A cashback credit card earns you cash rebates when you use it for retail purchases and bill payments. Let’s look at some of the common mistakes associated with a Best cashback card and how to avoid them:
Not opting for the card that suits your lifestyle the best
When you decide to own a cashback card, you are required to conduct a research for yourself and get the card that suits your lifestyle the best after much-needed evaluation. One of the most common mistakes you can make while choosing a card is choosing a card that earns you cash rebates with retail transactions that do not support your shopping needs. A cashback card can be of many types including one that earns you rebates on retail purchases and a card that gives you a cashback on petrol purchases. So if you do not drive on a regular basis, the petrol cashback card can prove to be wrong choice.
Saving rewards points for too long
There are cards that do not earn you a cash rebate directly. These cards earn you rewards points with your purchases made using them. You can accumulate these points and redeem them to get cashback as well as to enjoy multiple offers and deals. One of the most common mistakes is saving these rewards for a long duration. You should always be aware that the rewards points come with a validity period and saving them up for longer than that duration can result into losing the cashback.
Spending unnecessarily just to earn cashback
Another mistake that is seen commonly made by cardholders is making unnecessary purchases just in order to maximise the rebate. You should not forget that you might earn the cash rebate but charge your card too much on the way. It is recommended not to use your card just to get the cashback and plan before spending.
Not knowing the rebate cap
Your cashback card has a monthly, quarterly or yearly cap on the rebate earned. If you use your card anywhere and everywhere without knowing the maximum limit of rebate obtainable, you might actually harm your credit score. So it is suggested to read all the terms and conditions associated with your card before using it. Ignoring the maximum limits of rebates and important terms and conditions can result into rupturing your finances.
Ignoring foreign transaction fee
You can earn rebates when you use your card within the country as well as overseas. But you should always keep in mind that the overseas purchases will also charge you with an overseas transaction fee. So if you use your card overseas, you may end up paying more and saving less.
Not keeping an eye for latest deals and promotions
You are also required to keep an eye on the latest promotions, deals and offers released by the card issuing bank. This can help you enhance your savings. If you don’t pay attention to these deals and promotions, you may end up losing a huge amount of cashback. You can check the promotions on the bank’s page or subscribe to the latest offers to make sure that you don’t miss out on these opportunities.
Using a card for too long even when there are better options available
If you have a cashback card that doesn’t give you latest offers with your purchases or it is too old and charges you with higher fees, it’s better to move to a new card. You can discontinue your old card and switch to a newer card that you find attractive and provides you with more benefits than your current one.
Not using the card at right place
If you own a card, you are required to know its full potential. If you do not use your card at the right place, you are likely to miss out on multiple opportunities like discount offers and deals. You should know the true potential of your card, the merchants where you can use it to get the best deals, and the duration where the rate of earning rebate is higher. For example, PETRONAS Maybank Visa by Maybank earns you higher TREATSPoints on petrol and grocery purchases during the weekend. So it’s better to shop for the same during weekends in order to increase cash rebates earned.
Getting the card just for the sign-up bonus
You are also suggested not to get a card just after getting influenced by an advertisement. There are a number of cards that provide you with an attractive sign-up bonus, but can prove inefficient in the longer run. So it’s recommended to do a thorough research and find the card that serves you the purpose for a longer term than the one that comes with just an attractive sign-up bonus offer.
Owning a card with higher rate and annual fee
When you decide to own a cashback card, you are required to filter the research further with taking all factors into account. If you’re targeting just the cashback part and ignoring the annual fee, interest rates, and other fees and charges associated with a card, you may end up saving lesser than you intended to. You are required to know all the important information about the card like its annual fee, interest rates, late payment charges, over-limit fee, and other charges before getting it.
A cashback card can serve as your best financial companion on a daily basis, but you are required to take some vital steps in order to maximise savings and minimising the risk involved. You can avoid the above-mentioned mistakes by reading the terms and conditions associated with your card and researching thoroughly before starting using it.