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Cashback credit cards: too complex to compare?

Cashback cards have doubled over past three years

Credit card

Recent competition between cashback credit cards is offering consumers a potentially better choice of deal, but are these cashback deals becoming too complicated to compare?

Cashback credit card deals on the market are at their highest for the past three years with almost double the number of available deals. 

But although this is good news for consumers, competition among credit card providers is adding too much complexity in terms of fees, rates and conditions, making it difficult for consumers to work out which cashback deal offers the best value. 

How you spend drastically affects your cashback

The table below compares several popular cashback credit card deals currently available and shows the maximum and minimum cashback they will pay out depending where you use them during the first year of taking out the card. 

Cashback credit card rates
  Min cashback on £10,000 annual spenda Max cashback on £10,000 annual spenda
American Express Platinum Cashback Cardb £194 £194
Capital One Aspire World MasterCard £145 £145
Barclaycard Cashback Visac £26d £247e
Smile Classic Visa £25 £24
Santander 123 MasterCardc -£24 £212

Table notes

  1. a. Cashback based on first year spending, assuming equal monthly spend. Cashback shown after deducting annual fee.
  2. b. Card has £25 annual fee
  3. c. Card has £24 annual fee
  4. d. Based on making fewer than 15 transactions a month
  5. e. Based on 10 monthly purchases of £1 each and the rest of the monthly spend spread across five further purchases.

Santander 123 MasterCard

As the table shows, how you choose to spend on the Santander 123 MasterCard could either earn you a decent amount of cashback or none at all leaving you with a £24 deficit from the annual fee. The card pays 1% cashback in supermarkets, 2% cashback in department stores and 3% at selected petrol stations (capped at £9 a month), but nothing elsewhere.

Barclaycard Cash Visa

Barclaycard’s Cash Visa has one of the most complicated cashback deals requiring a careful monthly spending regime to ensure you make the most of the deal. The card comes with an annual fee of £24 and pays out 2% on your top five purchases each month, trebled for the first three months, and 0.5% on other shopping. You have to make at least 15 transactions each month to trigger the the 2% cashback rate.

Capital One Aspire World MasterCard

The Capital One Aspire World MasterCard card comes with no fee, but pays tiered cashback rates of between 0.5% and 1.25% depending on how much you spend. It comes with an introductory 5% cashback rate for the first three months (capped at £100) with cashback paid as credit to the card each January. 

Although these cards offer some of the highest rates on the market, you will need to predict how much you’ll spend, and where, to work out the best deal.

Tips to make the most of your cashback credit card

  • Pay off your bill in full each month. The purchase APR on these cards are high and any interest accrued will cancel out the cashback you have earned.
  • Make the most of the introductory deal. Cashback cards from Amex, Capital One and Barclaycard offer between 5% and 6% cashback for the first three months (capped at between £100 and £125). If you have a big purchase in mind, put it on the card during the introductory period. 
  • Factor in the annual fee. If you’re not a big credit card spender then opt for a card that has no annual fee. Both Amex and Capital One offer good cashback cards with no annual fee. Bear in mind if you choose the Amex card that you need to spend at least £3,000 a year to earn cashback.
  • Keep an eye on our cashback credit card tables. We updated our tables daily and rank cards factoring in introductory rates and annual fees to help you make sure you are getting the best deal.

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