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Lloyds Bank launches new cashback credit card – is it any good?

It's the first cashback credit card to launch since 2018

Lloyds Bank launches new cashback credit card – is it any good?

Lloyds Bank has launched a new, fee-free cashback credit card that offers up to 0.5% cashback on purchases.

The deal is the first cashback credit card to hit the market since 2018 when the Barclaycard Platinum cashback credit card launched, according to financial information website Moneyfacts.

A cashback credit card can be a great way to earn money back on everyday spending. Here, Which? takes a closer look at what the Lloyds cashback credit card offers and how it compares with other deals on the market.


What does the Lloyds cashback credit card offer?

The Lloyds Bank Cashback Credit Card offers 0.25% cashback on every £1 you spend up to £4,000, and 0.5% for every £1 you spend over £4,000. 

It also comes with an introductory offer: new customers can get £20 cashback when they spend £1,000 within the first 90 days of opening the account. Offer conditions apply.

Lloyds says there is no cap on the amount of cashback you can earn and it will accumulate over the calendar year (running from 1 January to 31 December). The cashback you earn will be paid directly into the credit card account as an annual lump sum every January.

You’ll be able to see how much cashback you’ve earned on your monthly statements to keep track of how much you’re making. If your account is closed, the cashback earned before the closure will be credited to your account.

Credit is subject to status and terms apply. You can use Lloyds Bank’s One Check service – an online eligibility checker – before you apply, to understand the credit limit likely to be offered to you.

The card has no annual fee and comes with a representative 19.9% APR (variable).

How does the Lloyds cashback credit card compare?

The table below sets out how Lloyds’ cashback credit card compares with others on the market right now.

It is ordered by the representative APR (lowest to highest) and the links take you through to Which? Money Compare.

Credit card Cashback rate Other perks Representative APR Representative example
Lloyds Bank Cashback Credit Card 0.25% cashback on every £1 you spend up to £4,000, and 0.5% for every £1 you spend over £4,000. £20 cashback when you spend £1,000 within the first 90 days of opening the account. 19.9% Assumed borrowing of £1,200 for one year, at a purchase rate of 19.9% (variable), representative 19.9% APR (variable). Credit available subject to status. Terms apply.
American Express Platinum Cashback Everyday Credit Card* 5% cashback on purchases (up to £100) for the first three months of card membership. After that, it’s 0.5% cashback on spending up to £5,000 or 1% on all purchases if you spend above £5,000. Complimentary supplementary cards for family members. 22.2% Assumed borrowing of £1,200 for one year, at a purchase rate of 22.2% (variable), representative 22.2% APR (variable). Credit available subject to status. Terms apply.
Royal Bank of Scotland Reward Credit Card Earn 1% Rewards in all supermarkets (0.25% at their petrol stations). Earn between 1% and 15% in Rewards at MyRewards Retailers and 0.25% everywhere else you shop at home and abroad. Receive a £24 refund on the annual fee if you hold a Reward or Reward Black current account. 23.7% Assumed borrowing of £1,200 for one year, at a purchase rate of 18.9% (variable), with a £24 annual fee, representative 23.7% APR (variable). Credit available subject to status. Terms apply.
Santander All in One Credit Card  0.5% cashback on all purchases. 0% interest on balance transfers for 26 months from account opening with no balance transfer fee and 0% interest on purchases for 20 months from account opening. No foreign transaction fees on purchases made abroad. Up to 56 days of interest-free credit on purchases. Up to three additional cardholders. Earn up to 15% cashback with Retailer Offers, a free service available through Online and Mobile Banking. 23.7% Assumed borrowing of £1,200 for one year, at a purchase rate of 17.9% (variable), with a £36 annual fee, representative 23.7% APR (variable). Credit available subject to status. Terms apply.
American Express Platinum Cashback Credit Card* 5% cashback on purchases (up to £125) for the first three months of card membership. After that, it’s 1% cashback if you spend up to £10,000 or 1.25% cashback on all purchases if you spend over £10,000. Complimentary supplementary cards for family members. 27.3% Assumed borrowing of £1,200 for one year, at a purchase rate of 22.2% (variable), with a £25 annual fee, representative 27.3% APR (variable). Credit available subject to status. Terms apply.

*American Express cashback earn rates will change from 4 August 2021 (more details below). Source: Which? Money Compare.

As you can see, American Express – a Which? Recommended Provider for 2021 – currently offers the best rate of cashback at 5%, but it’s worth keeping in mind the rate only applies for three months.

After the introductory offer ends, the cashback rate on both Amex deals can still beat the Lloyds cashback offer. However, it’s worth noting that American Express is changing its cashback earn rates.

From 4 August 2021 the American Express Platinum Cashback Everyday Credit Card will pay 0.5% for the first £10,000 of purchases and 1% on purchases over £10,000. The American Express Platinum Cashback Credit Card will pay 0.75% for the first £10,000 of purchases and 1.25% on purchases over £10,000.

Is Lloyds a good provider?

Lloyds Bank, one of the largest banks in the UK, offers a broad range of deals to suit different needs, including 0% balance transfer and 0% purchase credit cards, as well as cards that offer a consistently low rate for everyday spending.

However, in our latest credit card satisfaction survey, Lloyds Bank credit card customers gave a below-average score of 70%, placing it towards the bottom of our table in joint 20th place along with Vanquis Bank.

Customers were generally pleased with customer service, the application process, and the ability to manage their accounts online, but they were less happy with fees for overseas usage and the transparency of charges.

If you’re looking to take out your first credit card, or want to switch, you can check out our best and worst credit card providers and find out which brands have been given Which? Recommended Provider status.

You can also have a look at our credit card company reviews for more detail on how customers rated brands for their services.

How to use a cashback credit card

Getting a cashback credit card isn’t about getting into debt. It’s about being savvy with your shopping and being rewarded for your spending without spending more than you normally would.

However, cashback credit cards rarely come with 0% introductory offers on purchases. So when using a cashback credit card, you should pay your bill in full each month to avoid paying interest and wiping out the gains you make from earning cashback.

Also, these deals tend to come with an annual fee, so you should make sure your everyday spending and any upcoming one-off purchases can make enough cashback to cover the fee and provide you with a reward.

The Which? Money Podcast

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Money Compare is a trading name of Which? Financial Services Limited.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Credit cards & loans, Money

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