What is cashback and how does it work?

Have you ever heard of the term cashback? Cashback is part of credit card 101 and is a kind of incentive credit card issuers give to their cardholders. However, cashback is different from the rewards or points you earn with your credit card. Normally, you cannot earn both cashback and points from your credit card.

In this article, you’ll learn what credit card cashback is and how it works.

What is cashback?

As the name implies, it is cash rebate you get from spending money on certain goods and services each month using your credit card. Cashback helps with reducing expenses, especially if you are a frequent shopper. By taking advantage of cashback offers, you can receive a percentage of your purchases back in the form of cash.

How does cashback work?

Most cashback credit cards give you a certain percentage of your purchase back in the form of cash, although some cards have different offers for different types of purchases. For example, you might get 1% cashback on all of your purchases, or 5% cashback from groceries and gas. There are also some cards that offer rotating categories, so each quarter you might get 5% cashback on a different category like dining out or travel.

For instance, Metrobank Cashback Visa credit card holders can get up to 8% in rebate when spending on groceries, telecommunication and internet bills, tuition fees, and bookstore purchases. Plus you also get 0.20% rebate on all other purchases.

To qualify for the 8% rebate, you need to spend at least PHP 12,000 on non- grocery, non-telecommunications, non-school, and non-bookstore related purchases. If you don’t reach the minimum spend, you still get 0.2% rebate on all your spend.

Keep in mind though that not all credit cards have a cashback. In fact, most credit cards will either let you earn points or cashback, but not both.

What are the benefits of using a cashback credit card?

There are a few key benefits of using a cashback credit card.

Cashback cards work the same way as any other credit card - You can use it to fund your daily expenses or to get 0% installment rates on big ticket items like a new phone or laptop.
It can help you save money on your everyday purchases - If you use your card for all of your regular expenses like watching movies, gas, and dining out, you can quickly earn a significant amount of cashback.
Some cashback cards have extra benefits - Apart from giving you cashback, some cards offer additional benefits. These range from discounts, shopping perks, or even sign-up bonuses. For instance, Metrobank’s Cashback Visa Card has a Cash2Go option which allows you to convert your unused credit limit to cash.
You can get gifts when you sign up - If you’re a new to Metrobank cardholder and you get approved for a Metrobank Cashback Visa card, you can get up to PHP 11,000 rebate as welcome gift! This special promo is for applcations until December 31, 2022.
You can also use your cashback card online without needing to worry about your security - Credit card companies always have your security in mind, whether you’re shopping physically or online. For instance, when using your Metrobank Cashback Visa Card to purchase something online, you’ll be sent a Secure Online Shopping - One Time Password (OTP) to authorize the transaction, regardless of the transaction amount.

Is there a fee to redeem cashback?

Most issuers do not charge a fee to redeem your cashback, but it is always best to read the terms and conditions of your card, or ask a representative. Issuers may also have different ways on how you can redeem your cashback, or and majority put acap on the cashback you can earn in a month. For instance, you can earn as much as PHP 1,000 in rebates in a month, and you can redeem your cash rebates in increments of PHP 1,000.

What do I need to sign up for a cashback credit card?

If you’re interested in getting a cashback card, consider applying for a Metrobank Cashback Visa Card! It lets you get up to 8% rebate on groceries, telecoms, school and bookstore purchases when you reach the minimum outstorespend of PHP 12,000 a month. Head to your nearest Metrobank branch or visit https://www.metrobankcard.com/apply and prepare a valid ID and proof of income.

Valid IDs accepted include:

Driver’s license
PRC ID
Passport
UMID
TIN ID
PWD ID
All other valid ID issued by the Philippine government and its instrumentalities per the Bangko Sentral ng Pilipinas

For employed individuals, these can serve as your proof of income:

A copy of your latest Income Tax Return (ITR) duly stamped as received by the Bureau of Internal Revenue (BIR) or its authorized agent bank (BSP Circular No. 472 as amended) and/or of your BIR Form 2316 duly signed by the employer
Copy of last 3 months’ payslip from date of application
Original Copy of Certificate of Employment (COE) (Only for Top 1,000 corporations – must contain name, position, date of employment and Gross Annual Income)

For self-employed individuals, these can serve as your proof of income:

Copy of your latest Audited Financial Statement (AFS) with bank or BIR Stamp.
Copy of your latest Income Tax Return (ITR) duly stamped as received by the BIR or its authorized agent.

For foreigners, these can serve as your proof of income: