Festivals give you one more excuse to splurge. It's the time to eat out, take a vacation and become footloose. What's more, you can sleep easy if you pay through cards and have the option of getting up to 50 per cent of your money back.

Such offers, however, are nothing new. Banks often come out with cash back and discount incentives to attract prospective customers and induce existing ones to use their cards more. But this time they are extending the offer to their debit cardholders as well.

Many of them are also offering up to 50 per cent money back on booking of train and air tickets and hotels through their credit cards.

Holders of the HDFC Bank Gold Card can get back 5 per cent of the money they spend to book tickets through the Indian Railways website, www.irctc.co.in.

ICICI Bank has a 30 per cent cash-back offer for both credit and debit cardholders on their specially designed holiday packages for Malaysia.

A Visa Signature cardholder will get back 50 per cent of an airfare and 25 per cent on a hotel booking under domestic holiday packages of Travelguru.com.

Makemytrip.com has tied up with HSBC to offer 3 per cent cash back on domestic airline tickets, 5 per cent on international flights and 10 per cent on hotels and holiday packages. These are for credit card holders of the bank.

Ezeego1.com gives 50 per cent money back to platinum, 25 per cent to gold and 15 per cent to silver credit cardholders of ICICI Bank.

In August, the State Bank of India (SBI) had launched a benefit policy called Cash Back Plus Offer.

Under the scheme, an ATM- cum-debit-card holder of the SBI or any of its seven associate banks could get up to a 5 per cent refund until October 30.

The offers, however, come with strings attached.

In many cases, refund offers on air tickets are limited to specific airlines and consider only the base fare.

The maximum amount that one can get back per month is also limited. In some schemes, it is capped at Rs 10,000, in some others, Rs 20,000.

The amount of refunded money varies from one bank to another. It also depends on how much is spent on a card. HSBC and the SBI have set the limit at Rs 1,000 per card.

Further, the customers can expect to get their cash back only after they spend a certain amount.

While for a HSBC debit card it is Rs 2,000 per transaction, the SBI and Corporation Bank debit cardholders can expect a refund after they spend Rs 500.

Certain banks, such as Citibank, offer the money-refund incentive only if the card is swiped on their electronic data capture terminal, commonly called a swiping machine. ICICI Bank has this rider for many of its cash-back offers.

Moreover, most banks don’t offer reward points on credit card purchases where cash-back options have been used.

The cash is neither refunded upfront, nor can you expect a bank employee delivering it at your doorstep. In most cases, it is credited in the next statement or to the debit cardholder’s bank account.

Also make sure that you pay your credit card bill within the zero-interest period. Otherwise, the benefit will be eaten up by the interest on revolving credits outstanding on the card.

It is always wiser to use a debit card on which you don’t have to pay any interest because the amount of the bill is directly debited from your savings account.

But in that case, paying through a card is equivalent to paying in cash.

If it is the latter, one can always bargain for a cash discount. A merchant doesn’t give cash discounts if one pays through cards.

So, if a cash discount is greater than the cash-back offer, it makes no sense to use the plastic.

Therefore, it is important to know whether you will be able to bargain for a cash discount with the merchant before signing up for a cash-back offer.

Also make sure that the goods or services that you want to avail yourself of through the card are covered under the programme.

Until August 7 this year, banks and financial institutions have issued 24.95 million credit cards and 84.95 million debit cards.

However, 88.2 million transactions were done through credit cards against 32 million debit card transactions in the same period.

In value terms, the total value of transactions between April 1 and August 7 this year through credit cards stood at Rs 21,796.47 crore compared with Rs 4,497.51 crore in debit cards.