As you spend money on your credit card, you’ll accumulate a cash reward. How this is paid as cashback will depend on the terms set out by your credit card provider. Often, it’s taken off the balance of your credit card account after a set period of time, say, annually. Or, money could be paid directly into your bank account. Some providers will even give you the option of turning your cashback into a charitable donation.
There may be a cap on how much cashback you can get, so make sure you check the terms and conditions carefully. Like other types of credit card, there’ll be a limit to how much you can spend on a cashback card. If you go over that limit, you’ll be charged and this could affect your credit rating.
Rewards-based credit card products, such as cashback, only work for you if you can generally pay off the card in full each month. That’s because any money you could get in cashback is likely to be exceeded by the interest you’ll be charged by not meeting the repayment.