Debit card cashback - what's the catch?

majormantra

My highly trustworthy financial institution of choice (just kidding, it's RBS) is advertising a free 1% cashback deal with selected retailers, when I use my debit card.

I've read (ok, scanned) the fine print and I can't see a catch - am I missing something? I'm not usually one to refuse free money, but when it comes to banks I generally assume they're out to screw me in some way.

mrfpb

Possibly trying to get more current account customers.

Does it include cashback on the cash you ask for at the checkout?

sungod

only catch is that ultimately we all pay for it, as with credit cards

retailers increase prices overall to reflect their costs for transaction fees charged by banks and card companies - some may simply refuse to accept high-cost cards, amex for instance, as they have particularly high fees

barring a revolution, it'll remain a zero sum game, so it makes sense to max out all cashback and rewards points schemes, things like virgin's 'shops away', hilton's similar one, and the umpteen points cards like nectar, boots, tesco cards etc., the punters who pay cash or ignore these schemes are paying the same as you, for no benefit

fwiw i use my amex for everything possible, it's a stonking rewards points scheme, subsidized by all the non-amex payees, fallback is virgin, use store points cards as well to double up

sure they're raping your purchase data to spam you, but at least you make something on the deal

KonkyWonky

Take everything you can from the banks

I make practically all my purchases on AMEX and receive 1.25% cashback on all purchases. I have a Capital One Mastercard that I use as my fallback card if the retailler does not accept AMEX, it pays 0.5% cashback. For holidays I have a Halifax Clarity Card which has no cashback but does provide the official Mastercard exchange rate when used abroad and has no fees for purchases or cash withdrawals.

I also use TopCashBack or Quidco for online purchases.

47p2

The bank will be hoping you go overdrawn on your account, then they will stuff you tighter than a MAMIL in lycra with their extortionate interest rates that will make you want to curl up and die

kajjal

The bank just wants more profit from more retail debit card transaction fees. The risk with debit cards is if you pay and the company goes under before you receive what you paid for you lose your money unlike on a credit card.

KonkyWonky

47p2 wrote:

The bank will be hoping you go overdrawn on your account, then they will stuff you tighter than a MAMIL in lycra with their extortionate interest rates that will make you want to curl up and die

I've not come across a card that doesn't let you set up a direct debit to pay the balance in full at the end of the month, so long as you keep control of your spending there should be no charges.

As Kajjal says as well you have the added benefit of protection via section 75 should you need it.

fatsmoker

If you look at the places where you'll get cashback you'll probably find that it's for shops that you don't frequent. They're trying to get you to spend more on sh1te you don't need (not cycling related stuff, which you must need).

Secteur

I have a credit card linked to my air-miles account.

I use the card for ALL purchases - petrol, food, bills when I can and everything else, and then pay it off in full at the end of each month.

The spending is stuff I'd spend anyway.

So far I have saved £1200 in plane fares in 2 years, and I dont consider myself a huge spender - it's just all the little stuff really adds up.

As has been said above, they hope that some / most people will get behind in their payments and rack up fees which is where they make most of their money. But if you're careful, I cant see the downside.

KonkyWonky

fatsmoker wrote:

If you look at the places where you'll get cashback you'll probably find that it's for shops that you don't frequent. They're trying to get you to spend more on sh1te you don't need (not cycling related stuff, which you must need).

A huge number of sites offer cashback now. If you are buying a product from a website that is already selling at the lowest price you can find, with cashback on top of that, then I can't see a negative.

majormantra

All good points, thanks.