It’s no secret many banks offer credit and debit cards with cashback. Despite the fact those cards offer very small cash back, they’re always in demand. Thus, banks attract a lot of loyal customers with little investment.

But in reality it’s not as good as it seems: annual service fee of cash back cards is usually double that of regular ones, while cashback rates remain low (usually about 1-2%, and the advertised 10% will be available only at certain companies, stores or gas stations), and the worst part – there is a limit on how much cash back you can save up, and even if you spend $50,000 a month, you will hardly receive over $100-200 of cashback. Also, if you shop at, say, Nike that’s available on all cashback platforms and gives 5% of cashback, and choose to pay with such card, you will only receive cashback from your bank (the 2%) – cashback services don’t work with cashback cards – so you lose at least half of the money you could have saved.

Looks like as well-promoted as those cards may be, they don’t save that much money.

Is there any other catch?

The main goal for all coupons, promo codes, discounts, sales and other promotion deals remains the same – to make the customer spend as much as possible since big discounts disable brain’s stopping mechanisms and a person may spend their entire salary on goods they don’t necessarily need – this principle lies at the core of the consumption economy and marketing tricks.

Banks usually offer the largest cashback (up to 10% on selected types of goods and services) for their Visa/MasterCard credit cards, which means every time you make a purchase you take a small loan from the bank that you will pay back at an interest. Debit cards of the same banks tend to get only about 1-2% of cashback, but the bank will feel free to charge you:

  • cash withdrawal commission;
  • opening and annual fees;
  • (possibly) a small cash deposit commission;
  • fees for currency conversion in case you decide to buy something abroad or from a foreign online store;
  • potentially card insurance fee;
  • for online and mobile banking.

And those aren’t all possible and apparent commissions. Since vast majority of clients don’t read the contract when they open a new card (with cashback on their minds) all those additional expenses will come as an unfortunate surprise and will take away any advantage your card might have had compared to other cards that bank had to offer.

Is it worth using a cash back card?

It is, for offline shopping – best cash back credit cards can give you real economy. However, for shopping online we strongly recommend you use online cashback services because they offer at least double the cash back any card will for the same stores. And if you want to try to get cashback everywhere all at once – from the cash back service and the bank – check with the bank first when you open the card if they give cashback for purchase made online via a cashback platform. Some banks allow that.

As you can see, compared to cashback cards, cashback platforms are a way better option, and you can choose the best service on our CashbackHunter rating platform. And, sure, if you ask "what are the best cashback credit cards?" – we will provide you credit card rewards comparison soon.

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