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GuestFellow
11-21-2011, 10:43 PM
Salaam,

I feel stupid asking this question. What does it mean to use a credit card which gives cashback? :skeleton: Not that I have a credit card, but someone asked me this question and I had no idea lol. :hmm:
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Dagless
11-21-2011, 10:58 PM
Originally Posted by Tragic Typos
Salaam,

I feel stupid asking this question. What does it mean to use a credit card which gives cashback? :skeleton: Not that I have a credit card, but someone asked me this question and I had no idea lol. :hmm:
When you purchase something you will get a small amount of money back. Like say you buy something for £100, the credit card may give you 2% back so you only pay £98. Some cards give you reward points instead which you can spend in their stores, others may give air miles etc.
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syed1
11-21-2011, 11:42 PM
also cash back could imply that you can use your credit card to withdraw cash....

bear in mind that doing so would yield very high interest compounded daily..
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Ramadhan
11-22-2011, 03:59 AM
Originally Posted by Dagless
When you purchase something you will get a small amount of money back. Like say you buy something for £100, the credit card may give you 2% back so you only pay £98. Some cards give you reward points instead which you can spend in their stores, others may give air miles etc.
No. you still have to pay the bank $100, but you will get $2 credit in your credit card. You can use that $2 for your next purchase.

Originally Posted by syed1
also cash back could imply that you can use your credit card to withdraw cash....
Cash back does not mean that. AFAIK, all major credit cards allow you to withdraw cash.
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Dagless
11-22-2011, 07:27 AM
Originally Posted by Ramadhan

No. you still have to pay the bank $100, but you will get $2 credit in your credit card. You can use that $2 for your next purchase.
Why would you pay them 100? You spend 100 on your credit card, therefore your balance is -100. The credit card company gives you 2% cashback, therefore your balance is -98. You pay 98 and your balance is 0. You never pay 100 because it's not your money which is used to purchase anything (hence credit card and not debit card) - you only pay the balance.
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ardianto
11-22-2011, 08:11 AM
Originally Posted by Dagless
Why would you pay them 100? You spend 100 on your credit card, therefore your balance is -100. The credit card company gives you 2% cashback, therefore your balance is -98. You pay 98 and your balance is 0. You never pay 100 because it's not your money which is used to purchase anything (hence credit card and not debit card) - you only pay the balance.
I and bro Ramadhan go to the bookstore. We see "10% discount for every item" sign there.

I buy a $10 book, but I pay only $9 because I get 10% duscount. Bro Ramadhan buy $20 book, but he pay only $18 because he get 10% discount too.


I and bro Ramadhan have credit card from same bank that offer cash back up to 2%. This month I use my credit card and spend $1000, bro Ramadhan spend $100. I pay to the bank $1000, then bank gives me $20 in my credit card balance. So, if in next month I spend $400, I can pay only $380. Bro Ramadhan pay $100 to the bank, he doesn't get $2 in his balance. According to the rule, if the card holder spend $500 or more, he/she get 1% cash back, if the card holder spend $1000 or more, he/she get 2% cash back. And bro Ramadhan spent only $100.


These are just example, but I hope you understand what's difference between discount and cash back. Difference between unconditional and on condition.
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Dagless
11-22-2011, 09:18 AM
Originally Posted by ardianto
I and bro Ramadhan go to the bookstore. We see "10% discount for every item" sign there.

I buy a $10 book, but I pay only $9 because I get 10% duscount. Bro Ramadhan buy $20 book, but he pay only $18 because he get 10% discount too.


I and bro Ramadhan have credit card from same bank that offer cash back up to 2%. This month I use my credit card and spend $1000, bro Ramadhan spend $100. I pay to the bank $1000, then bank gives me $20 in my credit card balance. So, if in next month I spend $400, I can pay only $380. Bro Ramadhan pay $100 to the bank, he doesn't get $2 in his balance. According to the rule, if the card holder spend $500 or more, he/she get 1% cash back, if the card holder spend $1000 or more, he/she get 2% cash back. And bro Ramadhan spent only $100.


These are just example, but I hope you understand what's difference between discount and cash back. Difference between unconditional and on condition.
I think maybe it depends on provider because here most cards give cashback on balance, not on payment (since a lot of people are in debt there wouldn't really be an incentive if it was payment based). So if you spend 100, you would get 2 back whether you paid anything to the credit card company that month or not. Maybe someone else can explain better...
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Ramadhan
11-22-2011, 09:52 AM
Originally Posted by Dagless
Why would you pay them 100? You spend 100 on your credit card, therefore your balance is -100. The credit card company gives you 2% cashback, therefore your balance is -98. You pay 98 and your balance is 0. You never pay 100 because it's not your money which is used to purchase anything (hence credit card and not debit card) - you only pay the balance.
I used to have credit card that offered cash back. And that's the terms/conditions.
I do not get discount on my credit card payment to the bank. but i get the "cash back" which is credit on my card that I can only use for purchase with that credit card. It is basically non-existent until I use it as part of my next purchase. in other word, I will get discount on my next purchase. This way the bank encourage the cardholder to keep spending and using the credit card in order to get more credit in order to use it for the next purchase. It's very good strategy by the banks.
Maybe different bank has different policy, but that's the usual practice in my area. But I will be very surprised if banks actually give direct discount on payments to them.
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ardianto
11-22-2011, 10:11 AM
Originally Posted by Ramadhan
Maybe different bank has different policy, but that's the usual practice in my area. But I will be very surprised if banks actually give direct discount on payments to them.
Not on payment to the bank, but on payment to the specific vendors. In example, if you eat in "ABC restaurant", you can get 10% discount if you pay with "XYZ credit card".
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Marina-Aisha
11-22-2011, 04:14 PM
usually it means to get money drawn from ur card
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GuestFellow
11-22-2011, 06:29 PM
Okay now I'm confused. LOL :/
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Ghazalah
11-22-2011, 06:33 PM
^It literally means, do you want any cash back lol :giggling:
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Abz2000
11-23-2011, 04:59 AM
It means they expect to increase your debt so they can get at least triple that amount from you once they have you hooked
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Abz2000
11-23-2011, 05:03 AM
Hope this helps:

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