The best credit cards for cashback
If you’re looking for a credit card that gives you cash back on your spending, here are the best deals around at the moment.
A cashback credit card pays you back a percentage of what you spend on your card.
The number of cashback credit cards on offer has fallen in recent years after rules were introduced in 2015 that restricted the amount card issuers could charge merchants. This led to a number of companies trimming their offerings.
The good news is that there are still credit companies offering cashback, so you can still earn some extra money back on your purchases.
How do cashback credit cards work?
If you have a credit card that gives you cashback at say 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. A lot of credit card companies offer attractive cashback rates for only a fixed period of time, such as the first three months.
And in order to get the most out of using cashback credit cards you need to be mindful of two things: you must 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.
Make no mistake, the introductory cashback offers could be useful if you know you're going to be buying something expensive – getting a 5% discount isn't to be sneered at. But if you carry a balance over just once, the resulting interest charge could wipe out any cashback savings you make.
It is also worth noting that cashback credit card providers often charge a fee and typically offer uncompetitive interest rates. Some also require a minimum spend before you can generate cashback savings.
What are the best cashback credit cards?
American Express Platinum Cashback Everyday Credit Card
This credit card gives you a 5% cashback on purchases (up to a total of £100) for the first three months of card membership.
You receive 0.5% cashback on spending up to £10,000 each year, and 1% cashback on spending above £10,000.
The card has no annual fee but requires a minimum spend of £3,000 in the year to ensure every £1 spent is eligible for cashback.
It has a representative APR of 25.3%.
American Express Platinum Cashback Credit Card
This credit card from American Express is slightly more generous than the Everyday Credit Card as it gives new card members 5% cashback on purchases in the first three months of membership (up to a total of £125). You get 0.75% cashback on spending up to £10,000 each year and 1.25% cashback on spending over £10,000.
But the card has an annual fee of £25 and a higher representative APR of 30.7%.
Barclaycard Rewards Credit Card
This credit card gives 0.25% cashback on all of your spending. It has no annual fees and has an APR of 23.9%. It is also one of the best credit cards to use when travelling abroad.
You can also register for the Barclaycard Cashback Rewards scheme (indeed, any Barclaycard Visa holder can) and earn an additional 15% cashback when you spend at selected retailers.
Santander All In One Credit Card
This credit card gives 0.5% cashback on all purchases. And if you are using the card abroad you can earn 1% cashback on purchases made between 13 June and 18 September. The card has a monthly fee of £3, or £36 a year, and has a representative APR of 24.7%.
Santander operates a similar scheme to Barclays which means you can earn 15% cashback at selected retailers.