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Credit Card News
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10th May, 2012
Credit cards or loans – which is better? -
3rd May, 2012
Are your credit card details for sale to the highest bidder? -
20th April, 2012
Never look a gift card in the mouth… -
6th April, 2012
Want an Easter break? Where can you get the best value for money?
Cash Back Credit Cards
Our favourite for May
Best Cash Back deal in the UK
American Express Platinum Cash Back
- 5% Cash back in 1st 3 mths up to £100
- Up to 1.25% cash back after that
- Double cash back every 13th month
- Enhanced Purchase Protection
- American Express Insurances Package
Representative APR 18.5%
Also consider
Dynamic Cash Back Offer
Capital One World MasterCard
- 5% cash back in 1st 3 months up to £100
- 1.25% UNLIMITED cash back thereafter
- No annual fee
- Capital One Identity Alert
- Competitive interest rate on £ withdrawal
Representative APR 19.9%
Here’s our selection of the best cash back credit cards.
Cash back credit cards give you a percentage of every pound you spend on your credit card back to you. This sounds fantastic, but as always, check out the small print to see what this means to you. Decide if the way you organise your finances means that you’ll actually get to see and spend the cash back!
There are even some prepaid credit cards that offer cash back these days, but they only offer cash back from certain retailers.
To see a net gain from cash back credit cards (that offer credit) you HAVE to pay off your credit card in full, every month without fail.
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American Express Platinum Cashback Credit Card | 5% cashback 1st 3 mths, 1.25% thereafter, 0% on purchases for 6 mths | 3% | 18.5% APR |
5% cashback for first 3 months, up to £100 Double cash-back every 13th month Enhanced purchase protection Quality American Express insurances
£25 annual fee No balance transfer deal |
Capital One World MasterCard | 5% cash back in 1st 3 months + unlimited cash back of 1.25% on all future spending | N/A | 19.9% APR |
5% cash for 1st 3 months up to £100 1.25 % cashback on all purchases thereafter No longer has an annual fee Capital One Identity Alert Only available to those with perfect credit No balance transfer or purchases deal |
AA Credit Card | 0% balance transfers for 12 months & purchases for 10 months | 3.00% | 16.9% APR |
Good dual offer 12/10 £ transfers as well as balance transfers Cashback on fuel spend AA Rewards points No balance transfers from MBNA cards |
CashPlus Gold Prepaid MasterCard Credit Card | Top prepaid card, cash-back & comes with Euro card | Prepaid | Prepaid |
CashBuilder feature to build credit rating Purchase Protection Cash back and rewards Shop onlineCash Back Credit Card Guide
The cornerstone of our advice on cash back cards is that if you’re not able to clear your balance every month, any interest costs or charges levied to your card account are likely to be more than even the best cash back credit card could potentially give you back.
Settle your balance in full by direct debit
If you’re sure that you can settle your credit card account every month, cash back credit cards could be great for you, but make sure you set a direct debit from your current account to clear the outstanding balance on the card, even if you forget.
We’ve found that few credit card companies offer you an option during the application process to set-up a direct debit to clear your balance in full every month. This is because the cash back incentive is being offered by the credit card issuer to get consumers to take out the card, and then carry balances on these cash back cards. Of course it’s that interest that generates their profit.
All you have to do is telephone the card issuer once your new cash back credit card has been issued and ask them to clear your monthly balance by the due date via direct debit. You might find that you can set it up yourself via online access to your new account.
Our Cash Back Reasoning
For a credit card to be included in our best cash back credit card list, it has to give you real cash back. That means money in an account that you can spend wherever you like. We don’t include Barclaycard cards because although they have an excellent rewards credit card program, their scheme ties you into spending your gains with the retailers only within their scheme.
If your financial situation doesn’t allow you clear your credit card balance in full every month, you should consider purchases credit cards. These cards allow you a long interest free period on new purchases. This allows the maximum amount of your monthly payments to go into reducing your outstanding balance, and doesn’t waste money paying interest to the credit card issuer.
Most experts agree that used correctly, the best cash back credit cards can give you a better overall return than any other type of credit card incentive. If you’re in a position to claim your business expenses back from your employer, what better vehicle is there for settling those day to day payments than a cash back credit card that pays a cut of those expenses back to you!
Most cash back credit cards offer a cash back return of between 0.5% and 2% paid once a year, however there are potential limitations. You have to run your cash back credit card completely within the terms and conditions for the year to receive any rewards – no missed payments or breaches of credit limit!
Other things to watch out for on cash back credit cards:-
- Cash back only accumulates on certain types of purchases, these vary with all the cards, but cash advances, gambling transactions, fees, interest and amounts credited to your account as refunds are usually specifically excluded.
- Some of the best cash back credit cards carry an annual fee, do a quick calculation and work out if with your projected annual spend the cash back rewards would more than offset this fee.
- Check for and understand ‘dormancy fees’. These are a new type of charge which can be levied if you don’t use the card for purchases beyond a certain level in the preceding year.
- Don’t use cash back credit cards for cash advances (unless obviously there’s a clear emergency). There are high fees for cash withdrawals, and you won’t get any cash back credit on these amounts.
- Many cash back cards pay the cash back to you once a year via a cheque on the anniversary of issue, and if you cancel the card before the renewal date (when another annual fee maybe due) you waive the right to the cash back rebate for the whole preceding year.
- Many cash back credit cards stipulate a minimum annual or monthly spend to get their top cash back rates. Check if you’re likely to actually be due the advertised rate for your likely level of expenditure.
There are some great promotional deals around for you to compare; some cash back credit cards are offering up to 5% cash back for the first 3 months after acceptance. If you have a period of heavy expenditure planned, like maybe moving house and buying new furniture, these kind of deals can work to your advantage giving you a decent discount that may not be available normally on premium brands or products.
As always when you’re looking at new credit cards, you have to look at your life and financial profile and really see if the cash back on offer will offset any charges or interest you might not otherwise have incurred if you didn’t have the card in the first place.
