Track your spending
Every card offers different cashback reward structures for categories such as groceries, schools, utility payments, fuel, parking, restaurants and golf. Take note of your spending patterns and refer to your older statements to get an idea of the offer that suits you best.
Select a card that offers the highest percentage of cashback on what you buy or spend on the most every month. Also be aware of where the cashback offer is applicable on a particular card. For example, Standard Chartered Bank offers cashback of 10 per cent on school fees, which is a big advantage if you pay tuition fees using a credit card as you can benefit from a maximum cashback of Dh1,000, he says.
Not all programmes offer the same returns. Some cards offer a fixed rate for cashback, while others have differing rates for certain categories.
Know the rate of return
Compare offers to select a card that offers the highest percentage of return. Khattar says, “The higher the cashback return rate, the better it is. It plays an important part in a customer’s value proposition and in customer perception towards [the value of] what he will get when making purchases. Over time, the cashback rates have moved from 2 per cent to 5 per cent and now there are 10 per cent for [some] industry categories such as schools, etc.”
Annual fee
Pick a card with an annual fee only if the cashback rewards in the year are largely above the annual charges. Otherwise, look for products without any yearly payments to maximise your benefits.
Compare payouts
Before you choose an offer, find out the exact terms and conditions of the rebate, i.e., when you will get the money, what the maximum amount will be, how much money is given in different categories, and which segments have no cashback.
He adds, “A consumer must know exactly where they spend in order to take a decision of whether they should be using a particular bank’s card or not. Moreover, some have cashback limit, for example, of Dh500 or Dh1,000. This means no matter how much a cardholder spends on the card, the maximum they get is Dh1,000. Many customers forget or don’t know about this [clause] and keep spending on their card.”
— As told to Hina Navin/Special to GN Focus
