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Cash Back Credit Cards

How a cash back credit card works

Cash back credit cards work like any other credit card, allowing you purchase items instantly on credit. The difference lies in that you will be rewarded with cash back for each of your purchases, and these cash rewards can often add up to hundreds of pounds in a year, with some cards paying as much as 5% cash back for the first three months.

Our Expert choice:Barclaycard Platinum With BT

Our Expert Choice Credit Card

0% interest on balance transfers for 34 months from account opening (2.99% handling fee applies). A fee of 3.5% will be applied, then reduced to 2.99% by a refund.

  • 0% interest on purchases for 6 months from account opening.
  • 18.9% APR Representative Variable.

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Expert Choice Credit Cards
Balance Transfers Purchases
Credit Card Rate Duration Fee Rate Duration Representative APR Apply
American Express
N/A N/A N/A N/A N/A 18.7%Variable
Enjoy a generous 5% cashback on virtually everything you buy for 3 months, on up to £2,500 in purchases. After the introductory period you’ll receive 1.25% cashback on virtually everything you buy – not just for a limited period. 2.5% cashback in the first month of every year if you spend more than £10,000 in your previous 12 months.
Representative Example: If you borrow £1200 at a purchase rate of 14.0% p.a.(variable), with an £25 annual fee, you will pay 18.7% APR Representative (variable).

American Express | Platinum Cashback Credit Card

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Capital One
N/A N/A N/A N/A N/A 19.9%Variable
Capital One Aspire® Elite. Our most prestigious credit card offers cashback on any purchase with VIP benefits. 5% cashback for the first three months (max £200). Up to 2% cashback thereafter. Concierge service.  Extended warranty. Best price protection. Annual fee applies.
Representative Example: If you borrow £12000 at a purchase rate of 17.57% p.a.(variable), with an £120 annual fee, you will pay 19.9% APR Representative (variable).

Capital One | Aspire Elite Card

American Express
N/A N/A N/A N/A N/A 19.9%Variable
5% cashback during your first three months on up to £2,000 in purchases. After the first three months you’ll earn up to 1.25% cashback, depending on how much you spend on the Card: Spend £0 to £3,500 and receive 0.5% cashback on that spend. Spend between £3,500 and £7,500, receive 1% cashback on that spend. Spend over £7,501 and receive 1.25% cashback on that spend. As long as you spend a minimum of £3,000 in a year, almost every full pound you spend on your Card qualifies for cashback.
Representative Example: If you borrow £1200 at a purchase rate of 19.9% p.a.(variable), you will pay 19.9% APR Representative (variable).

American Express | Platinum Cashback Everyday Card

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0.0% 1 Months 3.0% 0.0% 18 Months 16.5%Variable

Get cashback on your everyday spending: 1% cashback at all major supermarkets, 2% cashback at all major departments stores, 3% cashback at all petrol stations and on National Rail and Transport for London travel (on combined spend of up to £300 a month). Terms & Conditions apply. 0% for 18 months on purchases from account opening. 16.5% APR Representative (Variable). Annual fee and terms apply. If you already have, or if you open a new Santander 123 Current Account, Santander will refund the first year's £24 annual fee on your 123 Credit Card. Offer valid until 31/12/2014. Contactless payments on items below £20. Subject to status. 

Representative Example: If you borrow £1200 at a purchase rate of 12.7% p.a.(variable), with an £24 annual fee, you will pay 16.5% APR Representative (variable).

Santander | 123 Credit Card

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Capital One
N/A N/A N/A N/A N/A 34.9%Variable
Great for people who want to build or rebuild their credit rating. Offers 0.5% Cashback on all purchases. Earn a £10 annual reward for paying on time each month. Credit limit from £200 to £1,500.
Representative Example: If you borrow £1200 at a purchase rate of 34.94% p.a.(variable), you will pay 34.9% APR Representative (variable).

Capital One | Classic Extra Card

MoneyExpert Ltd is a Credit Intermediary and receives commission payments for all credit cards referrals made on our website. This does not apply to Tesco Bank, NatWest and Royal Bank of Scotland. The rates displayed in this table are updated on a daily basis.

Avoid incurring charges

There is a risk of incurring charges if you run over your limit or are unable to cover the balance of your card at the end of the month. Such charges will likely be greater than any saving than you will make by using the card, and therefore it is advisable that you only use a cash back card if you are very confident that you will be able to afford your monthly payments.

Watch out for high interest rates

Some cash back credit cards can have high interest payments which can outweigh the benefit of having a cash reward. For example if you're getting 5% cash back on your purchases but at the same time are paying 20% in interest payments then you're getting a good deal. As long as you avoid allowing your credit to roll over each month though, you'll avoid interest charges altogether.

Always be disciplined

Cash rewards can also make the idea of spending money to earn the cash back attractive, when in reality you would be saving more money if you simply reduced your spending. This is especially true when different cards have different rates and with some cards the more you spend the greater the percentage of cash back per purchase you will be rewarded with. For example if you spend £1000 then your cash back rate might be 1%, but if you spend £2000 your cash back rate increases to £2000. For this reason it's important to stay disciplined when using your cash back credit card and make sure that you spend only what you can afford to.

There may be an annual fee

Some cash back credit cards also have an annual fee associated with them that can cost anywhere from £25 to £100. The annual fee will shave off a certain about of the money you get as a cash back, but depending the cash back rate you're getting, the card might still be saving you significant amount of money each year. For this reason you shouldn't avoid using a card altogether just because they have an annual fee.

A cash back credit card is well suited for you if:

  • You are looking to make big purchases on items such as cars, furniture and holidays. This will enable you to make big savings in the way of high percentage cash backs.
  • You are very confident that you will not have a problem in clearly your monthly accrued credit, and therefore avoid having to pay high interest rates.
  • You are disciplined and will be able to resist any urge to overspend in order to attain cash back rewards.

You should avoid cash back credit cards and look for an alternative if:

  • You are not looking to spend any more money but currently possess some debt that you want cleared. In this case you could looks at using a 0% interest transfer credit card.
  • You are hoping to be able to borrow money for some purchases and want to be able to pay back the debt over an extended period while paying low interest rates. In this case you are better off with a low interest rate credit card.
  • You find it difficult to avoid spending when there are benefits attached to making purchases.

If you feel unsure of whether or not a cash back credit card would be right for you, or you are unsure of which other credit would be best suited for you current situation then contact us for free specialist advice on what the best options are for you. We understand that looking for the best deal can be daunting with the number of different credit cards there are on offer, and that's why we're here to give a helping hand.

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