A cashback credit card is a type of card that rewards you with a percentage of your spending back as cash. The cashback rate can vary depending on the card and the type of purchases you make. some cards may offer a higher cashback rate on groceries or gas, while others may offer a flat cashback rate on all purchases.
Each cashback credit card has an accompanying per cent rate (e.g. 5% cashback on groceries). This is the amount you earn back whenever you charge something to your card for a certain spend Take for instance the Standard Chartered Smart Credit Card. It offers 6% cashback on selected digital lifestyle spend This means that if you spend RM100 per month on digital lifestyle subscriptions such as Netflix, Spotify and Kindle, you will earn RM6 in cashback.
When you use a cashback credit card, you earn cashback on every purchase The cashback is typically credited to your account at the end of your billing cycle. You can then redeem your cashback for a check, bank transfer or even on your credit statement.
When choosing a cashback credit card, there are a few things you should consider:
Make sure the stores and brands that you frequently spend at are part of the cashback terms and conditions and not on the exclusion list.
Some cashback credit cards have an annual fee, while others do not. If you choose a card with an annual fee, make sure that the cashback rewards you earn offset the cost of the fee.Always remember to read the terms and conditions of any card.
To figure out the actual percentage of cashback you can earn with every RM1 spent, you can use the weighted average percentage calculation:
Weighted average percentage = the sum of (spending % x cashback rate %)
For example, let's say you have the following spending habits with the Standard Chartered Smart Credit Card:
Merchant Category |
Spending (%) |
Cashback Rate (%) |
Cashback Earned (%) |
Netflix & Spotify |
8% |
6% |
0.48 |
Astro |
20% |
6% |
1.2 |
Steam (online digital video game platform) |
7% |
6% |
0.42 |
Other retail spend |
65% |
0% |
0 |
Weighted average percentage |
2.1 |
This means that you can expect to earn an average of 2.1% cashback for every RM1 spent using the Standard Chartered Smart Credit Card.
Cashback earnings = weighted average percentage cashback x total spending
For example, let's say your weighted average percentage cashback is 2.1% and your total spending in a month is RM10,000. Your cashback earnings would be:
Cashback earnings = 2.1% x RM10,000 = RM210
This means that you would earn RM210 in cashback for spending RM10,000 using your credit card.
You can use the weighted average percentage calculation to compare different cashback credit cards and choose the one that will give you the most cashback for your spending habits.
Provided you use it right, you can enjoy saving money by using a cashback credit card. A cashback credit card is also better than points or miles, which limit your redemption, Cashback is also the most popular category in Malaysia.
A cashback credit card can help you enjoy even greater savings as you can get more cashback on certain spending categories. For example:
Card |
Spending Category |
Cashback Percentage |
Minimum Spend |
Petrol, Online, supermarket, utility bills and top-up e-wallet spend |
15% |
RM2,500 and above |
|
Petrol, dining, utilities, grocery, online dining/grocery delivery and other categories |
5% |
RM2,500 and above |
|
Online, groceries, dining and travel |
10% |
RM500 and above |
|
Groceries, petrol, and dining |
0.25% |
RM3,000 and above |
|
AEON BiG |
5% |
Up to RM2,000 |
*Each category has a different set of participating merchants. For more information, please visit your credit card provider's website.
A cashback credit card can help you enjoy even greater savings as you can get more cashback on certain spending categories. For example, you can save on petrol, groceries and even when paying bills depending on the cashback credit card. So by making use of a cashback credit card that gives extra cashback on the categories that you spend most on, you can rack up even more cashback returns.
See also: Best Credit Cards to Pay Utilities Bills in Malaysia
Sometimes, as an incentive to cardholders, banks may offer introductory 0% interest rates and even bonus cashback for new cashback credit cardholders. Take advantage of it as you can further maximize your savings during this duration. However, do be careful as the introductory offer is usually for a limited time only, take note of the promo duration so you don’t get caught off guard with higher interest or lower cashback returns.
As discussed above, some cashback credit cards require a minimum spend in order for you to be eligible to receive cashback. As such, this may cause you to spend more for that month to receive the cashback amount stipulated by the given card.
Here are the best cashback credit cards in Malaysia to help you save even when you’re spending.
Perks
Requirements:
Perks
Requirements:
RHB Cash Back Visa Credit Card
Perks
Requirements:
Compare and find the best cashback credit card to suit your spending style, HERE. Here are some additional tips for using CompareHero to find the best cashback credit card:
Once you have found a cashback credit card that you are interested in, simply apply for it directly through CompareHero. The application process is simple and straightforward.