Skip to main content

Card Cash Back offers Vs Card Reward points

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

"One for everyone. Pick the card that suits you the best! It's good to have a credit card that's like you!" reads a promotional mailer from Standard Chartered Bank. It further reads, " 5 per cent cash back on all fuel spends, all phone bills, all utility bills on Titanium Card." Platinum card offers five times rewards on dining, hotels and fuel and so on. If you see such an offer, will you apply for the cards? Likely; who does not like discounts and freebies? This is why many own multiple credit cards, with multiple benefits. Some go to the extent of saying these benefits help counter the high prices to some extent.

 

If you pay, for instance, an electricity bill of 1,000 using a cash- back card, the card will offer you five per cent of your bill amount, that is 50. You pay only 950 on your card.

 

Reward offers on credit cards work differently. You get cash benefits in the form of coupons or vouchers for a certain number of points collected on purchase through the credit card.

 

For instance, for every purchase through Standard Chartered's Platinum Rewards Card, you collect 3,000 points, which earn you Big Bazaar coupons worth 1,000.

 

Which of these works better for a cardholder?  Collecting and redeeming reward points for lifestyle or other expenses works out better for card holders.

 

Once a customer has collected enough points, s/ he can use those for specified expenses at their will." says a senior official of HDFC Bank. It might not always be different cards that offer cash back and rewards benefits.

Sometimes, the same card offers both these.

 

According to an SBI official, banks discourage customers from cash back cards, as banks as banks have to pay in cash to the customer. With rewards points, banks have nothing to lose. Also, those who really take advantage of such offers are high spenders, making it an expensive proposition for banks.

 

Let's see which option works out better for cardholders. We take the example of Standard Chartered's Super Value Titanium ( cash back card) and Platinum Rewards card. You spend, say, 60,000 a year on fuel for your car. With the cash back card, you will get a five per cent cash back, according to the Standard Chartered banks mailer.

 

However, the actual cash back works out to be 2.5 per cent. Reason: The five per cent cashback offered by Standard Chartered's Super Value Titanium is in fact 2.50 per cent cashback and 2.50 per cent fuel waiver surcharge. This means by spending 60,000, you will get back 1,500 in a year. The fuel surcharge is offered by the rewards card as well.

 

In contrast, the rewards card will give you 3,000 points, which means 1,000 worth of Big Bazaar coupons for spending. This means the cash back card offers a better deal. However, the reward card does not levy any joining or annual charges on the cardholder. However, the cash back card levies an annual fee of 750, which brings down the saving on the card to 750. This makes the total earning on reward cards higher by 250.

 

For small spenders, both these cards offer almost the same deal. However, for big spenders, the cash back card is a better deal between the two. If the annual fuel spend is doubled to 1.20 lakh, then the cash back would be 3,000 and rewards would be worth 2,000. Even if you take into account the annual fee levied by the cash back card, you would get a total cash back of 2,250, higher than the offer on rewards card.

 

Rewards tend to be more when you are opting for lifestyle and related expenses, less when you are looking at regular needs, like Big Bazaar coupons. Also, money is spent first and rewards come later. In the case of cash back cards, you get direct discounts on items you have to buy regularly like fuel or electricity. A 2.50 per cent discount saves on immediate cash outflow. Cash discount frees up cash. Reward points are connected to spending programmes, usually lifestyle- related, which you may not need immediately.

 

A cash back card helps you in two ways. One, it brings home the direct benefit of discounts.

 

Two, it saves you the pain of choosing an item to buy from the reward catalogues, which might not be really worth the price shown. Of course, the benefits of both cash back and rewards are available at select merchant outlets with which the card manufacturer has a tie up.

 

Hence, you might not have too many options to shop. Many times, discounts/ rewards for fuel purchase are available only when you swipe your card on the card issuer's machine.

 

Finally, credit cards should be used judiciously. Keep a record of your estimated monthly expenses that may get cash back.

 

Calculate how much you save if you go with the card. Remember to check on joining if there are any annual fees. Go for it only if you save a decent amount after paying for fees. Do not spend just because there is a cash back offer as you have to pay the outstanding amount lest you'll land in a debt trap.

 

It makes sense to go for a cash back card only if you are a big spender, otherwise the benefits are almost equal

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now