Best cashback credit cards

What is a cashback credit card?

Cashback credit cards simply let your earn cash when you spend on your credit card.

These are the simplest credit cards benefits scheme to understand. There is no need to figure out what points translate to in NZ dollars to understand the value you’re getting.

Cashback credit cards are also more flexible than other rewards cards as there are no restrictions on where you can use your earnings.

Most, but not all, cashback credit cards available in NZ come with an annual fee  – that must factor into your decision to get the best deal.

How do cashback credit cards work?

With a cashback credit card you will earn cash on any eligible purchase. Cash advances and cash substitutes, like gambling chips, are not eligible. How much cash you will earn depends on the credit card.

All NZ cashback credit cards use 1 of 2 ways to give you cashback:

• As a percentage of your spend: A small percentage of the amount you spend on your card will be credited back to your account. This percentage ranges from 0.5% to 1%.
• $1 each time a particular amount is spent: Depending on the credit card this amount currently varies from $70 to $150.

3 top tips for getting best cashback credit card

We explain what to look at when considering a cashback credit card.

1. Factor in the annual fee

The annual fee is one of the most important features to pay attention to when looking at any kind of credit card. Cashback cards are no different.

Your aim should be to maximise the total amount of cash earned or saved, and an annual fee can take a hefty chunk. You may even lose money if you don’t spend enough during the year to outweigh the annual fee.

For example, here is how total earnings could look for 2 different credit cards used to spend $15,000 over the course of a year.

Card 1 has a much better cashback earn rate than card 2, but the annual fee on the same card makes it a worse deal in this example.

See our guide for all available credit cards with no annual fee.

2. Pay the card off in full each month

If you’re the type to only pay the minimum payment on your credit card each month, you should probably avoid a cashback credit card.

Paying off the full balance every month is the only way you can avoid paying interest on a credit card. It’s highly unlikely the cashback benefits of a credit card will be more than the interest you would be charged by paying less than the total amount owed.

As cashback credit cards have fairly average purchase interest rates (around 18%, according to the RBNZ), you would be financially better off with a low rate card that has no annual fee.

Low rate credit cards have much lower interest rates ranging from around 9% to 13%.

3. Don’t forget other credit card benefits

Cashback may be the main feature you’re looking for in a credit card, but it’s important to weigh up other card features when making a decision.

For example, with BNZ’s cashback cards you can choose to switch to earning Flybuys at any point, if you prefer.

Be sure to check out what else a cashback credit card offers and you benefit from features you weren’t expecting.

Other credit card schemes that can be redeemed for cash

Some credit card companies have benefits schemes that can be converted into account credit. While not technically a cashback credit card, the outcome is the same.

We take a look at those here.

Westpac hotpoints

The Westpac hotpoints scheme lets you earn points that can be spent on purchases through the hotpoints online store, charitable contributions, and more.

But hotpoints can also be redeemed through the bank’s hotpoints Pay programme. hotpoints Pay lets you spend hotpoints as cash whenever you use your Westpac credit card. You can also use hotpoints to get credit back for purchases you’ve already made.

When redeemed through the hotpoints Pay programme, 900 hotpoints have a value of $5.

There are currently three hotpoints credit cards available from Westpac, each with different features and annual fees. Find out more about the hotpoints programme in our guide to rewards credit cards.

BNZ Rewards

Introduced in late 2022, BNZ Rewards is the bank’s rewards scheme that lets cardholders earn BNZ Points on their spend. 

These BNZ Points can be redeemed for a variety of rewards including travel and gift cards, but they can also be redeemed for cash back to your card.

150 BNZ Points equates to approximately $1 cashback and you must redeem at least 200 BNZ Points in any one go.

Learn more about the BNZ Rewards in our guide to rewards credit cards. 

American Express Membership Rewards

Membership Rewards is a scheme from American Express that lets you redeem points earned for gift cards, travel, and more.

Points can also be used to pay for any item on your AMEX card through its Pay with Points programme.

This programme lets you either use points in a couple of ways:

1. Points for charges: Have the cost of items you’ve already purchased credited back to your account. 200 Membership Rewards points equals $1.
2. Points for credit: Convert points to credit that can then be spent anytime. The value of converting points this way varies with $1 equaling from 192 to 220 points, depending on how much you’re converting.

A little more complicated than a standard cashback credit card, but this AMEX scheme is a comparable option if other cashback credit cards don’t appeal to you (and you’re comfortable with the large annual fee eligible cards come with).

Learn more and compare all rewards credit cards in our guide.