While living costs remain high and disposable income dwindles, cashback credit cards are becoming an even more popular tool to help Britons make some savings.
These credit cards reward spenders with a percentage of cashback based on how much they spend online or in-store, and some providers are offering up to five percent.
But, it’s important to note that like most credit cards, cashback credit cards come with interest charges, a credit limit, a monthly statement, and an Annual Percentage Rate (APR).
The APR provides an estimate of how much credit card borrowing will cost over a year, as a percentage of the money borrowed. The higher the APR, the more expensive it’ll be for a person to borrow.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, commented: “Cashback credit cards are useful for shoppers who plan their spending, whether that be for Christmas, in the New Year to take advantage of enticing sales or just everyday use.”
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However, she noted: “The amount of cashback each credit card provider will pay does vary, but so does the interest they will charge on the debt, which is why maximising the cashback is wise, but so is paying off any debt before interest applies.”
So, what are the top cashback credit cards on offer right now? Moneyfactscompare has compiled the list.
American Express cashback card
Topping the list is American Express’s Platinum Cashback Card offering five percent cashback for three months (max £125), then 0.75 percent tiered to 1.25 percent depending on the spend.
The card has a purchase APR of 36.7 percent and comes with a fee of £25 a month.
The provider is also offering a Platinum Everyday Cashback Card with no monthly fee. The card comes with five percent cashback for three months (max £100), then 0.5 percent tiered to one percent depending on the spend. This card has a purchase APR of 31 percent
Ms Springall said: “One provider to offer an additional incentive for shoppers is American Express. From December 1 to December 3, it will give customers a £5 statement credit when they spend £15 or more at participating small businesses across the UK through its popular Shop Small Offer.
“As consumers will notice, this is a limited period for shoppers to maximise the reward, and they will need to enrol for the offer to take advantage.”
Santander cashback card
Placing next is Santander’s World Elite Mastercard offering 0.5 percent on spends over £1 per month on purchases up to £3,000.
The card has a purchase APR of 49.8 percent and comes with a monthly fee of £15. Additionally, cardholders can benefit from an introductory zero percent on purchases and balance transfers for 18 months. People can also get access to “thousands” of airport lounges, as well as a 40 percent discount on Santander travel insurance when they apply online.
Costing a more modest £3 a month, Santander’s All in One Credit Card Mastercard offers 0.5 percent cashback on spends over £1 per month.
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The card has a purchase APR of 29.8 percent and similar to the World Elite card, offers an introductory zero percent on purchases and balance transfers but for a shorter period of 15 months. Cardholders also will not have to pay foreign exchange fees on purchases overseas.
Halifax and Lloyds Bank cashback cards
Placing next on the Moneyfacts leaderboard table is Halifax and Lloyds Bank’s World Elite Mastercard offering 0.5 percent on spends up to £15,000 per month, then one percent on purchases totalling over £15,000 in each anniversary year from account opening.
The cards have a purchase APR of 55 percent and come with a monthly fee of £15. The cards also come with travel benefits, including a priority pass and airport security fast track.
With no monthly cost, Halifax and Lloyds Bank’s Cashback Credit Card Mastercard offer 0.25 percent on spends up to £4,000 per year, then 0.5 percent on further purchases. People can also earn £20 cashback if they make card purchases of £1,000 within the first 90 days of account opening. The cards have a purchase APR of 29.9 percent.
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Smile cashback card
While it is currently not accepting new applications, smile, a trading name of the Co-operative Bank, placed just behind with its Classic Credit Card offering 0.25 percent cashback on spends over £1 per month. The card has an APR of 19.9 percent and has no monthly fee.
Barclaycard cashback card
Barclaycard’s Reward Visa is offering 0.25 percent cashback on spends over £1 per month, plus no transaction fees when abroad. The card has no monthly cost and an APR of 28.9 percent.
MBNA Limited cashback card
Finally, MBNA Limited’s Platinum Visa rounds off the list, offering 0.25 percent on spending over £1 per month, within the first 36 months of account opening. The card has no monthly fee and an APR of 13.9 percent.
Ms Springall said: “Credit cards are a good method to use for spending in general, as shoppers are protected under Section 75 of the Consumer Credit Act.”
Away from credit cards, Ms Springall said: “Shoppers would be wise to make the most of any loyalty cards they possess.
“As it can be easy to forget the card when out shopping, consumers could download an app called Stocard and store all the cards in one place which can be scanned at the till.
“Now is the perfect time for shoppers to cash in those loyalty points, such as with Sainsbury’s Nectar and Tesco Clubcard schemes to go towards the festive spend.”
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