How Credit Card Companies Give Cash Back?

Sometimes we feel how someone give us credit of 52Days and will pay for us. Again in addition to this credit they agree to give us refund of 5% or 10% also.

Friend’s its all Business.

Let me explain When you purchase goods of 10000/- and pay with Credit Card the trader will get his payment from bank but there will be deduction of 1.5%-2.5% of total amt. This is bank’s income of financing 10000/- for 1Month that’s the reason Banks give credit of 52Days.

Now the question comes of Cash Back, The Simple answer is Competition.

Due to many private banks, all of them want that they get maximum Market Share. So they go for sharing the profit with you with the theory that in future also you will use there card and they will get finance charges from traders.

Also some banks go for Balance transfer for first three months without any charges.

The reason is they want you to be there Customer and they can charge heavy interest after 3 months. Also they will get the finance charges on additional purchase made by you.


Conclusion: - Enjoy the benefits of this competition.

Prediction: - In coming future don’t get shocked if Banks provide you service of pick checks and other document from your home and provide Cash Delivery at your doorstep. Some of them like ICICI Bank and Citibank provide Cash Delivery at your doorstep.