A cashback credit card pays you back a percentage of the cash you have spent on the card, each time you use it. Depending on the card provider, you can receive up to 5% for the first three months, and others provide additional cashback on things such as supermarket shopping and petrol. This amount will typically be deducted from your bill on an annual basis and it will as though you have got ‘cash back’ into your account.
Providing that you pay off the balance in full each month and spend enough money on the card itself, a cash back card can be very advantageous, providing you with some huge savings at no extra cost.
Cash back credit cards come with various terms and conditions, including:
Based on your personal circumstances, you will need to consider how often you will be using this card and how long for. Do you have other cards that you use at the same time? Or will this be your most used card?
Some cash back credit cards come with very high cash back of up to 5%, but only for a limited time i.e 3 months. So if you spend £5,000 in the first 3 months, you will get £250 back into your account – which is a good sum of money. So if you have any particularly large purchases coming up, this would be a good time to use this deal such as moving into a new home or kitting out a new office. See also purchase credit cards.
Some cards come with no annual fee, but others can charge around £25 or as much as £84. Of course, they may come with higher cash back and lower APRs – but you will need to consider how often you use this card and whether it is worth the annual fee.
The Representative APR will be higher for some cards, but come with better offers such as more cash back and lower annual fees. The charges are only made if you do not make the full repayment each month – so if you like making minimum payments or going on payment holidays, you should probably avoid the credit cards with higher APRs.
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This will depend on the credit card you have chosen, with cash back ranging from 0.25% to 5% for a limited time only.
Yes, possibly, depending on the provider. For example, some cards provide shopping vouchers, fuel vouchers or air miles. See rewards credit cards for more information.
Yes, some providers offer cashback credit cards without fees, but they may come with other credit card charges.
Typically, cards that have the highest cash back rates tend to charge an annual fee. This can range from around £25 and £84.
If you do not pay off the balance in full each month on your credit card, you will be charged interest. This could mean that you end up paying back more than the cashback you receive.
Yes, your application potentially may be approved or declined on the basis of your credit score and file.
Late payments or failing to keep up with making repayments will cost you interest and additional charges. It will also damage your credit score, affecting your ability to apply for other forms of credit.
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