New Santander Rewards Credit Card with 3% cashback – how much could you earn?

Santander has launched a new Rewards Credit Card offering 3% cashback on everyday travel, eating out and takeaways for the first 12 months.

Perks include no annual fee, uncapped cashback and fee-free spending abroad in the local currency. However, there are some restrictions on which purchases qualify for the higher cashback rate.

Here, Which? takes a closer look at the fees, features and how the new card stacks up against the best alternatives.

Please note that this article is for information purposes only and doesn't constitute advice. Please refer to the particular T&Cs of a credit card provider before committing to any financial products.

What does the Santander Rewards Credit Card offer?

A cashback credit card is a type of reward card that pays you back a percentage of what you spend. With Santander’s new card, you’ll get this paid onto your credit card at the end of every month.

The main features of Santander’s new card are:

• 3% cashback on everyday travel, eating out and takeaways for the first 12 months
• 0.25% cashback on all other spending indefinitely
• no annual fees
• no monthly cap on the cashback you can earn each month
• no foreign exchange fees for using the card abroad in the local currency.

The card has a representative APR of 24.9% (variable), which is lower than some of the market-leading cashback cards. However, cashback cards generally work best when you pay off the balance in full each month, as interest charges can quickly outweigh any rewards earned.

• Find out more: best credit card deals

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How much cashback could you earn?

The 3% cashback rate applies to selected categories of spending, including:

For example, spending £150 a month at eligible restaurants and takeaways would earn you £4.50 in cashback.

Someone spending £250 a month on qualifying purchases would earn £7.50 a month or £90 over a year.

Unlike some rival cards, Santander doesn't cap the amount of cashback you can earn each month. However, there are some exceptions to be aware of.

Cashback is based on how retailers are categorised by card networks using merchant category codes (MCCs). This means some purchases you might expect to qualify for 3% cashback may not do so.

For example, pubs, bars and hotel restaurants are often categorised differently from restaurants and cafés, so they won't usually qualify for the higher cashback rate.

Some supermarket petrol stations may also not qualify for 3% cashback, although Santander says most should.

MCCs can vary overseas, too, meaning some purchases made abroad could earn a different cashback rate than expected. If this happens, you should still receive the standard 0.25% cashback rate.

• Find out more: best cashback and reward credit cards

What's in the small print?

To apply for the card, you'll need to be at least 18 years old, live permanently in the UK and have an annual income of at least £10,500.

You must also not have been declared bankrupt or had a County Court Judgment (CCJ) or Individual Voluntary Arrangement (IVA) within the last six years.

A cash transaction fee of 3% (minimum £3) applies to cash withdrawals, including those made abroad. You'll also be charged interest at 29.9% per annum on cash withdrawals from the day the money is withdrawn.

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How does the Santander Rewards credit card compare?

Existing Santander customers already have a choice of cashback credit cards. 

The Santander Edge Credit Card pays 1% cashback and the All in One Credit Card pays 0.5%, but both charge annual fees (£48 and £36 respectively) and cap cashback at £10 a month. 

Looking beyond Santander, the American Express Cashback Credit Card offers 5% cashback for the first three months before dropping to 0.75-1.25%, but charges a £25 annual fee. 

The fee-free American Express Everyday Cashback Credit Card also offers 5% cashback initially before dropping to 0.5-1%. 

The Lloyds Ultra Credit Card offers 1% cashback for the first year and 0.25% thereafter. Like Santander's new card, it has no annual fee and offers fee-free spending abroad.

While Santander doesn't offer the highest cashback rates available, it's one of the few cards to combine no annual fee, uncapped cashback and fee-free spending abroad. Whether it's the better option will largely depend on how much of your spending falls into its bonus cashback categories.

3 tips when using cashback credit cards

1. Everyday spending Use it as a debit card and load all your everyday spending onto it to rack up the benefits.
2. Avoid borrowing Cashback credit cards are a rewarding tool if you use them only to spend money you actually have, as you would with a debit card.
3. Pay off the balance in full every month Otherwise, the interest could outweigh the rewards.