The best credit cards for cashback

Best credit cards for cashback concept with woman and payment methods and money aroundher — (Image credit: We Are / Getty Images)

Cashback credit cards give you rewards on your everyday purchases, paying you a percentage of what you spend. If you pay off your statement in full every month, these cards can help you earn hundreds of pounds worth of rewards each year.

The rewards you earn can build up over time, but make sure you pay off your balance in full, otherwise interest charges may outweigh the perks.

These cards usually come with a cap on the amount of cashback you can earn, and note that some have a monthly fee.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

We look at the top credit cards for cashback to help you make the most of your spending.

What are the best cashback credit cards?

American Express Cashback Everyday Credit Card

Fee: No monthly or annual fee

Features:

5% cashback (up to £125) on purchases in the first five months

0.5% cashback on up to £10,000 after the first three months

1% cashback on anything over £10,000

Cashback paid annually

This American Express credit card boasts the highest cashback rate compared to other UK credit cards, although for a limited time. It is available to new cardholders and has no annual fee. There is no cap on how much cashback you can earn, and you can add up to five complimentary supplementary cards to your account to earn cashback more quickly.

If you fail to pay in full, there’s a representative APR of 29.1%.

Amex Cashback Credit Card

Fee: Annual fee of £25

Features:

5% cashback (up to £125) on purchases in the first five months

0.75% cashback on up to £10,000 after the first three months

1.25% cashback on anything over £10,000

Cashback paid annually

This American Express credit card, while it has a high cashback rate, comes with an annual fee of £25.

There is no cap on how much cashback you can earn, and you can add up to five complimentary supplementary cards to your account to earn cashback more quickly.

You can also earn £30 cashback for referring a friend. If you fail to pay in full, there’s a representative APR of 34.6%.

Chase Credit Card

Fee: No monthly or annual fee

Earn 2% cashback on eligible spending from 1 July, up to £20 per month (currently 1%, up to £15 per month). This cashback offer is also available via the Chase current account debit card.

0% interest on purchases for up to 15 months

Fee-free spending abroad

There are a few hoops customers will need to jump through to be eligible for the higher cashback. We take a look at if Chase’s cashback deal is any good.

This card doesn’t have any monthly fee, but if you don’t pay back each month in full, the representative APR is 24.9%.

How do cashback credit cards work?

If you have a credit card that gives you cashback at a rate of 0.5%, for every £100 you spend, you get 50p back. As attractive as the promise of free money sounds, there are downsides, too.

Credit card companies may offer attractive cashback rates for only a fixed period of time, such as the first five months. In order to get the most out of using cashback credit cards you need to be mindful of two things: it may be beneficial to use them for all your spending (but watch out for credit card fees with any purchases) and you must pay off the full amount every month.

The introductory cashback offers could be useful if you know you're going to be buying something expensive. But if you carry a balance over just once, the resulting interest charge could wipe out any cashback you get.

Cashback credit card providers can charge a fee and typically offer uncompetitive interest rates. Some also require a minimum spend before you can generate cashback savings.

As with any credit card, be careful to pay it off in full to avoid being charged interest, and always check the terms and conditions to make sure the card is the right one for you.

Explore More

Oojal has a background in consumer journalism and is interested in helping people make the most of their money.

Oojal has an MA in international journalism from Cardiff University, and before joining MoneyWeek, she worked for Look After My Bills, a personal finance website, where she covered guides on household bills and money-saving deals.

Her bylines can be found on Newsquest, Voice.Cymru, DIVA and Sony Music, and she has explored subjects ranging from politics and LGBTQIA+ issues to food and entertainment.

Outside of work, Oojal enjoys travelling, going to the movies and learning Spanish with a little green owl.