Cashback credit cards

Using a cashback credit card for everyday spending means you get rewarded with cash into your account.

By   |   Verified by David Boyd   |   Updated 30th October 2020

Comparing cashback credit cards

ANZ Cashback Visa Platinum Credit Card

ANZ Cashback Visa Platinum Credit Card

Cashback

Up to 1% on any domestic spend

Cashback cap

N/A

Minimum spend

N/A

Sign up bonus

N/A

Highlights

  • Get up to 1% cashback on spending.
  • $125 p.a. annual fee.
  • Comes with complimentary overseas travel insurance.
ANZ Cashback Visa Credit Card

ANZ Cashback Visa Credit Card

Cashback

Up to 1% on any domestic spend

Cashback cap

N/A

Minimum spend

N/A

Sign up bonus

N/A

Highlights

  • Get 1% cashback when you spend between $10,000 and $30,000.
  • Get 0.5% cashback when you spend between $5,000 and $9,999.
  • $60 p.a. annual fee.

Overview

A cashback credit card offers a rebate on all your credit card purchases, including everyday purchases such as groceries, dining, petrol, transport and utility bills. Depending on the card, users can typically earn back up to 1% of their spend. Credit cards that earn cashback allow users to save a little bit of money on every eligible purchase transaction they make.

Only eligible purchases earn cashback

You won't earn cashback, however, on any type of transaction that counts as cash or a cash equivalent. No cashback is earned, for example, on cash advances, balance transfers, interest charges and other card fees, and purchases of traveller's cheques or foreign currency banknotes.

Cashback credit card features

Not every cashback credit card is the same. Features you'll need to compare include:

  • Minimum qualifying spend. Many cashback cards require you to spend a minimum amount per year in order to qualify for the cashback program. For example, if you spend less than $5,000 in a year you might not receive any cashback at all.
  • Flat rate cashback. Some cards will earn cashback at a flat percentage rate, e.g. 0.5% cashback on all spending once the minimum spend criteria has been met.
  • Tiered cashback percentage. Other cards have a cashback percentage which varies according to the amount you spend in each 12 month period, starting on the anniversary of your card account approval. E.g. 0.5% cashback if you spend up to $9, 999, 1% cashback on all your purchases if you spend $10,000 or more.
  • Cashback cap. Some cards have a cap on how much cashback you can earn each year (e.g. cashback earned only on the first $30,000 of spending) while others don't. Check a credit card's cashback cap, if any, before you fall for a high-rate cashback. For instance, you might be able to earn 1% cashback, but be limited to a maximum cashback of $300 per year.
  • Converting rewards points to cashback. While they are not principally cashback credit cards, many rewards points cards have a a redemption option which allows you to convert points into a cashback into your card account. You might want to consider this type of card as an option if you're not sure whether you want to receive cashback or some other type of reward for your spending.
  • Annual fee. You may have to pay an annual fee of $60-$80. possibly more. The highest fees usually confer benefits like a higher cashback percentage and/or unlimited cashback.
  • A sign-up bonus. Some cards may offer a temporary cashback to new customers who achieve a specified spending target within the first few months of holding the card.
  • Other features. Take note of whether the cashback credit card you have your eye on comes with any complimentary extras. Small features that you can actually make good use of can make all the difference in your decision.

Applying for a cashback credit card

The process of applying for a credit card with cashback is similar to that of applying to standard credit cards. You'll need to meet the following eligibility requirements:

  • Age, and citizenship or residency. Applicants must be at least 18 years old and New Zealand citizens or permanent residents in most cases. But some types of work and student visa will make their holders eligible to apply.
  • Proof of identity. For proof of identity you may be asked to provide a passport or local driver's licence.
  • Income. Minimum income requirements will start at around $15,000 p.a. for lower cashback rewards, rising to $50,000 or more for a card with a higher level of benefits. To prove your income you will need to supply recent payslips and/or details of your employer.
  • Credit score. Applicants will have a greater chance of approval if they can prove they're creditworthy. While some cashback providers will offer cards to those with no credit history or low scores, most will prioritise applicants with a credit score of 670 or more.

How the cashback is paid

Cashback is paid as a credit to your card account, usually every 12 months. This means, in fact, that cardholders are given an absolutely free choice about how to spend their cashback.

Alternatives to cashback credit cards

If you think that a cashback credit card is not the right choice for you, there are plenty of other options to consider:

  • Rewards points credit card. Earn points on all eligible spending and redeem them for gift cards, merchandise, travel, and – in some cases – cashback.
  • Airpoints credit card. Eligible spending earns Airpoints Dollars, which can be redeemed for free flights and upgrades, hotels and travel, rental cars and Koru Programme membership.
  • Balance transfer credit card. If you have existing credit card debt, your best choice might be a card with an introductory 0% or low interest rate on balances transferred from your current card. You'll save far more in interest charges than you could earn in cashback.
  • Basic credit card. Some people prefer a simple credit card that is convenient to use for shopping (including online) and bill payments, without the hassle of keeping track of points, Airpoints Dollars or cashback. It's even possible to have this kind of card with no annual fee.

Double dip at the Airpoints Mall

Want to be rewarded twice, with both cashback and Airpoints Dollars? Simply use your cashback credit card to shop online at the Airpoints Mall. You could earn up to four Airpoints Dollars per $100 of spending, sometimes more, and every dollar you spend will also contribute to your cashback earnings.

Learn about cashback credit cards

What is credit card cashback and how does it work?

  • Pros & cons

  • Tips

  • FAQs

Cash is king

There's nothing quite like that 'something for nothing' feeling of getting actual cash credited to your account just for doing your normal spending.

Higher annual fee

You're likely to pay a higher annual fee for a cashback card than you would for a card with no rewards programme.

Minimum spend

Some cashback credit cards pay no cashback if you spend less than $5,000 during the year.

More flexible than rewards points or Airpoints Dollars

When you receive cashback into your account, you have total freedom on how to spend that money, because it defrays the cost of the purchases you have already chosen to make. With rewards points and Airpoints Dollars you will be restricted to the redemption options offered by the particular rewards programme.

Other complimentary benefits

Depending on which cashback card you choose, you may receive additional benefits such as complimentary travel insurance or a concierge service.

Possible cashback cap

It's possible that your cashback may be capped. For example, a card may offer a 1% cashback on spending up to $30,000 p.a., meaning that $300 cashback per year is the most you can earn.

Avoid spending for the sake of earning cashback

Don't let the lure of cashback tempt you to spend more than you can afford to repay. Try to look at it as a 1% or 0.5% discount on things you were going to buy anyway, or bills you can't avoid paying, rather than as an incentive to spend for the sake of earning cashback.

Note any fees attached to your card

Your cashback credit card may come with a $60-$80 annual fee, plus a further small yearly charge for each supplementary cardholder on the account. Before you apply, make sure that the cashback on your likely annual spending with the card will at least cover the fees, and ideally will give you a net gain.

Pay your balance in full

Don't choose a cashback credit card if you don't expect to repay your account balance in full every month, because the interest charges you'll pay are likely to add up to more than the cashback you will earn.

Can I use my cashback to pay my credit card annual fee?

Yes. Since your annual fee is debited to your card account and forms part of the balance owed, and your cashback is credited to your card account and is in effect a kind of payment of the balance, you can use your cashback to pay your annual fee (or any other charge or purchase on your account).

Do cashback cards have a high interest rate?

A New Zealand cashback card can charge you up to a 20% p.a. on balances carried beyond the interest-free period.

How much cash will I get back?

It depends on which cashback credit card you choose (this determines the percentage applied to your spending in order to calculate the cashback amount) and how much you spend. The amount you spend may also have a bearing on the percentage applied, if there is a tiered cashback offered. For example, if you spent $12,000 on a card offering 1% cashback on annual spending between $10,000 and $30,000, you would earn $120. But if you spent only $8,000 in the year, you might only qualify for 0.5% cashback, in other words $40. And if you spent $4,999 or less, you might earn no cashback at all on a tiered card.

Is it worth having a cashback credit card?

Yes it is, provided that you spend enough to recover in cashback at least the cost of the annual fee, preferably more.

What's the difference between a cashback card and rewards card?

Unlike rewards cards, a cashback card will earn you a specific percentage back from your purchases every time you shop. With a cashback card, cardholders receive direct financial benefits, whereas rewards cardholders may be limited to specific types of redemption, such as merchandise from an online catalogue.

Which credit card gives the most cash back?

The credit card giving the most cashback to big spenders will be one with uncapped cashback, such as the ANZ CashBack Visa Platinum. But cards with a higher percentage cashback and no cap will have a higher annual fee. if you expect to spend less, you might be better off settling for a lower percentage, a cap, and a lower annual fee.