Why are there not a lot of credit cards that offer cashback that can get credited to bank accounts?

[Joltpost]

Cards like SBI cashback, Millenia, Swiggy and others don't provide cashback credited to bank account.

Instead it gets credited to card statement which is fine for people who prefer it.

But for people like me I prefer getting cashback credited to bank account simply because it's money that I can get to use it for other things. This is why I like Amazon pay credit card and pixel credit card because they do this exact thing where I can use it for other payments and not directly credited to statement.

I don't know why a lot of indian banks don't give you this option of whether redeem it to statement or credit it to bank account.

Its not like crediting the cashback to the card statement is going to help pay your bill.

 

[rakeshsajjan45]

Cards like SBI cashback, Millenia, Swiggy and others don't provide cashback credited to bank account.

Instead it gets credited to card statement which is fine for people who prefer it.

But for people like me I prefer getting cashback credited to bank account simply because it's money that I can get to use it for other things. This is why I like Amazon pay credit card and pixel credit card because they do this exact thing where I can use it for other payments and not directly credited to statement.

I don't know why a lot of indian banks don't give you this option of whether redeem it to statement or credit it to bank account.

Its not like crediting the cashback to the card statement is going to help pay your bill.

Because of Below Factors

• Credit Card Business Model:
  • Credit card companies primarily profit from transaction fees paid by merchants and interest charged on outstanding balances.
    
    
  • Cashback rewards are a marketing tool to incentivize card usage.
    
    
  • Crediting cashback to the card statement keeps the customer engaged within the credit card ecosystem.
• Operational Efficiency:
  • Integrating direct bank account transfers for cashback adds complexity to the redemption process.
  • Statement credits are simpler to implement and manage within existing credit card systems.
• Customer Retention:
  • By applying cashback as statement credits, card issuers encourage continued card usage to offset future balances.
  • This strategy reinforces customer loyalty and promotes ongoing spending.
• Regulatory and Security Concerns:
  • Direct bank transfers involve additional regulatory compliance and security protocols.
    
    
  • Card issuers may prefer the controlled environment of statement credits to mitigate risks.
• Marketing and Psychological Factors:
  • Statement credits provide a visible reduction in the cardholder's balance, creating a sense of immediate savings.
  • This psychological effect can be more impactful than a less visible bank deposit.

 

[Dobbiee]

Cards like SBI cashback, Millenia, Swiggy and others don't provide cashback credited to bank account.

Instead it gets credited to card statement which is fine for people who prefer it.

But for people like me I prefer getting cashback credited to bank account simply because it's money that I can get to use it for other things. This is why I like Amazon pay credit card and pixel credit card because they do this exact thing where I can use it for other payments and not directly credited to statement.

I don't know why a lot of indian banks don't give you this option of whether redeem it to statement or credit it to bank account.

Its not like crediting the cashback to the card statement is going to help pay your bill.

You are right. Cashback cards are simple and least time consuming. Use it and forget about how to get additional benefits of rewards.
I have also used Apay card for whole my life (since it was launched). Only 1 year ago I got into the reward type cards.

But its a big cost to banks to give direct cashback of like 5% on transaction. Value of money credited back is a straight cost, compared to the deals they are able to crack with other brands on using reward points. Thats why you see converting reward points to cash is like in the ratio of 1:0.3 on reward points type cards.

Keep enjoying cashback card till your spends are 10 lacs annually and focus your energy on self development.
The middle range cards like Regalia, Coral, Rubyx, Sapphiro are useless.
Incase your spends are high and you want to get into rewards game, then straight jump to Infinia, DCB, Magnus, Atlas types.

 

[Trust Me]

Cards like SBI cashback, Millenia, Swiggy and others don't provide cashback credited to bank account.

Instead it gets credited to card statement which is fine for people who prefer it.

But for people like me I prefer getting cashback credited to bank account simply because it's money that I can get to use it for other things. This is why I like Amazon pay credit card and pixel credit card because they do this exact thing where I can use it for other payments and not directly credited to statement.
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Its not like crediting the cashback to the card statement is going to help pay your bill.

I think your reasoning is in reverse! 🙂

It is the Amazon Pay cashback that is not credited to bank, and one is restricted to the Amazon ecosystem if one wishes to recoup it (granted that that also includes bill payments and such).

Statement credit on the other hand actually frees up the cashback amount that need not be paid for the current bill payment, and so, that amount can be used anywhere for anything, because it's real money that remains in the bank account for use.

Moreover, that cashback money can gain further cashback (however small) when the card is charged again in the next cycle. Amazon Pay cashback gains nothing further.

Of course, the statement credit is delayed by a statement cycle compared to the Amazon Pay cashback.
.

 

[Joltpost]

• Credit card companies primarily profit from transaction fees paid by merchants and interest charged on outstanding balances.
  
  
• Cashback rewards are a marketing tool to incentivize card usage.
  
  
• Crediting cashback to the card statement keeps the customer engaged within the credit card ecosystem.

Ok but that doesn't really help the customer paying the bill still even if it leads to engagement. I mean if that's the case why cap the cashback and not keep it unlimited?

Even better why only have 1% cashback offline and 5% cashback online(for SBI Cashback) if a lot of us shop offline? And these are the same business that banks make money transaction fees from merchants anyways. Kinda cheap to devalue offline transactions considering that it's to be credited in card statement.

If you're expecting cashback on statement to reduce your 20k bill tremendously and hence the reasonn why you got such a card, then you surely are mistaken.

• • Integrating direct bank account transfers for cashback adds complexity to the redemption process.
  • Statement credits are simpler to implement and manage within existing credit card systems.

Again cool for those who prefer statement credit over amount transfer but it's really not that complicated.

Especially since in the case of Kiwi and Pixel you need a certain threshold amount for them to be credited to wallet or bank account anyways.

Not to mention that you can even charge annual fees like Kiwi. You not only make back the money but you also get engaged to using the card since you get money transferred to your bank account.

But its a big cost to banks to give direct cashback of like 5% on transaction. Value of money credited back is a straight cost, compared to the deals they are able to crack with other brands on using reward points. Thats why you see converting reward points to cash is like in the ratio of 1:0.3 on reward points type cards.

Keep enjoying cashback card till your spends are 10 lacs annually and focus your energy on self development.

I mean my self development is fine so I'm not sure where you got this idea....

And again if banks can charge you a fee to credit cashback on card statement then they can do the same for charging a fee to get the cashback as money that you can use to pay for something else.

I think your reasoning is in reverse! 🙂

I made an error on Amazon Pay credit card

Though my point still stands that you as a customer should have options and the option where customers can receive cashback directly to bank account should increase frequently especially from big banks like SBI and HDFC.