Cashback

Cashback is a reward mechanism built into some credit and debit cards. When a cardholder makes an eligible purchase, the issuing bank credits back a percentage of the transaction value - either directly to the card statement, to a linked account, or as a balance offset. The percentage applied, the eligible spend categories, and the crediting frequency are all set by the issuing bank and disclosed in the card's schedule of charges or key facts document.

Not all spending qualifies. Banks typically exclude categories such as government fee payments, utility bill payments, cash advances, and balance transfers from cashback calculations. Some cards apply a tiered rate - a higher percentage on certain categories such as groceries or fuel, and a lower rate on general retail. There is usually a monthly or annual cap on the total cashback a cardholder can earn, which is stated in the product terms.

The cashback rate quoted in marketing is a gross figure. Cardholders should check whether an annual fee, minimum spend threshold, or minimum monthly balance applies before the benefit activates. Where an annual fee exists, the net benefit is the cashback earned minus that fee - a calculation worth doing before applying.

For expats in the GCC, cashback cards are issued by locally licensed banks regulated by the relevant central bank in each country - the Central Bank of the UAE (CBUAE), the Saudi Central Bank (SAMA), the Qatar Central Bank (QCB), the Central Bank of Bahrain (CBB), the Central Bank of Kuwait (CBK), or the Central Bank of Oman (CBO). The card terms, including the cashback schedule, must be disclosed to customers under each regulator's consumer protection frameworks, so the key facts document is the authoritative source for rates and caps.

One consideration specific to expats is that cashback earned on cross-border spending - for example, purchases made in a home country during a visit - may attract a foreign transaction fee charged by the issuing bank. That fee can offset or exceed the cashback earned on the same transaction. Always check the foreign transaction fee in the schedule of charges alongside the cashback rate before using a GCC-issued card abroad.