The best cashback offers

Even the best cashback credit cards only offer rates of around 1%-2% on your purchases. So the heavily advertised new debit card reward schemes from Lloyds and Halifax which promise "up to 15% cashback" must obviously come with some small print. What are the limitations and could the offers still make it worth switching your current account?

Lloyds and Halifax are part of the same banking group and while the two schemes go under different names (Everyday Offers and Cashback Extras respectively), they are essentially the same. Unlike a conventional cashback scheme, they involve specific time-limited offers for each retailer, which you have to activate online through your current account before shopping. At present there are only small number of retailers participating around 15 although this may increase.

Overall the scheme is too limited to be a selling point on its own, unless you are an exceptionally heavy user of one or more of the retailers included. But the associated current accounts are among the best on the market. With Lloyds you can earn up to 3% interest in balances up to£5,000, while Halifax pays a flat £5 "Reward" each month. So this could be a small bonus if you're already a customer or considering switching. However, if you're purely trying to maximise cashback, there are far better options available.

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For cashback linked to a current account, consider the Santander 123 account. This pays 1% on water, council tax and Santander mortgage payments, 2% on gas and electricity and 3% on phone and internet. It also pays up to 3% interest on balances up to £20,000.There's a monthly fee of £2, but used correctly the account can still be highly profitable. Santander's 123 credit card is also attractive, offering 3% on petrol and rail fares (up to £300 spending per month), 2% on department stores and 1% on supermarkets. There's a £24 annual fee.

For more general spending, American Express and Capital One are usually the most competitive issuers and have a range of cards, offering flat or tiered cashback rates and with or without annual fees. Currently, you can get up to 1.25% through Amex and up to 2% through Capital One, with both also offering 5% cashback (up to a limit) for the first three months. The best choice depends on how much you're likely to spend, but Amex probably wins for most users at present.