Cashback credit cards pay you back a percentage of what you spend on them. Find out how to maximise the amount you can earn.
With a cashback credit card, you earn back a percentage of what you spend on it.
Cashback rates vary from card to card. Typically, they offer from 0.25% and even up to 5% as an introductory offer.
They work like this: if your card offers a cashback rate of 1% and you spend £400 on it, you’d receive £4 cashback.
At the moment, cashback cards are harder to come by than ever, and rates aren’t as good as they were a few years ago. But there’s still the chance to make a little money back from spending on them.
The key is to always pay back in full what you owe every month so you never get charged interest.
Rates can be higher compared to other credit cards, so could quickly wipe out any cashback you earn.
You can earn cashback from all your everyday spending; like the weekly shop, a meal out, or for filling up with petrol. Online transactions count too, and bigger purchases you make on the card like a new TV or a holiday can boost the amount of cashback you earn.
Though not strictly cashback cards, there are similar cards that offer reward points as you spend on them, which translates as money off flights, hotels or shopping.
Retailers like Tesco, M&S and Sainsbury’s offer credit cards where you build up points that are converted into vouchers to redeem in their stores.
You get points for all your spending on the card, wherever you shop, but you get a higher rate of points for spending in their particular stores.
The M&S Bank Shopping Plus Offer credit card gives you one point for every £1 you spend in M&S and one point for every £5 you spend elsewhere. And the Tesco Bank Purchases Card gets you five Clubcard points for every £4 you spend in Tesco and one Clubcard point for every £8 you spend elsewhere.
Cashback is paid automatically into your credit card account either every month, or once a year, depending on the card provider.
In the case of other reward cards, airmiles can be redeemed by logging in to your airmiles rewards card site. And points are automatically added to your supermarket or store loyalty card as you earn them on your credit card.
To be accepted for a cashback card, you’ll usually need a healthy credit score.
Use our online credit card eligibility checker to assess your chances of being accepted before you apply.
It uses a ‘soft’ credit search that lenders won’t be able to view on your credit report, no matter what the result is. It won’t negatively impact your credit rating.