Is the new Santander cashback credit card deal any good?
Santander has released a new credit card that offers you 3% cashback back on certain travel and food spending for the first year. Is the deal worth it?
Santander has launched a new rewards credit card, offering a competitive 3% cashback offer on a range of everyday spending.
Customers can get the cashback by using the card on everyday travel, eating out, and takeaway spending for the first 12 months.
There’s no annual fee and no cap on the amount of cashback you can earn, making it a more attractive deal than some others on the market.
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As well as the 3% cashback rate on the above purchases, users can earn 0.25% cashback on all other spending for 24 months.
In your second year after getting the card, the cashback rate on travel, eating out and takeaway spending falls to 0.25%.
The Santander Rewards credit card has a representative 24.9% APR (variable).
Jessica Sheldon, MoneyWeek's deputy digital editor, said: "Cashback can be a helpful reward if you were going to spend the money anyway, but with any credit card, always make sure you can pay off the statement balance in full by the due date."
How does Santander’s Rewards credit card compare to other cards?
Santander’s deal is directly competing with other popular cashback credit cards, like those from Chase, which offers 2% cashback up to £20 a month on certain expenditure,
While Santander’s cashback offer is competitive, it may not make sense for everyone.
The 3% rate is very generous, but remember that you only get this rate on two categories of spending in the first year and get the lower 0.25% on everything else.
That means you may earn more money by using cards paying lower rates of cashback.
The Lloyds Ultra card pays 1% cashback on all spending via the card for the first year.
For example, if you spend a total of £1,300 a month (assuming £100 on takeaways, £200 on travel, and £1,000 on everything else), you can expect £13 cashback with Lloyds. With Santander’s Rewards credit card, you’d get £11.50 back.
However, if you adjust the amount spent on these categories, the cashback available via the Santander card may rise.
For instance, if you spent £300 on travel, £200 on takeaways, and just £800 on everything else, the Lloyds Ultra card would pay £13 of cashback, but you’d get £17 with the Santander Rewards credit card.
Before you apply for a credit card with Santander, it is a good idea to look at which categories you spend the most on and work out if your travel and eating expenses are high enough to justify getting the card, or whether you may be better off with a different card.
Santander Rewards credit card: What can you get cashback on?
The Santander Rewards credit card pays 0.25% cashback on all spending for the first 24 months, but you can get a higher 3% rate on certain everyday travel and spending on eating out and takeaways for the first year.
The travel category includes things like buying petrol, diesel, or charging your electric vehicle. It also extends to public transport fares on trains, buses, and the London transport system, as well as taxi spending.
Meanwhile, the eating out and takeaway category includes spending at restaurants, coffee shops, and food delivered to you. Cashback earned is paid monthly.
On top of the cashback, the Rewards credit card can be used abroad without incurring any additional foreign exchange fees.
Unlike some other credit cards that offer cashback, there is no fee for the Santander card.
Who can open a Santander Rewards credit card?
To be eligible for the credit card, you must be a permanent resident of the UK and be over the age of 18.
You must also have a guaranteed annual income of £10,500 or more and have a good credit record. Acceptance for the account is subject to a credit check by Santander, which will determine whether you can be accepted and the maximum credit limit they can offer you.
You can only have one Santander Rewards credit card.
Is the Santander Rewards credit card worth it?
While the 3% cashback rate looks generous, few people will be able to get a truly significant cashback just from spending on travel, eating out and takeaways.
For example, if you commute to work every day and it costs around £10 per day, you will spend around £200 a month on travel. With the Santander card, you will receive 3% of this as cashback, which is just £6.
If you spend an extra £100 on eating out and/or takeaways a month, this will add an extra £3.
If you spend around £1,000 a month on everything else, you will receive 0.25% of this as cashback, or around £2.50.
Together, that means you will receive £11.50 a month in cashback. Assuming that your spending stays the same for a year, you can expect to receive around £138 for the period.
Whether or not this amount is enough to justify setting up a new credit card or shifting where you spend your money depends on your personal circumstances and the current perks you get from your accounts right now.
We compare the best cards for flight points and airline rewards in a separate article.
