Cashback returns a portion of what you spend on the card, either as money or a credit on your bill, and it's only worth it when what you get back in a year exceeds the card's annual fee and you don't change your spending to earn the benefit.
How cashback works
With each purchase, the card issuer sets aside a percentage of the amount and returns it to you after a set period. If the card pays 1% and you spend R$ 2,000 in a month, you get R$ 20 back. In a year, with the same spending pattern, that's R$ 240.
The money doesn't come back right away. In most programs, the amount stays pending until your bill is paid or until a deadline set by the issuer, which can be several weeks. Canceled or refunded purchases have the cashback removed.
The percentage can be fixed across the board or vary by category. Some cards pay more on groceries or gas and less on everything else, and others offer a higher amount only in the first few months of use.
Where the money goes
Each program has its own way of returning the amount. The most common ones are:
- Bill discount: the amount appears as a credit and reduces the total due on your next bill.
- Account balance: the money goes to the digital or checking account linked to your card and can be used like any balance.
- Automatic investment: some issuers apply the cashback to a fixed-income product or a reserve within the app.
- Partner store credits: the amount can only be spent at a specific store or app, which limits how you use it.
The format matters. Money in your account can be used for anything. Credit restricted to one store is only worth it if you'd already be shopping there.
The fine print of the program
Before choosing a card for its cashback, it's worth reading the terms. That's where the rules that reduce the actual benefit appear.
Some programs require a minimum accumulated amount to unlock the cashback. Others have expiration dates, and balances not used within that timeframe are lost. It's also common to have a monthly cap: above a certain spending amount, the card stops paying back.
There are also purchases that don't count. Withdrawals, bill payments with the card, cryptocurrency purchases, reloads, and the card's own fees typically don't generate cashback. Installment purchases sometimes earn the benefit on each installment, not on the total amount at the time of purchase.
Cashback and annual fee: the math that decides
Cashback needs to be compared to what the card charges. On a card with a R$ 400 annual fee and 1% cashback, you need to spend R$ 40,000 a year, about R$ 3,333 a month, just to break even.
Below that, the card costs more than a card with no annual fee and no cashback. Above that, what's left is real gain, as long as you pay the full bill.
Some issuers waive the annual fee for those who spend above a certain amount per month or maintain investments with the institution. In that case, the math changes, but the question stays the same: does your normal spending already reach that goal, or would you have to spend more to get there?
How to calculate if it's worth it: step by step
- Add up what you spend on the card per month. Use the average of your last three or four bills, without counting unusual purchases.
- Subtract what doesn't generate cashback. Bill payments, withdrawals, and other exclusions listed in the terms.
- Apply the program's percentage. If your eligible average is R$ 2,500 and cashback is 1%, the return is R$ 25 per month.
- Multiply by 12. In this example, R$ 300 per year.
- Subtract the annual fee and other charges. With a R$ 240 annual fee, you're left with R$ 60. With a R$ 400 annual fee, the card costs you R$ 100.
- Compare with the alternative. A card with no annual fee, even without cashback, might leave more money in your pocket.
Cashback or miles?
Miles or points work differently. Each real spent turns into a certain amount of points, which can be redeemed for flights, products, or transferred to airline program accounts. The value of each point varies based on how you use it.
If you travel frequently and keep up with transfer promotions, you can get more value from miles. For those who don't want to track rules, expiration dates, and redemption tables, cashback is more predictable: the percentage is set and the money comes in real reais.
One way to compare is to take a real redemption you'd make, like a flight that would cost R$ 800, see how many points it requires, and calculate how much each point is worth. Then compare it with the cashback percentage in reais.
When cashback backfires
The risk with cashback is that it looks like a discount and becomes a reason to spend more. A 1% return on a R$ 500 purchase is R$ 5. If that purchase wasn't planned, you spent R$ 495 more than you would have.
The other problem shows up when you don't pay your full bill. Credit card revolving interest is among the most expensive forms of credit in the country, and one month's interest on an unpaid balance usually exceeds everything the cashback would give you back in a year. Law 14.690/2023 capped revolving and installment bill interest and charges at 100% of the original debt amount, but that ceiling still allows the debt to double.
Signs that the program has stopped helping are easy to spot:
- You started concentrating your purchases on the card just to meet the waiver goal.
- Your average bill went up after you switched cards.
- You've paid only the minimum or split your bill since then.
- Part of your cashback balance expired without being used.
Who benefits from cashback
Cashback works best for those who already use their credit card for monthly expenses, such as groceries, pharmacy, fuel and bills that accept cards without extra fees, and pay the full bill by the due date.
For this profile, a no-annual-fee card with cashback, even if the percentage is lower, is usually the safest choice. Cards with high annual fees and higher cashback only make sense when the step-by-step calculation shows a surplus at year-end, based on your current spending.
It's worth reviewing your account from time to time. Issuers change regulations, percentages and exemption rules, and a card that made sense a year ago may no longer be worthwhile.