Debit and credit cards with cashback - how to choose

In a post about where to keep money, I mentioned cashbacks. In fact, I would like to touch on the topic of cashback cards in a little more detail, because this is also relevant for travel. For example, when choosing a card for abroad, you must take into account not only all kinds of commissions (example of commissions), but also cashback. Due to it, it is possible to block both commissions and the unfavorable internal rate of the Russian bank. You can also have not one, but several cards for different categories, because the increased cashback (for example, 5%) is not given for everything, but is given for something specific, for example, for fuel.

True, recently dollar and euro cards have become relevant, and they, as a rule, do not shine with cashback. I know that from December 20, 2014, Tinkoff currency cards will have 1% cashback. This makes me happy.

The content of the article


What is cashback

The essence of cashback is that a certain percentage is charged for operations on the card, most often it is 1%. Obviously, in order for this to be profitable, you need to use the map everywhere. In large Russian / European cities, this will not be a problem, given that it is not very convenient to carry cash in your wallet, you need to constantly think about not running out of cash and then look for an ATM in the store to withdraw money. In Thailand, unfortunately, you can only pay in supermarkets (Tesco, BigSi, etc.), if renting a car from network distributors, yes in rare stores in shopping malls.

Cashback example

You say 1% is not enough? In fact, 1% cashback is comparable to a deposit of 10% per annum, or a piggy bank card with 10% on the balance, although it seems that the percentage is as much as 10 times the difference 🙂 Thus, the cashback is from 2% (and sometimes it is 3% or 5 -10% in selected categories) is more profitable than a deposit.

Here's a specific example for you, I spend 30,000 rubles per month on a card where the cashback is 3%, which gives me 1,000 rubles per month (or 12,000 rubles per year). If I used a piggy bank card with 10% instead, but without a cashback, I would receive from the same 30,000 rubles only 250 rubles per month (or 3000 rubles per year). And I did not take this into account here, that in the second case the amount decreases on the card, and with it the profit decreases.

How to choose a cashback card

Conditional formula

The correct cards have both interest on the balance and cashback. To estimate the total profitability of the card, he derived a conditional formula, where credit card (CC), debit card (DC), cashback (KB), percentage on the balance (P).

KK = DK + KB1% = DK + P10%
CC + KB1% = DC + KB2% = DC + KB1% + P10%
KK + KB2% = DK + KB3% = DK + KB2% + P10%
CC + KB3% = DC + KB4% = DC + KB3% + P10%

The formula is not precise, it only serves to estimate the profitability of the conditions. It is easier to do this if you are in Russia all the time. But if you travel a lot, then you need to understand that when paying (or withdrawing from an ATM), various commissions play a role. That is, it is necessary to look at everything in aggregate (a selection of maps for abroad). When I was choosing, I made a plate for myself, where I entered it right away, and the percentage of commissions, and cashbacks of different cards.

Some cards with cashback

Cashback is available for both debit cards and credit cards. There are also cards sharpened for cashback for certain categories. For example, debit Tinkoff Black gives 1% cashback for all transactions and 5% for categories that change quarterly (for example, fuel, pharmacies, transport). Tinkoff Platinum credit card gives 1% for all transactions and 30% for special offers. Siab gives 1-5% depending on the categories and the selected tariff. Promsvyazbank All Inclusive card gives 5% for the initially selected category, for example, products.

There are other options, for example, cashback is credited not with money, but with points, miles, or on a mobile phone. My travel credit card Tinkoff AllAirlines gives 2% for all operations, 5% for a ticket and 10% for a hotel / car, but for miles. Petrokommerts Mobile Bonus cards and UralSib Phone Card give 3% to a mobile phone. Corn credits 1-1.5% with points that can be spent only in certain places, for example, at a TNK gas station or in a Perekrestok supermarket.

In general, you do not need to make a dozen cards for each specific category, you are tortured to remember which one to use for what. But you have to find your own option. Someone, for example, travels abroad for 3 weeks by car and makes a card specifically for this trip to pay for fuel with a cashback of 5%. Here you also need to look at the cost of the annual service, because if the card costs money, and you don't really use it, then there may be no profit..

Cashback is not always credited

There is such a thing as MCC code. Each operation on the card is marked with it, depending on the terminal settings at the point of sale. And you can get in if you were counting on cashback, you paid with a special card, which is beneficial only in this case, and the terminal assigned the wrong operation code. I have had this a couple of times, you look later in the Internet bank, and the operation in the required category was not counted. In this regard, I like Tinkoff's policy, they can write in support and they consider each case individually.

There are also transactions for which cashback is not initially provided, such as replenishing electronic wallets or paying for utilities. Well, and of course, cashback is not credited for cash withdrawals..

P.S. Due to my cashback card, I get an average cashback of 1000-2000 rubles per month. Pretty good considering I don't do anything for this..