And what is the difference between cashback for credit vs debit cards?
Edit: I believe I mean cashback rewards
In: 0
Cash back is basically exactly what it sounds like: the bank pays you for using the card. For credit cards, this will typically be applied against the balance you owe on the credit card; for debit cards, it will typically be a deposit made to your linked account.
The money they pay you will be a portion of the fees the bank charges the merchants you purchase from. These fees are why many businesses charge more if you use a credit card to pay. If the card has an annual fee, you pay interest, or any other fees, part of that money will go to fund the cash back incentives.
The same ideas apply to cards which give airline miles or use a more generic point system instead.
Latest Answers