In today’s world of rising expenses, using a cashback credit card wisely can help you save money on everyday purchases. If you know how to use cashback credit cards to reduce monthly expenses, you can cut costs on groceries, fuel, dining, travel, and utility bills while earning rewards on every transaction.
This guide will explain how cashback credit cards work, how to maximize savings, and the best cashback cards in India for 2025.
What is a Cashback Credit Card?
A cashback credit card gives you a percentage of your spending back as cash rewards. Unlike regular reward points, which must be redeemed for vouchers or gifts, cashback is directly credited to your card statement, reducing your outstanding balance.
Key Benefits of Cashback Credit Cards
✔ Instant Savings: Get a percentage of your spending back every month.
✔ Automatic Discounts: No need to track reward points—cashback is directly credited.
✔ Category-Specific Benefits: Earn more cashback on fuel, groceries, and online shopping.
✔ Reduces Monthly Expenses: Cashback helps lower your total credit card bill.
How to Use Cashback Credit Cards to Reduce Monthly Expenses
1. Choose the Right Cashback Credit Card
To maximize your savings, pick a card that offers the highest cashback on your biggest spending categories.
- For online shopping: Flipkart Axis Bank Credit Card, Amazon Pay ICICI Credit Card.
- For groceries & essentials: HDFC Millennia Credit Card, SBI Cashback Credit Card.
- For fuel & travel: BPCL SBI Card, IndianOil Citi Credit Card.
- For dining & entertainment: RBL Bank Popcorn Credit Card, ICICI Coral Credit Card.
2. Use Your Cashback Card for Daily Expenses
- Pay for groceries, fuel, mobile recharges, and bill payments using your cashback card.
- Some cards offer extra cashback on online transactions, so always prefer UPI-linked credit card payments.
3. Pay Bills & Subscriptions via Credit Card
- Pay for electricity, water, broadband, and OTT subscriptions using your cashback card.
- Many banks offer 1-5% cashback on bill payments through their portals.
4. Utilize Monthly & Quarterly Cashback Offers
- Credit cards offer seasonal cashback deals on brands like Amazon, Flipkart, Swiggy, and Zomato.
- Track your credit card’s cashback calendar and shop during offer periods for maximum benefits.
5. Set Up Auto-Pay for Essentials
- Use your cashback card to automate rent, insurance premiums, and EMI payments.
- Some banks offer cashback on standing instructions, reducing your monthly financial burden.
6. Always Pay the Full Bill to Avoid Interest
- To truly save money, always pay your total credit card bill on time.
- If you only pay the minimum amount, the remaining balance accrues interest, which can cancel out the cashback earned.
Best Cashback Credit Cards in India for 2025
1. SBI Cashback Credit Card – Best for Online Shopping
- Cashback: 5% on online shopping, 1% on offline spending.
- Annual Fee: ₹999 (waived on ₹2 lakh annual spend).
- Best For: Amazon, Flipkart, Myntra, Swiggy, and Zomato users.
2. HDFC Millennia Credit Card – Best for Overall Spending
- Cashback: 5% on Amazon, Flipkart, Swiggy, and Uber; 1% on other spends.
- Annual Fee: ₹1,000 (waived on ₹1 lakh annual spend).
- Best For: Digital shoppers and frequent travelers.
3. Amazon Pay ICICI Credit Card – Best for Amazon Shoppers
- Cashback: 5% on Amazon (Prime members), 3% for non-Prime users, 1% elsewhere.
- Annual Fee: Zero.
- Best For: Frequent Amazon shoppers.
4. Flipkart Axis Bank Credit Card – Best for Flipkart & Partner Brands
- Cashback: 5% on Flipkart & Myntra, 4% on Swiggy, Uber, and PVR, 1.5% on all other spending.
- Annual Fee: ₹500 (waived on ₹2 lakh annual spend).
- Best For: Flipkart buyers and lifestyle shopping.
5. BPCL SBI Card – Best for Fuel Savings
- Cashback: 4.25% on fuel, 1% on other transactions.
- Annual Fee: ₹499.
- Best For: Car & bike owners spending on fuel.
How Cashback Credit Cards Help Reduce Monthly Expenses
| Expense Category | Recommended Cashback Credit Card | Potential Savings Per Year |
|---|---|---|
| Online Shopping | SBI Cashback, Flipkart Axis, Amazon Pay ICICI | ₹5,000 – ₹10,000 |
| Groceries & Essentials | HDFC Millennia, Axis Ace | ₹2,000 – ₹5,000 |
| Fuel & Travel | BPCL SBI, IndianOil Citi | ₹3,000 – ₹7,000 |
| Dining & Food Delivery | Swiggy HDFC, Zomato Edition | ₹2,000 – ₹4,000 |
| Utility Bills & Subscriptions | Axis Ace, Paytm HDFC | ₹1,500 – ₹3,000 |
By using the right cashback credit card, you can save up to ₹15,000 – ₹25,000 per year on regular expenses.
Common Mistakes to Avoid While Using Cashback Credit Cards
🚫 Ignoring the Terms & Conditions – Some cards have cashback caps, minimum spends, or category restrictions.
🚫 Not Paying Bills on Time – Late payments attract high-interest charges and penalties, reducing your savings.
🚫 Overspending Just for Cashback – Cashback is a saving tool, not a reason to spend beyond your means.
🚫 Choosing the Wrong Card – A high annual fee can negate your cashback benefits if you don’t spend enough in that category.
Conclusion
Knowing how to use cashback credit cards to reduce monthly expenses can help you save money effortlessly. By choosing the right card, using it for essential expenses, and paying bills on time, you can lower your total spending while enjoying cashback rewards.
For online shopping, SBI Cashback & Flipkart Axis are great choices. For fuel savings, BPCL SBI is the best. If you want maximum overall savings, HDFC Millennia and Amazon Pay ICICI are excellent options.
Start using cashback credit cards wisely in 2025 and turn everyday expenses into smart savings!