Free money! Now that we’ve got your attention, learn about cashback credit cards.
Compare Cashback Credit Cards
Compare Credit Cards with Rewards Program that allow you to redeem points for Cashback
Compare debit cards with cashback on purchases
Compare Credit Cards with gift cards or vouchers as part of their rewards program
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What are the best cashback credit cards*?
There are many different types of credit card rewards. Some credit card providers reward you with frequent flyer points, some offer points in a specific rewards program, like Woolworths Everyday Rewards or Commonwealth Bank points, and some just give you cash as an incentive for spending on your credit card.
A cashback credit card does what the name suggests: you get cash back when you spend on the credit card. Some provider also give you cash back when you take up a special promotional offer, like a balance transfer.
How do cashback cards work?
There are three ways you can earn cash back on your credit card purchases:
- Cash back via a credit card rewards program. You’ll need to manually redeem your points for cash back with this option.
- Instant cash back when you make an eligible credit card purchase. For example, say you make a credit card purchase of $1000 and there is a 2% cashback promotion, the credit card provider gives you $20 back.
- Cash back when you take up a promotional offer. Some products have a special promotion, like a balance transfer offer, you get cash back or a cash equivalent gift when you take up the deal.
For instant cash back and cash back via rewards, cash back is only given when you make an eligible credit card purchase. Transactions like cash advances are ineligible for cashback rewards. Check the credit card’s terms and conditions for a full list of transactions ineligible to earn rewards.
How can I compare cashback credit cards?
One way to compare credit cards which offer cashback rewards is to work out how many points you’ll earn each year, and how much this equates to in cashback value.
If you will spend $30,000 on your credit card in one year, and have a platinum card which earns an average of 1.5 points per dollar spent, you’ll earn 45,000 points.
Say your program allows you to trade 45,000 points for $150 worth of cashbacks. This equates to 300 points per $1 of value, and is one way to compare other cards—by working out how much it would cost to earn the same $150 of rewards value.
Remember that the annual fee needs to be subtracted from this final value to work out the true payoff of any rewards card. Say the annual fee is $90, this means 45,000 points will actually only net you $90 of rewards value. This is another way of comparing the value of a cashback card.
The important things to remember:
- Know how much you plan to spend on the card.
- Pay off the entire balance at the end of the month. Cash back means very little if you’re accruing interest on your purchases.
- What’s the product’s annual fee. You have to spend more on a card with a high annual fee before the value of the rewards is greater than the cost to own the product.
- Also remember to compare the cashback offer against other credit card rewards options. Perhaps converting points to gift vouchers will give you a better return.
There’s more than a bit to think about before you enter into the world of cashback and credit card rewards. Do your due diligence and compare cashback credit cards so they don’t end up costing more than they’re worth.
How can I make money with a Cashback card?
You’re probably wondering how much money you can actually make with a Cashback Credit Card. Consider the following:
- Total spend. You only get back what you put in. Your total eligible spend will dictate the cashback return, unless there’s a cap.
- Rewards cap. Does the credit card provider have a cap on the number of rewards points you can earn in a month, or is there a limit on the value of cash back you can get. This information is available in the product’s fine print and on our credit card review and application pages.
- Ineligible transactions. Also consider the type of purchases you’ll make on your card. Not all transactions are eligible for cash back. Cash advances, paying some bills and paying credit card fees and charges are considered ineligible transactions. Gambling purchases are also ineligible to earn cashback rewards.
The general rule is that Australian cashback customers can earn up to 1.4% cash back, after the annual fee is deducted, as a percentage of purchases according to analysis from Credit Card Finder.Back to top
What are the advantages and drawbacks of cashback credit cards?
This may help you decide whether a cashback credit card is the right type of credit card for you.
- Money in your pocket. Every time you spend you’re getting something back. Every return in value is a bonus, no matter how small.
- It’s not just about the cash. Most credit cards with a cashback rewards program also have free goodies on offer like insurance, a concierge service and some even offer complimentary passes to airport lounges too.
- Don’t like cash back? Some credit cards that offer cash back when you make an eligible purchase also offer other ways to get rewarded. If cash back isn’t your thing, you may be able to accrue rewards points that can be used for gifts, gift cards or flights.
- The annual fee. Credit cards with cashback rewards generally charge a higher annual fee than low rate credit cards. Make sure your annual spend is high enough so the value you get back from the rewards is higher than the annual fee.
- Rates of interest. These cards do offer interest-free days on purchases. But this is only if you pay your balance off in full each month. Rewards credit cards generally have a high purchase rate of interest. If you don’t pay off your balance, this type of credit card will cost you more than a low rate of low fee product.
- Points cap. Some of these cards have a cap on the number of rewards points you can earn or a cap on the value of cash back you can receive over a period of time.
What else should I take into consideration?
- Balance transfers. Excluding cashback credit cards that offer an incentive for carrying out a balance transfer at the time of application, it’s not a good idea to get a cashback credit card when you want to do a balance transfer. A balance transfer often voids any interest-free days on the credit card, meaning interest is charged right away. Interest charges are sure to negate any rewards value. Go for a balance transfer credit card instead. If you really want the cashback rewards, you can always have two credit cards. One for the balance transfer balance and one for earning cashback. Some balance transfer credit card also don’t charge an annual fee.
- Annual spend. Most cashback credit cards charge an annual fee. If the product is a no annual fee cashback credit card then great, any spend on the product is an instant bonus. However, if the card does charge an annual fee, you need to make sure you spend enough on the card so the return value of the rewards is greater than the cost of owning the credit card.
How to apply and use a cashback credit card
Nearly all credit card applications can be completed online. Once you’ve compared products, and you’re ready to apply, follow the application links on our cashback credit cards review and application pages. You’ll be directed to a secure online application on the credit card provider’s website. Make sure you have the right information on hand to complete the application. You can read up about all the documents you need to complete the application on our review pages.
You should have a response shortly after you complete the credit card application and submit any additional information. Once full approval has been granted you can elect to pick your card up from a branch or you can have it sent to you in the mail, usually within a fortnight.
Cashback is a nice bonus for spending on your credit card. But don’t let the bonus go to the bank. Make sure you pay off your card in full each month to avoid interest charges and if the card has an annual fee, spend enough on the card to get out of the red.Back to top
Frequently asked questions
How can I find out more about a cashback credit card?
If you have any questions about a cashback credit card that we have not answered on this page, or the product review pages, ask us a question using the form at the bottom of the article and a member of the finder.com.au will be in touch to assist you with your question.
How much cash can I expect to get back when I spend?
While the cashback rate varies from product to product, a general rule of thumb for cashback returns is somewhere between 1 and 2% of the total value of the transaction. This figure can jump up when you look at merchant and retailer bonus cashback rewards schemes.
Can I use cashback to pay the annual fee or my credit card debt?
The good news is yes, you can generally put the cashback rewards to pay the products annual fee or the outstanding balance of a credit card. It’s your cash, you can use it how you want.
Where can I find out more about cashback and rewards points capping?
We include all relevant information about cashback and rewards points capping on our cashback credit card review and application pages. Read our product reviews for an overview of the features, benefits and
* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from. ‘Best and ‘Top’ are ratings which are subject to our consideration and is not rated against all Australian credit cards. We recommend you take this information into account when comparing credit cards.