Benefits And Drawbacks Of Cashback Credit Cards: What You Need To Know | Paisa Live

Credit card usage in India is growing, with cashback credit cards gaining popularity for their rewards on everyday purchases. These cards offer a percentage of your spending back as cash, effectively reducing your bill. For example, a 5% cashback on a ₹1000 purchase returns ₹50. Higher cashback rates may apply to specific categories like groceries or fuel. However, carrying a balance on these cards can lead to high interest charges that may outweigh the cashback benefits. Additionally, some cards come with annual fees, which may be waived if a spending threshold is met. To fully benefit from cashback cards, it's crucial to pay off your balance each month and manage spending within your budget to avoid late fees and protect your credit score.