Not a high spender? Here are two credit cards that earn you 5% rewards

The rewards system with a cashback credit card is simple–a percentage of the amount you spend with every swipe is paid back to you. (Comstock Images)
The rewards system with a cashback credit card is simple–a percentage of the amount you spend with every swipe is paid back to you. (Comstock Images)


Depending on your spends, ICICI Amazon Pay and SBI Cashback credit cards offer rewards in the range of 1-5%.

Rewards matter, for everyone. It would be heavenly if these were in the form of free flight tickets and luxury hotel stays. Credit cards help earn such rewards but that requires high spends—upwards of 10 lakh annually, a higher disposable income, multiple credit cards to optimize every spend, extreme planning to redeem rewards for the best deal and, finally, expensive annual fees charged by the cards. If all this doesn’t sound like your cup of tea, there is a simpler option for you: a cashback credit card.

The rewards system with a cashback credit card is simple–a percentage of the amount you spend with every swipe is paid back to you. This could range from 1-10%, depending on the card and type of spend. The money given as cashback gets deposited in your bank account or digital wallet directly without you having to worry about redeeming it with a partner merchant.

This rewards system would also suit people who are new to the credit card culture, said Ankush Setia, co-founder, Multiply, a credit card discovery platform. “The card owner doesn’t have to figure out partners to redeem the rewards and the best redemption rates across those partners. These are no-frills cards and the customer knows exactly what they will earn," he said.

“Cashback cards are best suited for those with spends on the lower side. Credit cards that help earn air miles yield value to only those with higher spends," said Sumanta Mandal, founder, credit card and personal finance adviser Technofino.

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Reward rates on cashback cards vary only to the extent of spend categories. For instance, most cards don’t offer cashback on rent and fuel, while shopping on popular online merchants, such as food delivery apps Zomato and Swiggy, e-commerce platforms like Amazon, Flipkart, Nykaa, etc., generally earn higher cashback of 2-5%. Co-branded cards can offer higher cashbacks of 7.5-10%, but these typically have a cap on maximum spend.

So, which is the best cashback card in the market? Credit card experts say there are two currently–ICICI Amazon Pay credit card and SBI Cashback credit card. Both offer a high reward rate of 2-5% on online shopping and cover most spend categories. ICICI Amazon Payback card even offers unlimited cashback.

What’s on offer

ICICI Amazon Pay card is a co-branded card and, hence, is most rewarding when you shop on the Amazon India platform. Prime members get 5% cashback on purchases made on the shopping site and on flight and hotel bookings made through Amazon. Non-prime users get 3% cashback on the same spends. The benefits are not limited to shopping alone. One can pay for the usual expenses like utilities, mobile recharge, insurance through Amazon Pay and earn 2% cashback. Paying an Amazon Pay partner merchant, such as Swiggy, Uber, or Bookmyshow, via Amazon Pay wallet also earns 2% cashback.

“The user should load the wallet with ICICI Amazon Pay credit card at the time of checkout on the merchant’s page to get the 2% cashback. If you load the wallet directly before initiating the transaction at the merchant’s page, it earns just 1% cashback," said Mandal.

All other spends outside of Amazon India (including other Amazon marketplaces like,, etc), online or offline, earn 1% reward.

Rewards earned via ICICI Amazon Pay credit card are credited as Amazon Pay balance.

The downside of a co-branded card, such as the ICICI Amazon credit card, is that it pays highest rewards on payments made to the co-branded partner with which the bank has tied up. “While the customer can earn 3-5% on Amazon, if they were to use the card to shop on Flipkart or any other major apparel e-commerce platform like Myntra, etc., they don’t stand to earn the same rewards. Besides, during sales, some electronics brands may tie up with specific e-commerce platforms and offer their products only on those platforms. For instance, Google Pixel had an exclusive tie-up with Flipkart in the past," said Kashif Ansari, assistant professor, Jindal School of banking and finance, OP Jindal Global University.

SBI Cashback credit card is a good alternative to this. It offers 5% cash back across all online shopping platforms. But, it excludes regular expenses, such as rent, wallet load, equated monthly installments, jewellery, education fees, utility bills, insurance payments, gift cards/vouchers and train tickets from cashback so it is difficult to optimize the SBI cashback card for spends other than online shopping and food and groceries delivery. ICICI Amazon Pay card allows utility bill payments through Amazon Pay.

It should be noted that the SBI card offers a maximum 5,000 cashback in a month. “Even the 5,000 limit is quite generous as one would need to spend 1 lakh to exhaust the limit," said Setia. Other high rewards cashback cards, such as Airtel Axis Bank credit card and Axis Ace credit card come with a monthly cap of 300-500 on key categories like food and groceries delivery platforms and utility bills. Offline spends (payment made on a POS terminal) earn 1% cashback on both the cards.

It would be a good strategy to own both the cards and optimize rewards offered by them by using these for different spend categories (see graphic). For instance, Amazon Pay card will earn 2% cashback on utilities, while SBI Cashback card pays nothing on them.

However, for someone who regularly commutes using Uber or Ola cabs, using the SBI card is better as it gives 5% cash back, whereas Amazon Pay will give only 2% cash back.

Is there a catch?

What’s the catch in both the cards offering high rewards of 3-5%? Setia says SBI cashback cards are hard to get. “SBI Card doesn’t easily approve applications of new users. They try to sell the more basic SimplyClick card and say they will upgrade it to Cashback after a few months, which almost never happens. Or, they may approve it but with a small credit limit of 10,000-15,000, which is worthless because people anyway don’t utilize more than 50% of the credit limit as it can impact the Cibil score," he said.

A possible reason for this could be that the rewards system is an expensive proposition for SBI Cards. This can also be seen in the series of devaluations the card has been through since its launch—the cap on cashback has been reduced from 10,000 to 5,000 and some regular spending categories have been removed. “The bank is paying 5% hard cash out of its pocket. This is not sustainable and there’s a high chance of further devaluation within the next seven to eight months," said Mandal.

The same can’t be said about ICICI Amazon Pay card because the reward is paid out as Amazon Pay balance that can only be utilized on Amazon platform. “The balance can’t be transferred back to the bank account. However, customers can use the balance to pay utilities’ bills," said Setia. In any case, the bank may not stand to lose much as it will earn from its exclusive tie-up with Amazon.

There’s a joining and annual fee of 1,180 each on SBI Cashback card, of which the latter is waived on annual spends over 2 lakh. ICICI Amazon Pay card is a lifetime free card. Since earning potential from cashback cards is low to moderate, it is advised that you get one with no or low fees. “Pick a cashback card with a fee (joining or annual) only when you know that you will easily recoup the fee or manage to get it waived," said Mandal. A card with high fees also doesn’t make sense because credit card rewards are prone to devaluation and you may be stuck with a low rewarding card if the devaluation happens soon after you have paid the annual fees.

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