashback card

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Choose an offer according to your expenses and remember that bonuses are not a reason to spend too much.

What is cashback and how is it formed

Many banks promise to return some of the funds you spent. This is called cashback. Where does this money come from? It's simple: in order to attract new customers and keep old ones, a financial institution shares a part of its profits with them.

This is how it works:

• You pay by card, the amount is debited from your account.
• Your bank, payment system and the merchant's bank come into play. Each of them charges a small percentage for their services. The final recipient pays the commission.
• Your bank receives its percentage of the transaction and credits part of it to you in the form of a cashback.

As a result, all participants in the transaction benefit, except for the seller: nothing has changed for him. Although in some cases, for example, with an increased cashback, the bank can promote consumer interest in a particular store.

Example. You have issued a card with a 2% cashback from all purchases and spent 20 thousand rubles in a month. You will be refunded 400 rubles. It doesn't look very profitable. In order for cashback to be useful, you need to choose not the most advertised offer, but the one that suits your spending.

What to look for when choosing a card with cashback

Minimum amount spent

Usually banks have a spending limit: if you spend less than a certain amount, you will not receive cashback. And it's important to understand if these requirements are right for you.

Example. Bank No. 1 offers super favorable conditions for cashback, but you need to spend at least 30 thousand rubles. The second has a lower "entry threshold", but the minimum amount spent is only 10 thousand. If you spend on average 15 thousand rubles a month, the bank card number 1 is useless for you, no matter how attractive its conditions may seem.

Real percentage of cashback

Carefully read the conditions for calculating cashback. It often happens that they can be different for the same card.

Example. The bank promises to return up to 10% of expenses for taxi services, up to 5% - for cinema, wine and dominoes, and 1% - for all expenses. The minimum amount spent is 10 thousand rubles. Sounds great. But if you read more carefully, it turns out that there is a fork:

• Refund of up to 10% of expenses on taxi services, up to 5% - on cinema, wine and dominoes, and 1% - on everything with a total spending of 40 thousand rubles or more.
• Refund of up to 5% of expenses on taxi services, up to 2.5% - on cinema, wine and dominoes, and 0.5% - on everything with a total spending of 20 thousand rubles or more.
• Refunds up to 2.5% of expenses on taxi services, up to 1.25% - on cinema, wine and dominoes, and 0.25% - on everything with a total spending of 10 thousand rubles or more.

It doesn't look so amazing. It is better to discover these nuances before you issue a card and be disappointed.

Cashback limit

The bank is not a charitable organization, therefore there is a maximum amount of cashback payments. Somewhere we are talking about several thousand rubles, somewhere - about tens of thousands. Pay attention to the limit, but not mindlessly: in some cases, conditions will simply not allow you to approach it.

Example. You choose between cards with a 3% cashback for everything and a limit of 3 thousand rubles and a return of 2% with a limit of 15 thousand rubles. You spend an average of 50 thousand per month. In the first case, the cashback will be 1.5 thousand rubles, in the second - 1 thousand. There is no point in choosing bank # 2 just because of the limit.

Additional terms

Additional conditions for receiving a bonus may be specified in the agreement. For example, the percentage is returned only from a purchase not cheaper than a certain amount. All this must be taken into account.

Cashback categories

As we have already figured out, a low cashback for everything is not the ultimate dream: if you do not spend huge amounts, they will return a little. Banks understand this too, so they introduce increased cashback in some categories. To choose a profitable offer, you need to analyze your spending.

Example. You spend 20 thousand rubles a month, of which 6 thousand for groceries, 4 thousand - for meals in the canteen, 3 thousand - for cafes and restaurants, 1.5 thousand - for cinema, 3 thousand - for gasoline, 2, 5 - for all the rest.

Bank # 1 offers 10% cashback for the purchase of gasoline and 2% for everything; bank number 2 - 5% for cafes and restaurants, 5% for groceries and 1% for other expenses; bank number 3 - 3% for everything.

Bank	Cashback
1	300 (gasoline) + 340 (everything else) = 640 rubles
2	350 (cafes, restaurants and dinners in the canteen) + 300 (groceries) + 70 (everything else) = 720 rubles
3	600 rubles

Bank number 2 is more profitable, but it will only work if the spending in your canteen goes into the Cafes and Restaurants category.

Expenses are categorized automatically, depending on the payment terminal settings. If nothing is specified in the settings, the decision will be made by the bank itself. It so happens that even the terminals of points of the same network give out different categories. If the bank offers an increased refund for the "Cafes and Restaurants" category as a whole, then everything is in order. But if he singles out "Restaurants", "Fast food", "Food delivery" separately and offers an increased return on only one of them, this increases the risk that you will receive cashback in a smaller volume.

Please note that some banks allow you to independently decide in which categories to receive an increased cashback, or choose specific places for this.

Card service

And again you have to calculate: if you pay a little less for servicing the card than you return the money, the game is not worth the candle.

Additional bonuses

Sometimes there are pleasant conditions for a card with a cashback that are not related to a refund. For example, the calculation of interest on the balance. By this criterion, banks' proposals are also better compared.

Payment term

Not the most critical criterion, which is still worth knowing about, so as not to worry. Usually cashback is returned when the bank is sure: all the money you spent went to the recipient, you are not going to cancel anything. For some, a few days are enough, others need a month. So check exactly when to expect cashback.

The main rule: before signing an agreement with a bank, read it carefully. A lot of interesting things can be found in it.

How to get more cashback

Logically, the first should be the obvious "Spend more" advice, but this is a trap. Cashback is an opportunity to return part of the funds for what has already been spent, but this should not encourage you to spend extra. Refusing to buy is still more profitable.

If spending is unavoidable, you can try to get a little more.

Pay for everyone

If you are going in a big company somewhere where you have an increased cashback, offer to pay for everyone. The bank will return your cashback from the entire amount, and your friends will give their part of the spent.

This method is suitable only for disciplined acquaintances, from whom you will not need to beat debts later.

Get some cards

If you really spend a lot or the minimum amount spent to get a cashback is small, it is useful to have several cards from different banks and pay with them where there is a higher percentage of return. With the card of one bank, you will pay, for example, for fuel and cinema, another for cafes and household chemicals.

Plan your purchases

If the bank periodically changes categories with a higher cashback or offers additional refunds for purchases in some stores, it makes sense to plan expenses in order to participate in the promotion and get more.

Do I need to pay taxes on cashback

Cashback is not considered income. From the point of view of the law, this is a bonus for participating in a loyalty program, for which you need to spend money. The FTS believes that there is no need to pay taxes for this.