What to Look Out For When Choosing a Cashback Credit Card

how to choose a cashback credit card

When you first discover that some credit cards offer you rebates when you spend money, a cashback credit card can sound like a dream. After all, who doesn’t want to receive free money?

But you can’t just sign up for any old credit card and hope to see the money rolling in.

If you want to earn meaningful amounts of cashback, you’ll have to select your cashback credit card with the utmost care.

A well chosen cashback credit card can earn enough to subsidise your mobile data bills or have a nice meal every month. A badly chosen one, on the other hand, is totally useless, except maybe as a coaster for your beer glass.

Here’s a step-by-step guide to picking the right cashback credit card for you.

 

Can you satisfy the minimum income requirement of the cashback credit card?

The good news is that there are lots of good entry-level cashback credit cards.

While fancy premium cards with high minimum income requirements tend to offer better air mile conversion rates and luxury perks, the same generally cannot be said of cashback.

You could say that cashback cards are for plebs, not that we’re complaining.

Still, you’ll have to make sure you satisfy the income requirements of whatever credit card you’re applying for.

Some of the best cashback credit cards in Singapore such as the Citi Cash Back Card and the DBS Live Fresh Card require only an entry level income of $30,000. But to be sure, make sure you check the income requirements before you start doing other research.

DBS logo
Online Promo
Online & Visa Contactless Spend
Cash Back on Online Spend & Visa Contactless
Up to 5%
Min. Spend
S$600
Cash Back Cap
S$60
Online Promo: <div><!--block-->Get S$200 Cashback with no minimum spend! Use the promo code "<strong>DBSFLASH"</strong> when you apply.</div> Valid till 05 Oct 2020.

 

Can you satisfy the minimum spending requirements of the cashback credit card?

Just because you’ve successfully applied for a credit card doesn’t mean you’ll benefit from the fantastic cashback they’ve been advertising on their website.

Most credit cards require you to spend a certain amount every month in order to qualify for their cashback.

Here are some popular cards and their cashback requirements:

  • Citi Cash Back Card – In order to enjoy their 8% cashback on dining, Grab rides, petrol and groceries, you must spend at least $888 per statement month.
Citibank logo
MoneySmart Exclusive
Cashback on Dining, Groceries & Grab
Cash Back on Dining, Groceries & Petrol
8%
Cash Back Cap per category, per month
S$25
Min. Spend per month
S$888
MoneySmart Exclusive: <div>Get a <strong>Sony WH-1000XM4 Wireless Noise-Cancelling Headphones</strong> worth $549 when you apply and spend on your card! Fill in the redemption form after the application to redeem. T&amp;Cs apply.</div> Valid till 30 Sep 2020.
  • OCBC 365 Card – Get 6% cashback on weekend dining in Singapore, and 3% cashback on weekday dining in Singapore or all overseas dining, as well as 3% on online shopping, groceries and recurring telco bills. The catch? You have to spend $600 every calendar month to qualify.
OCBC logo
High Spend on Dining
Cashback on Everyday Dining
6%
Cashback Cap per month
S$80
Min. Spend per month
S$800
  • UOB YOLO Credit Card – The maximum rebate on weekend dining and entertainment is a very generous 16%, while weekday dining and entertainment, as well as online fashion and travel purchases, get you a respectable 3%. But you will need to spend at least $600 per statement month.
UOB logo
Bank Promo
on Online, Grab, Dining and Entertainment spend
Up to 18%
Cash Back Cap per month
Up to S$80
Min. Spend per month
S$600
Bank Promo: Receive S$150 cash credit when you apply! Valid till 30 Sep 2020.

 

Are the spending categories that receive cashback relevant to your lifestyle?

While there are some cards that will offer you blanket cashback on all spending, the most generous ones will usually only reward you for spending on certain things.

There is no point in applying for a card that gives you a ton of cashback on something you don’t spend on. If the card promises to give you 25% cashback on petrol but you don’t have a driver’s licence, it’s about as useful as a third leg.

So do some research on what categories give you cashback.

  • If you’re a shopaholic, you might want to consider the Standard Chartered Spree Card, which gives you 3% on all online spending in foreign currency and all vPost spending, 2% on all online spending in local currency and contactless and mobile payments, and 1% on all other retail spending—with no minimum spending requirement.
Standard Chartered logo
No Minimum Spend for Cashback
Cash Back on Online Overseas Spend
3%
Cash Back on Local Online Spend
0%
Min. Spend per month
S$0
  • If you adore dining at restaurants, consider opting for the Citi Cash Back Card, which offers 8% cashback on dining, or the YOLO Credit Card, which offers up to 16% cashback on weekend dining and 3% on weekday dining.
UOB logo
Bank Promo
on Online, Grab, Dining and Entertainment spend
Up to 18%
Cash Back Cap per month
Up to S$80
Min. Spend per month
S$600
Bank Promo: Receive S$150 cash credit when you apply! Valid till 30 Sep 2020.

 

Are there any other conditions that must be satisfied before you can receive the cashback?

Just because you satisfy the minimum spending requirements doesn’t mean you can assume you’ll walk away with the cashback at the end of the month.

You’ll need to read the find print to figure out if there are any additional conditions that must be satisfied before you can receive the cashback.

  • Let’s take the HSBC Advance Credit Card as an example. The card promises to give you up to 3.5% cashback on all purchases with no minimum spending required. But to get the full cashback, you need to not only spend above $2,000 in a month, but also be an HSBC Advance banking customer.
HSBC logo
Cashback on Big Expenses
Cash Back
1.5%
Bonus Cash Back
3.5%
Min. Spend
S$0
  • The UOB One Card is another one with complicated requirements. To receive their maximum cashback of up to 5%, you not only have to spend at least $2,000 in a month, you have to do it every month in a quarter AND make a minimum of 5 purchases in every statement month. Sure, the cashback is generous, but for some the requirements might be too complicated and too onerous.
UOB logo
Bank Promo
Rebate on Dairy Farm Group, Grab, SP and more
Up to 10%
Rebate Cap per quarter
S$300
Min. Spend per month
S$2,000
Bank Promo: Receive S$150 cash credit when you apply! Valid till 30 Sep 2020.

As you can see, just like finding someone to marry, picking the right cashback credit card takes time and care. The good news is that once you have found your go-to credit cards, you can swipe away knowing that you’re getting a bit of money back each time.

What are your favourite cashback credit cards? Share them in the comments!