WE all know that you get nothing for free in this world but there is a way you can earn cash – simply by spending money.
If used properly, cashback credit cards can reward you for your everyday spending – and you can get a tidy boost to your bank balance.
Alamy You can save as you spend with cashback credit cards
But be warned – card companies offer these types of deals because they want you to spend.
If you don’t repay your balance in full each month, you’ll start paying interest and that will wipe out most – if not all – of the cashback you’ve earned.
So make sure you clear your balance in full by setting up a direct debit to clear the bill.
Remember that these cards are also best when you use them like a debit card – Brits who make the most of them put all their spending on them and then clear the balance when they’re paid to maximise what they earn.
If you need to borrow, you should forget about a cashback card and think about a 0 per cent purchase card instead.
And like all credit cards – applying for one will leave a mark on your credit file. But by using an online eligibility checker, you’ll get a better idea of your chances of getting accepted.
For example consumer site, MoneySavingExpert, have an online calculator which you can use to see which cards you’re most likely to be accepted for, without affecting your credit score.
Money expert Andrew Hagger said: “Rewards and cashback cards are definitely worth the effort – but only as long as you repay your statement balance every month otherwise the interest charges will pretty much wipe out any rewards or cashback earned.”
How to cut the cost of your debtBEING in large amounts of credit card debt can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport.If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner – If you have more than one credit card and can’t afford to pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them.
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don’t pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans
The most generous cashback cards on the market
Below are the cards that currently sit at the top of the best buy tables, based on data from Moneyfacts.
We’ve worked out how much you could potentially save based on a family with a weekly spend of £200 a week (£10,400 a year) with a £40 a week spend on petrol (£2,080).
American Express Platinum Cashback Everyday Credit Card, APR 22.9 per cent – Apply Here
The American Express (Amex) card is the top card on the market currently, giving you the chance to earn a chunky 5 per cent on your first £2,000 of spending within the first three months – earning you a maximum of £100.
After the intro offer is over, you’ll get 0.5 per cent cashback on spending up to £5,000 and then one per cent on spending above that.
Remember that Amex isn’t as widely accepted by retailers as Visa and Mastercard based credit cards either, so you might not be able to use it in some shops.
Also keep in mind that you need to need to spend at least £3,000 in a year to receive any cashback.
The card’s APR is 22.9 per cent – so make sure you clear your balance fully each month.
Potential cashback after a year: £189.80
Santander All in One Credit Card Mastercard, APR 21.7 per cent – Apply Here
This card by Santander offers 0.5 per cent cashback on spends over £1 per month, but it comes with a monthly £3 fee, which will eat into the cashback you’ve earned.
You can get the fee for the first six months refunded if you open a 1l2l3 Current Account, Select Current Account or Private Current Account with Santander.
The All in One credit card charges no interest on balance transfer or purchases for the first 26 months, but after this any outstanding balances and new purchases will be charged interest rates of 15.9 per cent.
The card comes with an APR of 21.7 per cent.
Potential cashback after a year (excluding fee): £62.40
Tandem Cashback Credit Card, APR 18.9 per cent – Apply Here
The Tandem card gives you 0.5 per cent cashback on all purchases, along with no maximum limit on how much you can earn.
It has no monthly fees or any fees on purchases abroad, but you’ll be charged a fee of 2.5 per cent on cash withdrawals in the UK, with a minimum charge of £2.50.
You should also be aware that there is a £12 fee if you make a late payment, or your payment fails. The card comes with an APR of 18.9 per cent.
Potential cashback after a year: £62.40
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The best ‘shopping’ cashback cards
These types of cards reward your loyalty for spending in certain shops.
Asda Cashback Credit Card, APR 19.9 per cent – Apply Here
You’ll get one per cent back on shopping at Asda including petrol and online and 0.2 per cent cashback everywhere else.
The card doesn’t pay you back in normal cash but in Asda vouchers which can used in store.
John Lewis Partnership Card, APR 18.9 per cent – Apply Here
This card gives you one point for every £1 you spend at John Lewis or Waitrose and one point for every £2 spent in other shops.
These are then turned into vouchers that you can spend in either John Lewis or Waitrose.
You’ll get a £5 gift voucher to use in either shop for every 500 points you earn.
Sainsbury’s Nectar Dual Credit Card, APR 20.95 per cent – Apply Here
If you regularly shop at Sainsbury’s and use a Nectar card, the Dual credit card is one to consider as it boosts your Nectar points.
In the first two months you’ll also get 750 bonus Nectar points worth £3.75 when you spend over £35 at Sainsbury’s.
You can use this up to 10 times to a maximum of 7,500 points worth £37.50.
As well as this bonus, you get two Nectar points for every £1 you spend in Sainsbury’s stores, but keep in mind that petrol stations don’t count.
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