What are Cashbacks?
Explain Cashbacks –
Cashback is a rewards program offered by credit card issuers, retailers, and other businesses. It allows customers to earn a percentage of their purchase amount back in cash or a statement credit.
The business behind cashback is that the issuer or retailer offers this as an incentive for customers to use their credit card or shop at their store. They hope to attract more customers and increase sales by offering cash back. Credit card issuers may also make money from the interest and fees associated with credit card purchases.
How does cashback work in Credit Cards?
The working of cashback is as follows:
- A customer signs up for a cashback credit card or shopping program and starts making purchases.
- For each purchase made, the customer earns a certain percentage of cash back, typically a small fraction of the purchase amount.
- The cashback can be credited to the customer’s account as a statement credit or as cash deposited into a bank account.
- Some cashback programs may limit the amount of cashback you can earn, and some can expire after a certain period.
- Some cashback programs may also restrict the types of purchases where cashback can be earned, such as only on specific categories of purchase or at certain retailers.
In summary, cashback is a rewards program offered by credit card issuers and retailers that allows customers to earn a percentage of their purchase amount back in cash or statement credit. It is intended to attract customers and increase sales while making money through interest and fees.
Featured Image Credit: Dealivana cashback & coupons