Shop Canada's Best Cashback Credit Cards

Cashback Credit Cards

For all the spending you do on an everyday basis, getting anything back for it is always a welcome bonus. Considering whatever interest rate or annual fee you’re paying on credit cards, it’s about time you claim back any money you’ve spent, even if it isn't much. Using cashback credit cards, you get good returns on expenditures through incentives allowing you to receive a percentage of whatever you have spent. If you pay your credit card statement on time on a regular basis and could use a few bucks every so often, cashback cards are viable alternatives to regular cards.

What Are Cashback Credit Cards and What Are Their Benefits?

Cashback credit cards are cards that offer cashback rewards and other perks after making various card purchases. You can get cash back on gas if you use your card at a supporting gas station. Also, whenever you pay bills, shop at your local supermarket or for other everyday expenses, you can get money back. For instance, if your card pays 1% cashback and you spend $250 on groceries during a particular outing, you get $2.50 back.

There are various cashback credit card types that you can access. Some cashback cards offer flat rates of cashback on every eligible purchase. These cards allow you to get the same rewards rate everywhere you go so you don't hesitate to use it at certain locations. Other cards offer bonus spending categories, meaning you can get a cashback rate in one outlet while getting another rate everywhere else you spend. There are also cards that come with rotating categories that change every few months. Most cashback cards come with no annual fee, so the cashback you get isn't offset by such charges. However, some cards used for travel purposes come with high annual fees, though they also offer higher cashback rates.

Cashback credit cards are beneficial for you given their flexibility. They don't function like other rewards card types that may limit your spending options or contain blackout periods. You can use the cash you've earned on your card to pay for travel, merchandise or help you pay off your card balance. While you may not think one or two percent cashback is much, it will come in handy when you really need it. The more major purchases that you make on your card and the more you are able to pay off your balance on time, then the more money you get and can put aside.  

How Do Cashback Credit Cards Work?

Before knowing how a cashback card work, you should be evaluating your spending habits and determining if getting such a card is worth it. If you're not a big spender and seldom use credit cards in general, a cashback card is not for you. You have to spend a lot, to get the cash back that you may be hoping for. The card will only fit you if it matches with a buying habit you're developing or having trouble curtailing over time.

When you apply and are approved to get a cashback card, your bank will likely offer a sign-up bonus for you to use the card as much as possible from the jump. Some will provide higher than usual cashback rebates on purchases for the first few months. Others will waive foreign currency conversion fees on overseas purchases for an extended period. You’ll also find some welcome bonuses featuring a low balance transfer rate for a few months or will offer a flat cashback rate. Read the fine print before jumping all over the chance to get one.

Some cashback credit cards come with caps on how many points you can earn over months, a quarter, or a year. You will also find that some cashback credit cards offer cash value perks such as gift cards, which work as long as you plan to redeem them. Furthermore, you’ll have to register your card online to earn the accelerated rewards.

One more thing to consider is the annual percentage rate (APR). Once you keep paying off your balance, there’ll be no interest charges to worry about. If you’re known to make one or two late payments, interest charges spike. Some cards come with an introductory APR, but it helps to know what that rate will jump to once the period is over.

How Do You Decide What Type of Cash Back Credit Card to Get?

No matter the card you decide to get, you will need to have a good credit score to get the real benefits. You can get a card despite an unimpressive credit history, but you might find it too expensive to maintain because you aren't guaranteed lower interest rates or higher payouts. It also isn’t recommended that you get multiple cashback cards to try and get more cash to use, because that can damage your credit score.

Decide on the card you want based on your most predictable spending habits. If you go to the same gas station, shopping mall, or another venue every week and they accept these cards, use them every chance you get. Cashback cards promote strategic spending as long as you're not spending above your means. You can utilize the various categories that cashback credit cards offer and regulate your spending while improving your credit score.

Check the protection types the card has when you’re selecting one. Many cashback credit cards afford you extended warranties, purchase protection to prevent unauthorized usage, among other things. If you’re a student, there are cashback cards that help you get discounts at some of your favourite stores, though those come with spending incentives too. Gas-specific cashback cards will offer free roadside assistance in case something untoward happens to you when you're travelling. Other cards will provide you with the chance to get discounts on car rentals among other cost-efficient perks. From benefits to fees to redemption flexibility, getting a cashback credit card can be a worthy investment.

Compare the top cashback credit cards in Canada on shoptherate.ca and apply for one today!