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5 Mar 2022

Halifax launches a new cashback credit card - how does it compare?

Customers who spend £1,000 in the first three months can receive a £20 boost
A Halifax branch

Halifax has launched a new, fee-free cashback credit card that offers up to 0.5% cashback on purchases - plus a £20 bonus if you spend £1,000 in the first three months.

Used carefully, a cashback credit card can be a great way to earn money back on everyday spending, as well as one-off big purchases you might be planning to make.

This is the first cashback credit card to hit the market since July 2021, when Lloyds Bank launched its cashback credit card,according to financial information website Moneyfacts.

Here, Which? takes a closer look at what the Halifax cashback credit card offers and how it compares with other deals on the market.

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What does the Halifax cashback credit card offer?

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

It also comes with an introductory offer: new customers can get £20 cashback if they spend £1,000 within the first 90 days of opening the account. To qualify, you must make your minimum payment on time, and make sure you don't exceed your credit limit.

There's no cap on the amount of cashback you can earn, and it will build up from 1 January to 31 December.

You'll be able to see how much cashback you've earned each month on your monthly statements, but it's only paid once a year - you'll receive it as a lump sum in your account every January. This could be a good boost to start off the new year, but note that while the cashback you earn will may reduce your credit card balance, it will not count towards you minimum payment.

There are a few types of purchases you can't earn cashback on. These include balance or money transfers, cash withdrawals, gambling transactions, payment protection transactions and payments to current accounts, savings accounts and share-trading accounts.

You can apply for the cashback credit card now, but it's worth using Halifax's Simple Check service - an online eligibility checker - before you apply to gauge the credit limit you may be offered.

How does it compare?

The table below sets out how Halifax cashback credit card compares with others on the market right now. It is ordered by the representative APR (lowest to highest).

Credit cardCashback rateOther perksRepresentative APRAnnual fee
Halifax cashback credit card0.25% 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% (variable)None
Lloyds cashback credit card0.25% 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% (variable)None
Santander All In One credit card0.5% cashback on all purchases.Earn up to 15% cashback with retailer offers. 0% on balance transfers for 26 months from account opening with no balance transfer fee. 0% on purchases for 20 months from account opening. No foreign transaction fees on purchases made abroad in the local currency. Up to 56 days interest-free period on purchases.23.7% (variable)£36
American Express Platinum Everyday credit card5% cashback for the first three months capped at £100. After that, it's 0.5% cashback on spending up to £10,000, and 1% on spending above £10,000. Must spend a minimum of £3,000 a year to qualify for cashback.Early access to purchase event tickets sponsored by Amex. Complimentary supplementary cards for family members.24.7% (variable)None
American Express Platinum credit card5% cashback for the first three months capped at £125. After that, it's 0.75% cashback on spending up to £10,000, and 1.25% on spending above £10,000.Early access to purchase event tickets sponsored by Amex. Complimentary supplementary cards for family members.30% (variable)£25

The best cashback rate is offered by American Express - however, be aware that you only get the 5% cashback rate for the first three months before the rate reduces.

On the American Express Platinum Cashback Credit Card this drops to 0.75% after three months on spending up to £10,000, or 1.25% if you spend more than £10,000.

These rates are still higher than what's on offer from other cashback credit cards, but there is the £25 annual fee to factor in. You'll need to consider whether you'll make enough from cashback and the card's other perks to warrant the fee.

The American Express Platinum Everyday Cashback Credit Card offers the best fee-free cashback rate of 0.5%, increasing to 1% on purchases over £10,000. While the Santander All In One Credit Card also offers 0.5% cashback, there's a £36 annual fee.

The Halifax and Lloyd cashback offers are identical, and both require you to spend more than £4,000 to get the higher 0.5% rate - but there is no annual fee to pay.

Is Halifax a good provider?

Halifax is one of the largest banks in the UK, and its wide range of credit cards can suit many different needs, such as 0% balance transfer cards and travel credit cards for overseas spending.

Halifax is a Which? Recommended Provider for credit cards, receiving an impressive customer score of 76% - above our average score of 73%.

It came joint second out of 26 providers in our latest credit card customer satisfaction survey.

Halifax scored highly across the board, including its customer service, and the ability to manage accounts online and using its mobile app.

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 see which other 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 card

A cashback credit card can be a great way to get rewarded for your spending.

However, they rarely come with 0% introductory offers on purchases, which means you should always aim to pay your bill in full every month - interest can be high, and could wipe out any money you make in cashback.

Our cashback reward calculator can help you calculate how much you might earn. For instance, if you did get the Halifax cashback credit card and spent around £300 every month, the 0.25% cashback rate means you could expect to earn £9 in cashback for the year - not including the £20 introductory bonus for spending £1,000 in the first 90 days.