What is cashback on credit cards

Credit card: save on purchases with a cashback card

Shopping and getting discounts - who doesn't want that? With a cashback card, a small discount is granted on every purchase without having to ask for it. The article explains how it works and introduces the cards that are still worthwhile after deducting the ticket price.

The principle of the cashback cards is simple: For every purchase that you pay with the card, you receive a percentage reimbursement - typically around 0.50% to 1.00% of the purchase turnover, which is then EUR 0.50 to EUR 1 .00 for a purchase of EUR 100.00. The bonus is initially credited virtually. Some cards pay out continuously, others annually or only when a certain minimum amount is reached. You should know the exact conditions for cashback. Whenever possible, such a card should be used for everyday expenses instead of cash or other debit or credit cards. If acceptance is given and the merchant does not charge a surcharge for card payments, it makes sense to use it both in local shops and on the Internet. If the vacation or car repairs are also paid for with it, high sales can be achieved quickly.

The card companies earned particularly well from the transactions for decades. Due to an EU regulation, Visa and Mastercard are now only allowed to charge the merchant a maximum of 0.30% of the transaction value. American Express is much more free in its contract drafting as it is not covered by the regulation. With cashback cards, the banks / card companies give part of the income to the customers. With a good cashback card, the annual card price should not be too high, because it has to be earned first. Otherwise there would be a zero-sum game. Some of the cards are revolving credit cards with a credit line, with which you quickly get stuck on the loan problem and have to pay interest if the full monthly balance is not consistently paid manually. As with other credit cards, lending rates and cash fees are often high. It is therefore important to know that the cards should only be used for purchases.

  1. Amazon.de Visa Card
    annual ticket price without Prime membership: EUR 19.99, not applicable in the first year
    annual ticket price with Prime membership: -
    Cashback without Prime membership: 2.00% at Amazon.de and 0.50% in all other stores
    Cashback with Prime membership: 3.00% at Amazon.de and 0.50% in all other stores
    New customer campaign without Prime membership: currently EUR 40.00 cash bonus
    New customer campaign with Prime membership: currently EUR 40.00 cash bonus

  2. PAYBACK American Express card
    annual ticket price: -
    Cashback: 0.50% on all purchases (excluding petrol stations), 1.00% on all purchases (excluding petrol stations) converted with MAX Turbo
    New customer campaign: currently 1,000 welcome points

  3. Targobank Gold Card
    annual ticket price: EUR 59.00
    Cashback: 1.00% on all purchases
    New customer campaign: -

The current status of the Amazon Visa Card is always displayed in online banking, and you can also set the cashback to be initially offset against the card price

When shopping on Amazon.de, the cashback reduces the invoice amount, no minimum point balance is required for redemption

One of the most attractive offers is currently the Visa Card, which the mail order company Amazon.de is issuing together with the Landesbank Berlin. There are two variants: one for customers without Prime membership and one for customers who have subscribed to Prime. If you use it to pay at Amazon.de, the cashback is approximately 2.00% without Prime membership or approximately 3.00% with Prime membership. In all other shops it is uniformly approximately 0.50%. Cashback is granted in the form of points - one point for each full EUR 2.00 turnover when paying in other shops. The conversion is easy because each point is worth one euro cent. If points have been accumulated, even if there are only a few, they can be offset against the invoice total for Amazon purchases like account credit. In the summary of each order, if Amazon is the sender and the credit card is selected as the payment method, a corresponding box for crediting the points is displayed. If you click on "Redeem", the amount to be paid will be reduced accordingly in the order overview. Those who apply for the card for the first time receive a starting credit. We indicate the currently offered height for both variants in the map illustration. The starting credit is credited to the card account after the first purchase made with the card at Amazon.de. Without Prime membership, the card is free of charge in the first year and from the second year onwards, EUR 19.99 is charged annually (can also be paid for with points), with Prime membership, on the other hand, the card is generally free of charge. When the Prime membership is terminated or accepted, the card conditions change accordingly; this happens automatically and the physical card does not need to be exchanged.

The "PAYBACK American Express card" does not even have to generate the card price. It combines the PAYBACK trading card with a credit card, whereby American Express is less often accepted in Europe than Mastercard or Visa. The cashback is approximately 0.50% of sales. It comes from bonus points that can be redeemed online or at the PAYBACK terminals for various shopping vouchers - starting at 200 points. On the one hand, when you present the card, you collect in the normal way, like with a PAYBACK trading card for transactions with PAYBACK partners. If the purchase is paid for with a credit card, one bonus point is also credited for every two euros in sales regardless of the location (petrol stations excluded). A bonus point is worth the equivalent of one cent. The credit card also saves you from the often threatened expiry of points. The only condition for its unlimited validity is that points have been collected within the last three years. Applicants receive 1,000, 2,000, 3,000 or 4,000 welcome points as a one-off gift for promotions that are regularly announced, currently there are 1,000 extra points. On the one hand, the PAYBACK American Express card is ideal with relatively low sales, because it is free of charge and still offers cashback.
The whole thing is made more exciting by the little-known additional option MAX Turbo: The collection rate doubles with MAX Turbo - for every two euros you spend there are two bonus points, which corresponds to almost 1.00% cashback. MAX Turbo can be activated by telephone from American Express and costs EUR 35.00 per year. This option is only available to cardholders of a PAYBACK American Express, with the exception of cards issued by a favorite partner such as the dm PAYBACK American Express. The costs of MAX Turbo are offset by the additional points collected from an annual turnover of EUR 7,000. That is why the PAYBACK American Express together with MAX Turbo is definitely ideal even if the annual turnover is well above this threshold.

Targobank's "gold card", a Visa card, has a high annual card price of EUR 59.00, but 1.00% is credited to all purchases made in the previous month. There is no limit to the amount. In order to generate the ticket price alone, an annual turnover of EUR 5,900 is necessary. The Targobank card is superior to a premium-free card with the usual cashback of 0.50% for annual sales of EUR 10,800 or more.

  1. American Express Card
    annual ticket price: EUR 55.00 for annual debit, not applicable for previous year's sales of EUR 9,000 or more
    Cashback: converted 0.50% on all purchase sales, with Turbo converted 0.75% on all purchase sales
    New customer campaign: -

  2. American Express Gold Card
    annual ticket price: EUR 140.00 for annual debit, not applicable in the first three months and goodwill for previous year's sales of EUR 10,000 or more
    Cashback: converted 0.50% on all purchase sales, with Turbo converted 0.75% on all purchase sales
    New customer campaign: currently 4,000 Membership Rewards points upon opening under certain conditions

  3. Miles & More Blue Credit Card
    annual ticket price: EUR 54.96
    Cashback: the equivalent of around 0.50% (economy flight) or 0.165% (voucher) on all purchases
    New customer campaign: currently 500 welcome miles

  4. Miles & More Gold Credit Card
    annual ticket price: EUR 109.92
    Cashback: the equivalent of around 0.50% (economy flight) or 0.165% (voucher) on all purchases
    New customer campaign: currently 15,000 welcome miles

A cashback over Membership Rewards and Miles is only a little more complex to calculate. Taking one of the regular American Express credit cards instead of the non-contributory PAYBACK American Express can make sense because of the insurance included. With a regular American Express you don't collect PAYBACK points, but the more flexible Membership Rewards points in the in-house loyalty program. The collection rate is one Membership Rewards point for every full euro spent. With the cashback and insurance requirements, the "American Express Card" and the "American Express Gold Card" are particularly suitable. The "American Express Blue Card" is not suitable because participation in Membership Rewards costs EUR 30.00 per year, while it is included with the other regular cards. With the regular cards, you can register by telephone for the so-called Turbo for EUR 15.00 per year, then the collection rate per full euro turnover is 1.5 Membership Rewards points. If you set the value of a Membership Rewards point at 0.5 cents, the turbo is worthwhile from EUR 6,000 annual sales. You can collect a maximum of 20,000 extra points with it; to achieve this, you would have to spend EUR 40,000. Membership Rewards points can be transferred in miles in the ratio of 2 to 1 to PAYBACK or in the ratio of 5 to 4 in frequent flyer programs (13 of them are available, Miles & More is not included, but the conversion takes place indirectly via PAYBACK) . With the turbo, 0.75 PAYBACK points are calculated for every full euro spent, 0.75% cashback is achieved at PAYBACK, or 0.75 miles converted from there into miles with Miles & More. The Turbo is therefore cheaper but less powerful than the corresponding "MAX Turbo" option from PAYBACK American Express. If you don't use the turbo, you collect 0.5 PAYBACK points for every full euro you spend, which is 0.50% cashback, or 0.5 miles with Miles & More. According to the contractual conditions, the American Express Card is free of charge with a previous year's turnover of EUR 9,000 or more. In the case of the American Express Gold Card, it was previously the case that the card price was waived on goodwill from a previous year's turnover of EUR 10,000 or more; telephone support can arrange this if you ask for it in a friendly manner.

Anyone who collects miles will consider automating this with the "Miles & More Blue Credit Card" or the "Miles & More Gold Credit Card". Both are master cards. The collection rate for both cards in the version for private customers is one award mile for every two full euros spent on purchases. The miles generated in this way can be used for flights, for vouchers for various companies or for rewards. Depending on the preferred redemption, the value of a mile is different, when redeeming it for an economy flight it is around 1.00 cents, with Business Class or First Class it is significantly higher, with a voucher it is only 0.33 cents . Depending on this, the cashback for the purchase turnover can realistically be calculated at around 0.50% (economy flight) or approximately 0.165% (voucher). The card price is charged on a monthly basis: The Blue Card costs EUR 4.58 per month, which is EUR 54.96 per year. The Gold Card contains insurance benefits and costs EUR 9.16 per month or EUR 109.92 per year. The cards are therefore by no means always worthwhile for collecting miles in the long term, but they can be an excellent investment, as the expiry of the miles can be suspended and there are a particularly large number of welcome miles for concluding the card contract in some periods. Unredeemed miles usually expire after 36 months. This can be prevented with the Blue Card, provided that at least 1,500 miles have been earned through credit card sales in the previous year. With the Gold Card, miles expire regardless of the amount spent on the card - as long as you are the cardholder. New customers who did not have a Miles & More credit card in the past twelve months usually receive 500 (Blue Card) or 4,000 (Gold Card) welcome miles. If particularly good promotions are being offered, 4,000 to 6,000 welcome miles (Blue Card) or 15,000 to 20,000 welcome miles (Gold Card) can be received. This exceeds the respective ticket price. We indicate the currently available number of welcome miles on the map above. If you are primarily interested in the welcome miles and do not want to keep the credit card permanently, you should only cancel it after the twelve months have elapsed, as Miles & More reserves the right to deduct the welcome miles from the points account if the card product is in the first twelve months Months of the contract period is canceled or changed.

  1. PAYBACK Visa Flex + from the Baden-W├╝rttembergische Bank
    annual ticket price: -
    Cashback: approximately 0.20% on all purchase sales
    New customer campaign: currently 1,000 welcome points

Less for everyday use, but especially for the on Trips abroad and at Online purchases in foreign currency the "PAYBACK Visa Flex +" is suitable. Because with this card there is no international fee and no cash fee for withdrawals at ATMs anywhere in the world. Merely any fees incurred by the machine operator will not be reimbursed. The only credit card in Germany for which the machine operator's fees are reimbursed is the Santander Consumer Bank's "1plus Visa Card" described in the last section. PAYBACK Visa Flex + is free of charge. PAYBACK points are collected, one point for every five euros spent on purchases. This is less than with the other cards, especially since part of the turnover is scored by rounding off. For example, a purchase over EUR 9.95 only earns one point. The collection rate is thus slightly below 0.20% of sales. Adding PAYBACK Visa Flex + to the card portfolio can still make sense, especially for use on trips abroad and for online purchases in foreign currencies, because unlike with American Express and Miles & More cards, collecting there is completely free of charge. For example, if you turn over EUR 1,000 in foreign currency, you only collect 200 points, with PAYBACK American Express it would be 500 points, but free of charge, while with American Express cards you would incur a 2.00% international fee and thus EUR 20.00 and with those from Miles & More even 2.20% and thus EUR 22.00. In addition, Visa credit cards are better accepted than American Express. The PAYBACK Visa Flex + is issued by the Baden-W├╝rttembergische Bank. When applying for the card, there are currently 1,000 one-time welcome points that are credited around four to six weeks after the card is issued. When withdrawing money, there is a relatively low withdrawal limit of EUR 250.00 per day. The card is a revolving credit card, full settlement by direct debit is not possible, the outstanding balance of the monthly statement has to be transferred manually within a payment term so that no debit interest arises.

  1. 1plus Visa card from the Santander Consumer Bank
    annual ticket price: -
    Tank discount: 1.00% on a maximum of EUR 200.00 tank sales per month
    New customer campaign: -

Because of high gasoline prices are Fuel discounts very popular. A liter of petrol can be refueled a few cents cheaper. The "1plus Visa-Card" of the Santander Consumer Bank is offered permanently free of charge, the fuel discount with it is 1.00% up to a maximum of EUR 200.00 fuel sales per month. The negotiating amount is therefore a maximum of EUR 24.00 per year. Buying the 1plus Visa card is worthwhile because the percentage of cashback is unmatched and the savings on refueling do not have to be compared with an annual fee for the card. For other purposes, the 1plus Visa card is no longer as advantageous as it used to be. If the full amount of the monthly statement is transferred manually, there is no debit interest; the Santander Consumer Bank only collects part of the amount.