What is cashback and how does it work?
Banks constantly entice customers with various types of bonuses, thanks to which we can save or even get some extra money for free. One of the most common rewards, apart from the money we get just for opening an account, is of course cash back . It is an interesting service related to the use of payment cards, although often confused with cashback . What exactly are both services and how much can we gain from them?
Cashback – what is it?
Moneyback is a banking service thanks to which we receive a refund of part of the expenses incurred during the transaction using a payment card. This applies to all cashless payments made in both stationary and online stores. This type of service was first introduced in Poland in 2009 by BZ WBK (currently Santander).
Cashback
Cashback basically has two meanings, but one of them is also a partial refund for online purchases. However, unlike a refund – we can get it regardless of the payment method and the type of account you have. All you have to do is register on one of the sites that offer it and we can start saving. Moreover, nothing prevents you from combining both sources and collecting returns from both sources (both cashback and cashback).
How to use the refund service
Unfortunately, not every bank has a refund service, so if you want to use it, you must first choose the appropriate bank account or credit card. For this purpose, it is worth using the ratings and comparison engines that can be found on the Internet. Of course, it is also a good idea to review the circumstances under which we will be able to use promotion, as they are not always clear.
What to look for when choosing an account or credit card with money back
Before deciding on the choice of a particular organization in which to open an account or credit card, it is worth taking a closer look at the terms of the contract, and above all:
- Shipment – If a bank account is free, there is no problem with it. Otherwise, it is worth analyzing whether the refund will turn out to be profitable, if we take into account all the costs associated with maintaining the account,
- Promotion conditions – the principle of operation of the cashback service is relatively simple, although some banks do not settle all transactions, but only those that take place in selected stores. Therefore, it is worth paying attention to them in advance,
- Maximum refund – while the percentage of the return value is quite clear, often banks limit it only to a certain amount, for example a maximum of several tens of zlotys per month, and this, unfortunately, can be a significant limitation.
How much can we earn?
Refund is an interesting service thanks to which we can get some money back, but it certainly won’t be a lot of money. Most often we can count on a refund from 1 to 5% , but it is better than nothing – especially if it is a free bank account and the use of the service does not involve any additional fees. Of course, we must also keep in mind the amount of the maximum return, which significantly limits its potential.
Allure Bank has its offer how to personal account , where the refund is 1%, and the maximum amount of the refund in one month is 20 PLN.
In terms of potential savings, the above cashback is much better. Thanks to it, we can often count on reordering up to tens of percent and without the need to have an account with the selected bank. Moreover, on websites of this type we will not meet any monthly limits, so people who shop regularly can count on really big returns.
Refunds and taxes
The refund is treated as a so-called bonus sale which is exempt from tax if the value of the one-time bonus does not exceed 760 zlotys . If the bonus is greater, the bank is obligated to settle accounts with the tax office on behalf of the client. Therefore, even after exceeding this amount, we do not have to show any returns in our tax settlements.
What you should pay attention to when using the refund service
Although using a refund service is actually associated with the same benefits, in some cases it can lead to additional costs. Aside from the potential fees for maintaining the account, this return may encourage you to spend more than planned and make less rational purchases.
Of course, the refund feature often also applies to credit cards, which are unfortunately a credit product. Although used correctly, we will not expose ourselves to significant additional costs, but any ill-thought-out purchases may unnecessarily burden our household budget. When paying with a credit card, we must take into account the interest that is likely to exceed the refund we will receive. Therefore, it is only worth using it when we really need it, and not because of the possibility of a refund.
Banks encourage new customers to open an account with them in various ways – not just through a refund service. The most popular promotions are certainly those where we receive money to open a bank account and fulfill certain conditions. It is often even a few hundred zlotys, so a good amount is worth paying attention to. Moreover, some people have made such frequent account rotation a fairly regular source of income, so it is worth knowing which banks currently offer such bonuses.
Summary and opinions
No doubt, refund is a useful and worthwhile service, because we get extra money for the payments we usually make anyway. Even if the amounts are small, it is better to get “something” for free than to get nothing. On the other hand, such a service can make our purchases less thoughtful when we want to get a greater return. However, if you control your expenses correctly, there are practically no downsides, so it is useful to use them if you have the opportunity. Such a free bank account with a refund should be standard in every bank, but unfortunately it still is.
What do you think of the service? maybe used? Share your opinion in the comment.
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