Up to 3% cashback with new Santander credit cardNew 123 credit card deal has an annual fee of £24

06 September 2011

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The new Santander 123 cashback credit card is a great option if you spend a lot on fuel, but the £24 annual fee and 18.9% APR make it unsuitable for borrowers and low-spenders

Santander today launches its new 123 cashback credit card, offering customers monthly cashback of between 1% and 3% on their shopping.

The reward rate on the card depends on the type of purchase:

  • 1% cashback on supermarket spending
  • 2% cashback on department store spending
  • 3% cashback on fuel spend (capped at £9.00 per month)

The Santander 123 card is available to all new and existing customers and has an annual fee of £24 and an interest rate on purchases of 18.9%.

The new launch from Santander comes hot on the heels of American Express' revamped cashback deal, offering a new standard cashback rate of 1.25% on all spending, doubled for the first three months (up to a maximum of £100). The Amex card has an annual fee of £25.

Choose a cashback credit card that matches the way you'll use it

Which? credit card expert Martyn Saville commented: 'It's disappointing to see major players like American Express and Santander introducing annual fees of £25 and £24 respectively. This means you have to spend a couple of thousand pounds just to earn enough cashback to pay the fee. If you don't use the card for a while, you'll be out of pocket.

'If you spend up to £300 a month on fuel though, this card is definitely worth considering for the high cashback rate of 3%. However, it doesn't offer any cashback at all outside of the three categories noted above. If you shop online or in smaller retailers and you're a big spender, you might be better off with the new Amex card.

'Lower spenders should avoid both cards altogether and consider cashback deals from MBNA and Virgin Money instead. And don't forget, cashback cards are only suitable if you pay off your bill in full every month as they tend to come with an above-average APR.'

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