We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies as per our policy which also explains how to change your preferences.

Best cash back credit cards

Cashback credit cards can help you make money every time you spend. Some pay as much as 5% which could earn you hundreds of pounds a year. Find out if this type of reward card is right for you.

In this article
What is a cashback credit card? How do cashback credit cards work? Cashback credit cards golden rules to follow Use our cashback credit card calculator
What are the best cashback credit cards? Who are the best cashback credit card providers? Cashback credit cards: what you need to know 

What is a cashback credit card?

A cashback credit card is a type of reward credit card that pays you a percentage of what you spend back in the form of a credit on your bill; monthly, quarterly or annually.

In the past there were a huge number of cashback credit cards to pick from. But the EU’s cap on the interchange fees providers can charge merchants in 2015 – which helped fund this perk –has led to a number of UK deals being pulled.

So if you are trying to be savvy with your money and earn extra cash for your everyday spending you should move quickly while deals from American Express, Aqua and Santander are still around.

 
 

How do cashback credit cards work?

Cashback credit cards pay a rate of cashback that dictates how much you can earn each time you spend.

Some come with introductory rates that may be capped followed by an on-going rate while others pay a flat unlimited rate for as long as you have the card.

The trick with a cashback credit card is to use it like a debit card and load all your everyday spending onto it to rack up the rewards.

Many of these cards charge an annual fee, but if you regularly spend on your card and repay the balance in full each month, you could earn hundreds of pounds a year.

 

 

Cashback credit cards golden rules to follow

With a cashback credit card there are a few things to bear in mind to make sure you use them effectively. We’ve set out the golden rules below.

#1 Avoid borrowing

Cashback credit cards are a rewarding tool if you only use them to spend money you actually have like you would with a debit card.

They’re generally not very good for borrowing, with few cards offering competitive 0% deals.

If you're already paying interest on credit card debt, it's worth considering a 0% balance transfer card or if you want to spread the cost of a new purchase try a 0% purchase card.

#2 Pay off the balance in FULL every month

It’s important to make sure you pay off the balance of your cashback credit card in full every month otherwise the interest could outweigh the rewards.

With this in mind, we recommend you set up a direct debit to clear your balance each month so you don’t forget.

#3 Maximise your cashback with everyday spending

To get the most out of your cashback credit card you should try to use it as much as possible.

The best cashback credit cards reward you every time you make a purchase, so it makes sense to use them instead of cash or debit cards whenever you can.

Use our cashback credit card calculator

Wondering if a cashback credit card is worth it?

Use our cashback calculator to find out how much cashback you could earn in a year based on your typical monthly spending habits.

What are the best cashback credit cards?

Here are the best cashback credit card deals around right now.

Credit card Cashback rate Fee

Representative

APR

American Express Platinum Cashback Everyday Credit Card -5% cashback for first three months capped at £100.
-0.5% cashback on spends up to £5,000 or 1% if you spend over £5,000 in a year.
No fee 22.9%
American Express Platinum Cashback Credit Card

-5% cashback for first three months capped at £125.

-1% cashback on spends up to £10,000 or 1.25% if you spend over £10,000 in a year.

£25 annual fee 28.2%

 

 

Who are the best cashback credit card providers?

As well as finding a cashback credit card which is the most rewarding for you based on your spending habits you should also consider how good the cashback credit card provider is.

But unless you’ve been a customer before that’s pretty hard to do.

Fortunately, Which? has rated 29 of the largest credit card providers to help you find out what they’re like for customer service, fees and benefits before you sign up.

You can check out reviews of the biggest names in the cashback credit card market like American Express and Aqua in our best and worst credit providers.

Cashback credit cards: what you need to know 

Have a cashback credit card query? See if you can find the answer in our Q&A below.

 

Why use a cashback credit card?

 

A cashback credit card is a great tool to reward yourself on your everyday spending.

Getting one isn’t about getting into debt, just about being savvy with your shopping and being rewarded without spending more than you normally would.

 

Are cashback credit card rewards taxable?

 

Cashback rewards on a credit card aren’t subject to tax. That’s because cashback is seen as a rebate on money you’ve spent rather than income.

You can find further details in the HMRC guidance and in Example 3 here.

 

Can I use a cashback credit card to clear debt?

 

A cashback credit card works best when you are using it to replace your debit card for everyday spending.

Few cashback credit cards come with introductory offers on 0% on balance transfers and when they do, they tend not to be as competitive as cards dedicated to shifting and freezing debt.

If you have credit card debt, check out the best balance transfer credit cards using Which? Money Compare.

 

Can I use a cashback credit card to spend interest-free?

 

Few cashback credit cards come with an introductory 0% purchase offer and the ones that do tend not to be the best out there.

You’d be better off looking for the best interest-free credit cards if you want spread the cost of a purchase.

 

Do cashback credit cards offer section 75 protection?

 

Cashback credit cards come with the same section 75 protection as other credit cards.

So if you make a purchase worth between £100 and £30,000 on a cashback credit card the card issuer is equally liable with the retailer if something goes wrong.

 

How is cashback paid on a credit card?

 

The cashback you earn by using your cashback credit card is usually paid back in the form of a credit on your bill.

 

When is credit card cashback paid?

 

Cashback is usually paid monthly, quarterly or annually depending on your provider. Some cards may also require a minimum yearly spend before you can qualify for cashback.

Make sure you check the terms of the deal before signing up.

 

Does cashback count towards my minimum payment?

 

Cashback does not count towards your minimum monthly credit card repayment so don’t rely on this to help you pay your bill.

 

Will I get cashback on items I return?

 

Cashback is only paid on what you spend, so if you buy something and return it your cashback balance will be adjusted to reflect this.

 

Will I get cashback on interest and balance transfers?

 

No cashback will be earned on interest, fees, balance transfers, cash advances or loading prepaid cards.

 

Is a reward credit card better than a cashback credit card?

 

Cashback credit cards let you earn money back on your everyday spending, which you can then use on other purchases.

However, if you tend to be a loyal a particular shop you could be better offer with a reward credit card that offers points which can be turned into vouchers to spend there.

You can compare reward credit cards on Which? Money Compare.

 

Can you get a cashback credit card with bad credit?

 

You will need to have a decent credit rating to get a cashback credit card so you should check your report to see if it can be improved.

Use our guide credit reports: all you need to know for the lowdown.

However, those with a poor credit history may also be able to benefit from credit builder cards which offer cashback.

Just bear in mind that your credit limit will be fairly low to begin with and these cards come with a high APR so you should make sure you repay what you owe each month to reap the rewards of any cashback offer.

×