Debit cards give you access to money that you already own and do not owe, unlike credit cards. Managing living costs with the help of this card means you are trying hard to keep your expenses within limits. Although it is very much possible, sometimes things take a nasty twist.
You encounter payouts that are not included in your budget. They make you nervous and unprepared. Sailing through such a situation is not easy when you are dependent on debit cards.
It is because they do not offer too many perks like credit cards. However, this might not be the case with you if you choose cashback debit cards. Maybe the present one does not provide you with rewards or advantages.
It means you will have to switch accounts to another bank which is offering a debit card with a cashback facility. There are circumstances when you might have to seek financial aid because of the extent of requirements.
For example, you want to buy a car but cannot rely on the cashback feature of the debit card which holds your earnings. However, you can depend on savings, which will take time to take the desired shape. In this case, looking for guaranteed car finance with no credit check feature might make sense.
In addition to a deposit amount, you can arrange the desired sum to make up for the car cost with these loans. These types of purchases need a considerable amount of cash, which cannot be created with cash back on the go.
By reading through this blog, arm yourself with details that can help you understand this type of debit card closely.
Cashback debit cards: what does it mean?
The other name of it is rewards debit cards. Therefore, the plain meaning of it is that you can earn points or percentages on the allowed purchases. It will be calculated from the purchase amount you spend, and the percentages can vary from 1% to 10% depending on the merchants.
Please note that you will gain rewards if you shop from the partnered retailer. The offerings of this card might vary as you can receive discounts, vouchers or direct deposit of cash into your linked account. You can cash in them in different ways based on your necessities.
The utilisation is entirely upon you. Do not misuse the extra earned cash or rewards. Planned management of this cashback can prevent you from getting loans for Christmas with no credit check requirement.
A loan means accepting a form of debt and paying extra for what amount you have borrowed. If the money deposited in your account as cashback is significant, it will let you complete all the Christmas purchases in a hassle-free way. However, with loans, you can get access to needed money just when you want, which might not be the case with these cards.
Besides, you can take advantage of the vouchers or discounts to buy gifts for your near and dear ones this festive season. The other uses could be:
- Utilise the cash to buy groceries
- Spend the money while eating out
- Refurbish home ahead of the festivity
- Getting new clothes after saving enough with a cash deposit
- Purchase accessories for the car, etc.
What can you expect from a cashback debit card?
The amount of reward you can extract will depend on the card issuer and, of course, the scheme of the retailer. Nevertheless, these cards let you make money by spending money, which is not a bad idea. It is because you can make use of the rewards or returns while sponsoring other purchases.
The best way to reap the benefits of these cards is to switch retailers. If it is profitable for you, why not do this? Despite the fact that you can earn limited cashback, you cannot deny the other positive things about these cards.
1. Prevent growing of debt
If you are a spendthrift person, you must be trying very hard to control this habit. Instead of emphasising other ways, you can use this type of card. It will allow you to make money on every occasion you spend money.
This way, you will be contributing less to debts. Besides, you can utilise the rewards or cash deposits in tackling other payouts without depending on the credit card. Therefore, you can keep the card balance within your range.
2. Minimises cost
By using these cards, you are actually downsizing the overall cost. Subtract the amount you have earned through them from the amount you paid for the purchase. You will see how the final amount has been reduced.
Besides, by researching extensively, you might find cards that do not impose additional fees monthly or annually for this facility. It means you will not overburden your pocket to make the most out of this special perk. You do not even have to bear any interest charges and other fees by sticking to mindful use of this card.
3. Surplus features
Depending on your debit card, some will allow you to enjoy ATM withdrawals without paying any extra. Check with your card issuer to ensure that such and other overdraft fees are not part of these cards.
How are they different from credit card rewards?
If you want to explore cashback debit cards, this question will strike your mind. To your surprise, you will come to know they might appear to serve the same purposes. It is about cashing in on the purchases you make with them for further returns.
However, some differences between the two will still exist.
- Building credit – You cannot create or improve credit history by using cashback debit cards. On the other hand, credit cards are a good option when it comes to building credit.
- Rewards – Unlike a debit card, you can earn more rewards and enjoy more offers with a credit card.
The bottom line
A cashback debit card also imposes pros and cons on its users. You must have enlightened yourself on how to use this card best. Be careful about the negative points.
Emma Anderson is a financial advisor at Quickloanslender who always believes in researching hard to know her clients’ financial problems. She takes the time to understand their financial wants and needs to write the blogs on them as the solutions. In her long 14 years of experience, she has written plenty of blogs on the financial and business sectors of the UK.
Emma Anderson has been recognised for her work in financial planning and her blogs are regularly published in the website of Quickloanslender. As far as her educational qualification is concerned, she has done Masters in Accounting and Finance, and done PG Diploma in Creative Writing.
