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Best credit card deals

Best cash back credit cards

By Rob Goodman

Article 4 of 6

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Best cash back credit cards

Cash back credit cards and reward credit cards let you earn a percentage of your overall spend, which is either paid back on to your card as credit or via in-store vouchers. 

Video transcript

Do you want to get a little something back each time you shop, cashback and reward credit cards let you do just that, but are they right for you?

With reward cards you get
rewards in the form of points which you can redeem with certain retailers while cashback cards pay you tax-free cash. The key to picking the right reward card is where you do your shopping and how much the rewards are worth.

Most credit cards with the rewards scheme offer more points when you spend at the associated stores. So, for example, a Sainsburys credit card pays more points when you shopping its supermarkets, so to get the best from these deals you need to spend regularly in one particular shop, but if you are not loyal to one store chain or you don't want your rewards in vouchers, you're better off with a cashback credit card.

Some pay you as much as 1.25% on every single thing that you buy. So if you spend 500 pounds in a month, you get 75 pounds tax-free at the end of the year.

So what's the catch? To
be eligible for many cashback and reward cards, you need to be earning over a certain amount each year, some also have an annual fee which could cancel out the value of the reward you're receiving.

Remember that cashback and reward cards are only worth considering if you pay off your credit card in full each month, otherwise the interest will simply outweigh the benefits.

We've analysed the details
of all available reward and cashback credit cards so you can see easily which are the most generous schemes.

To find the right card for you, visit whichcompare.co.uk/creditcards

Our two-minute video explains whether they're likely to be the right choice for you.

The Which? credit card comparison tables let you search all available cards from all providers large and small to choose the best deals based on quality of service as well as cost and benefits.

Which? Money Compare table: Cash back credit cards – check out some of the best cash back cards available at Which? Money Compare

Choosing the best cash back credit cards

Credit cards that offer cash back on purchases are the best option if you only use them to spend, rather than borrow. 

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. 

The rate of cash back offered on everyday purchases is a key consideration when choosing between these cards, but it's not the only one. 

You should also consider any caps or introductory offers that are in place, and how often the card pays out. Some cards may also require a minimum yearly spend before you can qualify for cash back.

It's also worth noting that some cards will only pay cash back in the form of vouchers, or on particular types of purchases (eg petrol, transport or items from certain stores). You should consider how much money you are likely to spend on these purchases before applying for these cards. 

Getting the most out of cash back credit cards

There are only two things to remember in order to get the most out of your cash back credit card:   

  • use it as much as possible
  • make sure you pay off the balance in full every month.

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

Don't spend more than you can afford to pay back at the end of the month though, as the interest is likely to outweigh any rewards.   

With this in mind, we recommend you set up a direct debit from another bank account to pay off your balance in full every month.

Which? Money Compare table: Reward credit cards – dozens of reward cards are compared at Which? Money Compare

Cash back credit cards – don't spend more than you can afford

If you're likely to spend more than you can afford to pay back at the end of each month, you're better off applying for a card that offers 0% interest on purchases. 

If you're already paying interest on credit card debt, it's worth considering a card that offers 0% on balance transfers.

Which? Money Compare table: 0% on balance transfers and purchases – check out some of the best deals on Which? Money Compare

  • Last updated: July 2016
  • Updated by: Rob Goodman

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.