SBI has recently launched a new cashback credit card – SBI Cashback credit. At first glance, it appears to be the only card you ever need. However, the reality is slightly different. Nonetheless, SBI Cashback credit card is indeed a very solid card but not the only card you ever need. Read on to find out why.
SBI Cashback Credit Card
Fees and Eligibility
- No joining fee.
- Annual fee of 999+GST (~1180 per year) from 2nd year onwards. Waived off on spends of over 200,000.
Rewards and Benefits:
- Reward Points:
- 5% cashback on all online spending (Rent payment, wallet load, merchant EMI excluded). Max 10,000 cashback per month i.e. online spending of up to 200,000 per month eligible for 5% cashback
- 1% cashback on utility bill payments and all offline spending (fuel spends excluded)
- Cashback auto credited in next month’s statement. No redemption fee.
- Lounge access: 4 complimentary domestic lounge access (1/quarter).
Thoughts on SBI Cashback credit card
SBI Cards has created quite a buzz on social media with the launch of the SBI Cashback credit card. The highlight of this card is the no-nonsense reward structure and the 5% cashback on online spending with a liberal cap of 200,000 spends per month. What it means is that all online spends of up to 200,000 per month are eligible for 5% cashback. That’s a whopping max cashback of 10,000 every month. That is not all, the cashback reflects in your next card statement.
Within online spends utility bill payments, rent payments, wallet loads and merchant EMIs are excluded from 5% cashback. This, in my opinion, means that the 5% cashback feature will continue for a long time and won’t be pulled back in a jiffy. A-la Zomato Edition credit card, 10% birthday cashback offer.
Utility bill payments fetch just a 1% cashback. This is disappointing for sure. Maybe, SBI could have given a 2% cashback with a cap of 1000 per month to make SBI Cashback credit card a killer credit card. As of now, it’s not clear if insurance payments are counted as utility payments or online spending. For my calculations, I have assumed 1% cashback for insurance payments. Nevertheless, this needs to be confirmed by the early users of the SBI Cashback credit card.
So what’s included in online spending? Spends done on Amazon, Flipkart, Zomato, Swiggy, Ola, Uber, Train & Flight bookings etc will be counted as online spends. Since SBI has mentioned that there are no merchant restrictions, means that as long as the merchant MCC is not classified as utility/rent or wallet load you will earn a 5% cashback.
Is the SBI Cashback credit card the only card you ever need?
The answer is No! While the 5% cashback on all online spends seems very exciting. When we run the numbers and include other spends such as utility, fuel and offline spends; the reward rate comes at ~2.5%, which is very good but not mouth-watering. One reason is my assumption that insurance spends will give only 1% cashback.
Nonetheless, with the right strategy, you can easily earn 5% on nearly all spends every month.
What should be the strategy with SBI Cashback Card?
SBI Cashback credit card can easily replace many co-branded cards from your wallet. Namely ICICI Amazon credit card, Axis Flipkart, RBL Zomato Edition, and SBI Simplyclick. With this card, you really don’t need so many co-branded credit cards in your wallet.
As I mentioned earlier, while the 5% cash back on the SBI Cashback card is exciting; however, the overall reward rate on all spending is not mouth-watering. However, if you have 3 cards, SBI Cashback, Axis Ace and Amex MRCC, you can earn ~5% on all nearly all spends.
Use the SBI Cashback card for all online spends – straight 5% cashback. Axis Ace credit card for all utility bill payments thru the GPay app – 5% cashback. Amex MRCC at HP petrol pumps and insurance payments. As long as your Amex MRCC spends 20k+ a month on 4+ transactions you will earn 2000 points worth anywhere between 750-1200 bucks.
Can I replace my existing SBI card?
This seems to be possible in theory. As this is a specific question answered in the FAQs (refer Q10) of the website. However, many who got in touch with the customer care received a negative reply. Maybe we need to wait for a few days for systems to streamline and for the executives to be trained for this new card. Post that it should be possible.
SBI Cashback credit card is a simple and powerful credit card. For someone looking for a simple cashback card for online spends, this is a one-stop shop. Further, if you use the SBI Cashback credit card in combination with Axis Ace and Amex MRCC you can easily earn 5% cash back on all your spends. So the answer is very clear. 🙂
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