Not a high spender? Here are two credit cards that earn you 5% rewards
₹10 lakh annually, a higher disposable income, multiple credit cards to optimize every spend, extreme planning to redeem rewards for the best deal and, finally, expensive annual fees charged by the cards. If all this doesn’t sound like your cup of tea, there is a simpler option for you: a cashback credit card. The rewards system with a cashback credit card is simple–a percentage of the amount you spend with every swipe is paid back to you.
This could range from 1-10%, depending on the card and type of spend. The money given as cashback gets deposited in your bank account or digital wallet directly without you having to worry about redeeming it with a partner merchant. This rewards system would also suit people who are new to the credit card culture, said Ankush Setia, co-founder, Multiply, a credit card discovery platform.
“The card owner doesn’t have to figure out partners to redeem the rewards and the best redemption rates across those partners. These are no-frills cards and the customer knows exactly what they will earn," he said. “Cashback cards are best suited for those with spends on the lower side.
Credit cards that help earn air miles yield value to only those with higher spends," said Sumanta Mandal, founder, credit card and personal finance adviser Technofino. Reward rates on cashback cards vary only to the extent of spend categories. For instance, most cards don’t offer cashback on rent and fuel, while shopping on popular online merchants, such as food delivery apps Zomato and Swiggy, e-commerce platforms like Amazon, Flipkart, Nykaa, etc., generally earn higher cashback of 2-5%.
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