The best credit cards for cashback

The promise of free money always gets people’s attention. And so it is with cashback credit cards. To boost their market share, credit card companies try to tempt customers with attractive sounding cashback rates.

But there are downsides. The rates are usually introductory – lasting just three months or so; many charge a fee; and nearly all of them have uncompetitive interest rates.

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.

So if you want to take full advantage of credit cards that offer cashback you’ll have to do two things:

• Use them for all your spending (but beware purchases with credit card fees).

• Pay the full balance off every single month without fail.

If you can’t guarantee to do that, you’d be better off going for a card that offers a much lower interest rate, such as the Sainsbury’s Bank Nectar Low Rate Credit Card. It charges just 7.9% APR and, while it doesn’t give you cashback, it does give you double Nectar points on your Sainsbury’s shopping, and one Nectar point for every £5 spent on your card elsewhere.

But if you do have the discipline to make cashback cards work for you, here are the best cards at the moment:

American Express offers two cards – the Platinum Cashback card and the Platinum Cashback Everyday card. Both offer 5% for the first three months (max cashback £100).

The Platinum Cashback card charges £25 a year and gives 1.25% cashback after the introductory period has ended. However, if you spend more than £10,001 in a year, you will get a rate of 2.5% for one month.

The Platinum Everyday Cashback card offers tiered rates: 0.5% if you spend up to £3,500 a year; 1% between £3,501 and £7,500; and 1.25% over £7,501. You don’t have to pay a fee.

Capital One’s Aspire Elite Mastercard also offers 5% cashback – this time for 99 days. But there is a hefty £120 annual fee, and you must earn at least £50,000 a year. Once the introductory rate expires, the card offers tiered cash back: 1% on spending up to £14,999 a year; 2.00% between £15,000 and £49,999; and 1.35% over £50,000.

Santander’s 123 MasterCard doesn’t have an introductory period. Instead, it offers different cashback rates depending on what you buy. You get 1% buying at supermarkets, 2% at department stores, and 3% on petrol, train and tube fares, up to a maximum spend of £300 a month. There is a £24 annual fee.

Beyond these, you’ll be lucky to find cards offering more than 0.5% cashback.

Nationwide Building Society Select Credit Card offers 0.5% cashback, and 0% interest on purchases for 15 months.

Asda Money Credit Card offers 1% on Asda purchases and 0.5% elsewhere.

Co-operative Bank Members’ Credit Card offers 1% on spending at Co-op food shops, and 0.5% elsewhere. You must be a Co-op member.

Bank of Ireland UK Moneyback MasterCard and Moneyback Gold MasterCard each offer 0.5% cash back on spending up to £15,000 per year.

Provider Card Initial cash back Time limit Max under offer Regular cashback Fee Restrictions
American Express Platinum Cashback card 5% 3 mths £125 1.25%, plus 2.5% for one month if you spend over £10,001 in a year £25/yr
Capital One Aspire Elite Mastercard 5% 99 days £200 1% up to £14,999pa,
2% £15,000-£49,999,
1.35% over £50,000
£120/yr Min income  £50,000pa
American Express Platinum Everyday Cashback card 5% 3 mths £100 0.5%  up to £3,500pa,
1% £3,501-£7,500,
1.25% over £7,501
Santander 123 MasterCard N/A N/A N/A 1% at supermarkets,
2% at dept stores,
3% on petrol & train tickets
£24/yr Can only claim cashback on £300 spend a month
Nationwide Select Credit Card N/A N/A N/A 0.5%
Asda Asda Money Credit Card N/A N/A N/A 1% at Asda,
0.5% elsewhere
Co-operative Bank Members’ Credit Card N/A N/A N/A 1% at Co-op food shops,
0.5% elsewhere
Must be a Co-op member
Bank of Ireland UK Moneyback MasterCard N/A N/A N/A 0.5% Can claim cashback on expenditure of up to £15,000 a year