With approximately 60 Cashback credit cards in the UAE, these type of cards are becoming more prevalent and popular among residents. While some banks offer Cashback as part of a Rewards Points program (i.e. you can redeem points for cash back), many now purely offer a Cashback benefit.
With a Cashback credit card, you can basically redeem a discount on your purchases. Most cards will give you around 1% cash back on general spending. However, there are numerous variations offered by UAE banks on this type of rewards program. For example, the Cashback Classic Card from Abu Dhabi Islamic Bank (ADIB) will give you 1% back anywhere, while the Titanium Credit Card from RAKBANK will give you 1% back on domestic spends, and 3% back on international spends. On the other hand, the Standard Chartered Titanium Card will only give you 10% cash back on groceries, utilities and school fees. Does this mean the Standard Chartered offer is the best Cashback credit card? Not necessarily, as with most things to do with banking in the UAE, reading the fineprint is crucial.
What to Watch Out For
When it comes to Cashback rewards, you need to pay attention to a few common disclosures:
Minimum Spend is the minimum amount you have to spend on your credit card during the billing month to be eligible for Cashback rewards. This is usually the total spending on your credit card. For example, some cards will not allow you to accrue any cash back unless you spend at least AED 2,500 on your credit card for the month. If there are special bonus rates on specific categories, such as utilities or groceries for example, there may be a minimum monthly spend required for that category as well.
Maximum Cashback is the maximum benefit you can accrue in a month. Virtually every credit card in the UAE has a limit. There could be a maximum amount for all you spending; for example, the SmartSaver Card from Mashreq has an overall limit of AED 2,500 back per month. Other cards may also have limits on specific categories. For example, the Emirates Islamic Cashback Card offers a bonus rate of 10% cashback on telecoms spending, but only up to the first AED 1,000 spent. Above this amount, only the regular rate of 1% cashback applies.
Other Restrictions may include being unable to claim Cashback on a transaction where another offer was used (for example a special discount promotion). In addition, you may only be eligible for these rewards if you spend at specific merchants or stores.
Determining what is the best option is not as simple as going for the highest advertised Cashback rate, since there are many other factors to consider. In addition, according to bayzat.com, the average annual fee for a Cashback credit card in the UAE is around 25% higher if you compare it to other credit cards.