What do cashback cards give you?
For example, if your card gave you 3% cashback, you would get back ?90 if you spent ?3,000 on the card.
They give you back a percentage of what you spend on the card. This amount is usually deducted from your bill once a year.
A cash back credit card can be the simplest way to earn rewards. Cardholders can make a purchase knowing exactly how much they will earn back without having to decipher the value of points. Cash back credit cards are one of the most popular types of rewards cards available because they’re fairly easy to use and understand.
- The top card pays 5% cashback for the first three months, others give up to
- 1% on fuel and supermarket spending, while there are also some good fee-free, near-cash reward cards.
We analyse the pros and cons of all.
As is the case with most top-tier credit cards, the highest rated cash back offers are intended for people with excellent credit scores. Unless you have a credit file that is at least 2 years long, and a FICO score above 680, we recommend you look elsewhere. Students and individuals with bad credit really only have a handful of options for cash back cards.
Which cashback card should I choose?
Every cashback card is different in what they offer, and will suit different people, depending on their spending habits. Here are some variables you should look out for:
- Introductory cashback rates – Many cashback credit card issuers offer an introductory rate, generally for a minimum spend and for a specific amount of time. These can be great if you are planning a large purchase or several purchases immediately, but if you are unlikely to reach the spend limit in the given time, you should only check out the standard rate of cashback.
- Standard cashback rates – This is the amount of cashback earned after any introductory period has ended.
- Higher APR – Many cashback cards tend to have a higher APR, which should be taken into account, as it is the rate you are liable for if you are unable to pay off your balance in full in any given month.
- Annual fee – Any annual fee should be taken into account when calculating how much cashback you will earn.
- Cashback limits – Some cards impose a maximum amount of cashback that can be earned in any given year. If, according to your calculations, you are likely to exceed this amount, it may be worth working out whether a card with unlimited cashback is more suitable.
- Minimum spend – Some cashback cards stipulate a minimum spend on the card before a specific rate of cashback is earned.
- Retail specific cashback – Some issuers stipulate where you can earn different rates of cashback, for example in specific stores or on specific products. For example, 1% at a named supermarket, but only 0.5% everywhere else, or 1% at all supermarket stores and 0.5% at their petrol stations. It is important to consider where you normally use your credit card and on what, and choose your cashback card accordingly.
Should you get Visa, MasterCard or American Express?
It is best to choose the card that will pay you the most cashback rather than only looking for Visa, MasterCard or Amex.
All three process the transactions when you use your credit card, but they do not usually provide the cards (however American Express do offer their own cards too).
Clear your debts
Cashback cards are therefore best suited to people who pay off their bill in full each month. Such people do not borrow on the card and therefore do not pay any interest, so the interest rate on the card is irrelevant and the cashback is essentially free money.
What are the best cashback credit cards?
Here are the best cashback credit card deals around right now.
Cashback credit cards with no annual fee
|Credit card||Cashback rate||Fee||Representative APR|
|American Express Platinum Cashback Everyday Credit Card||5% cashback for first three months capped at ?100.
0.5% cashback on spends up to ?5,000 or 1% if you spend over ?5,000 in a year.
|Aqua Reward Credit Card||0.5%||No fee||34.9%|
Credit cards comparison
We include all of the personal credit cards you can get in the UK, apart from those offered exclusively through other companies