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Asked by HZ HaMniz

Updated on 18 Apr 2019

What is the difference between rebate, cash rebate and cash back in credit cards?

Hi, I'm new to credit cards and I have plans to sign up for POSB Everyday Card. The benefit of the card is rebate, cash rebate and cash back etc. But I don't quite understand what are those thing. Also how does it work and how do i use this benefit?

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Aik Kai
Aik Kai,
Level 5. Genius
Answered on 10 Aug 2018

Cash rebate and cash back are terms loosely used by banks in their marketing promotion. While both essentially means the same thing, as in, 5% cash back/cash rebate means I spend $100 I get back $5, the backend mechanic is totally different.

How does cash back and cash rebate work?

Cash Back:

It means whatever cashback you receive, it will offset your next month bill. For example, I spend $100 in January, the bank gives me $5. This $5 will be used to offset my bill in February and so on and so forth. Example of such cards: Standard Chartered Unlimited Cashback Card, American Express True Cashback Card

Cash Rebate:

It means whatever cash rebate you receive, it is stored IN YOUR credit card account, until you decided to use it to offset further purchases. For example, I spend $100 and I receive $5 cash rebate. I carry doing this for 1 year and i will have $60 in my credit card account. For my next purchase, instead of charging to my credit card, I tell the merchant to use the $60 in my credit card instead. Example of such cards: POSB Everyday Card

It all depends on how you want to plan your expenses. Cashback is much more simpler, since the reduction is immediate, i.e., you see the reduction in your bill next month.

Cash rebates are slightly difficult but what I do is I stored all my cash rebates until I hit a decent amount. Then I spend it all on a big expenese. Case in point, I accumulate my cash rebates for 2 years and I use it to offset my hp purchase at Starhub when I re-contract.

Hope the abov explanation helps and let me know if you have any other questions.

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Charmaine Ng
Charmaine Ng,
Level 6. Master
Answered on 06 Aug 2018

cashback 1.5% = you get 1.5% refunded to you for your spending last month (assuming you hit all criterias).

rebate & cash rebates are just different terms of the same thing..

Regarding the credit cards I recommend Standard Chartered Bank Unlimited Cashback (since I read you're taking POSB Everyday card for similar reasons). You can read the reviews here. https://seedly.sg/reviews/credit-cards/scb-unlimited-cashback

and here:

https://seedly.sg/reviews/credit-cards/posb-everyday-cashback

Usually for cash back cards they might have some criterias (minimum spending, categories of expenditure - gas, F&B etc.) so it would be good to read up. I personally am using Standard Chartered Bank Unlimited Cashback.

Hope this helps!

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Gabriel Tham
Gabriel Tham,
Top Contributor

Top Contributor (May)

Level 8. Wizard
Updated on 15 Sep 2018

Very simply put, all rebates, cash rebates, cashback are different terms to represent an "offset" in your credit card bill.

So let's say your credit card bill is $100 and you earned $1 in rebates or cashback, you only need to pay $99 bill. However, the rebates offset is not immediate, they will usually be offset in the next month bill.

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