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