What is a cashback credit card?
Cashback credit cards are a type of credit card that gives you the chance to earn some cash back every time you use your credit card.
How does credit card cashback work?
Cashback credit cards work by paying you a small percentage of the purchase price back, or by giving you reward points.
Cashback lets you get money off the things you buy. Cash back credit cards offer cashback as a reward for using the credit card. Every time you use the card, you earn a percentage of your spend back.
For example if your card pays 1.5% cashback and you spend £100 in a shop, you will earn £1.50 back. Think of it as a small discount for each purchase. While the amount of cash for a single purchase may seem small, over time these amounts can add up and really save you money.
Some cash back credit cards will pay you your cashback monthly, but it is usually once a year.
If a cashback credit card pays 1% cash back on everything you buy, you could earn £50 if you spend £5,000 a year. While this might not seem like a lot, if there are no fees associated with the card, it's essentially free money.
Sometimes cashback is only offered on a few things you buy, like petrol or your energy bills.
What are the different cashback offers and deals
Not all cash back credit cards are the same. Cashback cards offer a range of different deals and rewards.
Some cash back credit cards will just pay you cashback as a flat rate. For example 2% on everything you buy.
Other cashback credit cards pay cash back at different levels when you spend more or less. For example, a cashback credit card may pay you 1% if you spend £5,000 a year on your credit card, and 2% cash back if you spend more than that.
Cashback credit cards can also offer different amounts of cash back for spending in different shops. A cash back credit card may give you 0.5% cashback on money you spend when you do your weekly food shop at a supermarket, but 1% when you buy things from a chain of electrical stores and 2% on all of your petrol purchases.
What is the difference between a cashback card and a rewards card?
Cashback credit cards earn you cash back every time you spend money on the card. Usually the cash back is given to you as money off the amount you owe on your credit card.
For example, if you spend £10,000 on a cashback credit card that gives you 1.5% cashback, you will have earned £150 cash back. So your credit card bill is £9,850 instead of £10,000. This is a no-fuss way to save some money on your everyday purchases.
Reward credit cards don’t work that way. With reward credit cards you earn points. These can be worth different amounts with different reward cards.
For example, with a reward card you may earn 1 point for every pound you spend using the card. If you spend £10,000 you will earn 10,000 points. The reward points may be worth 1p each. So you would earn £100 as a reward.
In this example, you would be better off with a cashback card. Remember, you can only spend reward points in certain places.
All rewards cards also don’t offer the same kinds of rewards. While some may offer points to redeem prizes, others may offer Air miles, or hotel vouchers.
How to find the best cashback credit card?
To find the best cash back credit card for you, take into account the options.
Some credit cards offering the top cash back deals are only accepted in a few shops and services, such as American Express. This may mean you can’t use it for your regular shopping trips.
Cash back credit cards have different terms and conditions. For example:
The top cashback cards often only offer the best cash back rate for a short period of time. These introductory offers may only be for as little as three months. So you may get 3% cash back on what you spend for the first three months of using the card, then it drops to 1%.
Minimum spending requirements
You may need to spend a minimum amount on a cash back credit card to actually get the cash back. Where you are unlikely to spend the minimum there is little point getting the cash back credit card.
Some cash back credit cards charge a yearly fee. These cashback credit cards can offer the best cash back rates. But you need to work out if the cashback you are likely to get will be more than the fee you have to pay for the card.
Fees for cash back credit cards can range from a couple of pounds a month, to around £25 a year.
Paying for the cash back credit card means you actually get less in cashback. For example, if the card fee is £20 a year and you earn cash back of £100, really you are only getting cash back of £80.
If you don’t spend much on a credit card any cash back you earn from it may be taken in fees so try to do the sums to make sure you're coming out in front if you are approved for a cashback credit card.
Is a cashback credit card right for me?
To get the best cashback credit card deals, and earn the most cash back, you should use the cash for most of your spending.
But you should only spend what you need. Spending more on a cash back credit card just to earn more cashback is a bad idea. You will end up losing money in the long run, or getting into debt.
For example, if you spend more than you can afford on your cash back credit card, you may not be able to pay it off. Then you will be charged interest. These interest charges will be higher than the cashback you earn, so you will lose out. If you can't pay off the balance of your credit card each and every month, the interest will cost you far more than any rewards you might earn.
Always aim to pay off your credit card each month on time, and in full.
What does 'most popular' mean?
When we use the term ‘most popular’ on Uswitch in reference to credit cards, these cards are ranked by the number of clicks they have received on the site in the past 48 hours.
The most clicked on cards are at the top, with the least at the bottom. This reflects how popular they are with visitors to Uswitch.com. Consequently, this is a good table to look at if you’re interested in seeing which cards most people think are worth getting.