Making the Switch from Your Old Credit Card to a Cashback Credit Card: 10 Considerations

Once a difficult-to-obtain luxury, credit cards have become an essential tool for expanding the financial possibilities available to regular Filipinos. Rising median incomes have given banks and fintech companies the appetite to offer innovative cards to a wider spectrum of Filipino consumers, allowing many to experience luxuries like international travel for the first time.

In terms of features, even the most exclusive credit cards of yesteryear pale in comparison to the credit cards of today. This is evident in today’s cashback credit cards. Where traditional credit cards leaned primarily on points-based rewards as an application incentive, cashback cards provide direct monetary rebates, making them usable for more cardholders.

With the right cashback card, you can earn real cash savings on your daily transactions, stretching your peso further than would be possible with just paper money alone. If you’ve been using the same old credit card for years, now might be the perfect time to switch to a cashback credit card that offers more and aligns better with your spending habits.

Before completing your new credit card application online, you have to check if you are getting a good deal or simply making a “sidegrade.” Consider these factors if you’re planning to give up your old credit card for something that gives you cashback, like the Landers Cashback Everywhere Credit Card by Maya:

1) Not All Cashback Cards Are the Same

Cashback cards do not offer the same rates for all spending categories. For example, some cashback cards offer high rates for groceries while offering nothing for gas or online shopping. Others offer cashback for all purchases but at rates that are too low to make a difference. 

In any case, the cashback card that you pick should have good rates as well as a reasonably wide range of purchase categories that match your spending habits. Cards that offer high rates for daily purchases and lower cashback everywhere else are good picks for most people who just want to own one card.

2) Annual Fees Can Eat into Your Cashback

Some cashback credit cards come with annual fees that may be higher than your potential cashback over the course of the year. Compare the annual fees versus your spending habits to see if a card is worth it.

3) Cashback Cap Limits Matter

Most cashback cards will have monthly or annual limits on the amount you can earn. This can be a problem if your credit card is your primary means of spending. Review your monthly budget to ensure that the card you’re interested in has a high enough spending cap.

4) Perks Can Sweeten the Deal

Beyond simple cashback, certain cards come with perks like insurance or exclusive merchant discounts. In addition, some highly desirable cards also double as membership cards to exclusive leisure and shopping clubs. Others may also allow you to withdraw physical cash against your credit limit over an ATM, something that can be useful when traveling overseas. Take these fringe benefits into account when you’re narrowing down your card options.

5) Consider How Often You Pay Off Your Old Card

If you often carry a balance with your existing credit card, the accompanying interest rates matter a lot more than cashback. In all cases, the interest on unpaid balance will seriously degrade a cashback card’s earning potential. Don’t make the switch if you don’t have a habit of clearing your monthly balance.

6) Foreign Transaction Fees Can Vary from Card to Card

Are you a frequent foreign traveler? Check if your desired cashback card charges higher foreign transaction fees compared to your existing one. Some newer cards may even waive these fees, making them a better choice when you’re spending overseas.

7) Not All Cards Are Equally Useful Overseas

VISA and MasterCard are safe bets if you want a card that you can use internationally and at online marketplaces. While other brands like American Express, Discover, China UnionPay, and JCB are widely recognized as well, you may have to pay extra fees at more merchants and you may be restricted from making cash advances at some overseas ATMs.

8) Cashback Redemption Can Be a Mixed Bag

Some cashback cards automatically apply your rebates to your bill while others require a more involved redemption procedure. If the process requires you to wait several months or show up at the issuer’s branch during the weekday, you may want to consider delaying the switch or going with a more convenient card.

9) Customer Service Always Matters

A responsive customer support team will make all the difference, especially when you’re dealing with cashback or transaction disputes. Look up reviews of how well your prospective card issuer handles customer service to see if your desired cashback card is worth the potential frustration.

10) Credit Card Threats Are Continuously Evolving

If you’ve had your current credit card for several years, your next card probably has some updated security features. Still, you’d rather opt for a card that uses technologies like AI-powered fraud protection, real-time alerts, and cutting-edge online security. Weigh the protections offered by different issuers before you commit.

Is It Time to Make the Switch?

Most likely. The selection of cashback credit cards in the Philippines has rapidly expanded, which means there must be at least a few that will closely match your financial goals and lifestyle. If your old credit card no longer serves your needs, now is the perfect time to upgrade to a card that gives you real cash returns on your purchases. Just make sure that whatever you choose offers genuine value and isn’t just another tool for your day-to-day spending.