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11 Feb 2021

Virgin Money launches cashback scheme for credit card customers: how does it compare?

Find out how much you could earn on your credit card spending

Virgin Money has launched a new credit card cashback scheme offering up to 15% cashback on everyday spending with selected retailers.

It's called 'Virgin Money Back' and is available to new and existing Virgin Money or Virgin Atlantic credit card users who opt-in via the mobile app.

Here, Which? explains how the new cashback scheme works and examines how it stacks up to other cashback offers.

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How does Virgin Money Back work?

To sign up to Virgin Money Back, you must have a Virgin Money or Virgin Atlantic credit card and you'll need to sign up via the Virgin Money credit card app.

The app will then show personalised cashback offers from a range of retail partners. These will change, but currently, they include brands such as Aveda, Caffu00e8 Nero Online, Sunglass Hut and Sweaty Betty.

The amount of cashback on offer varies between retailers, but the maximum you can earn is 15%.

Those with Virgin Atlantic credit cards can earn cashback in addition to Virgin Points, which you can build up to use for flights and holidays.

The offers are allocated automatically, so once you've opted into the scheme you don't have to worry about activating offers before you buy something.

The cashback is available 35 days after spending, and you can choose to either have it paid in to any current account or used against your credit card balance.

How does it compare to other credit card cashback?

Virgin Money Back works differently to other cashback credit card schemes, as they tend to offer a set rate of cashback which is applied to all spending done with the card.

The cashback you'd earn with Virgin Money Back is restricted to certain retailers - although, the amount of cashback you can earn may be quite a lot more than the flat rate offered by more traditional cashback credit cards.

American Express offers the highest cashback rate at the moment on its range of Platinum cashback cards.

The American Express Platinum Cashback Credit Card pays 5% cashback to new customers for the first three months, up to a maximum of £125. After that, you'll earn 1% cashback on spending up to £10,000 and 1.25% on spending over £10,001. The card has a £25 annual fee and a representative APR of 27.3% variable.

American Express is a Which? Recommended Provider and has the second-highest customer score in our most recent credit card survey.

Could you get more cashback with a debit card?

Some bank accounts offer cashback - but most come with a monthly fee, so you should make sure you get enough out of the perks to make up for the cost.

Despite several rate cuts and cashback shake-ups, the Santander 123 account still offers the highest amount of potential monthly cashback at £15. But you'll have to jump through a lot of hoops to get this.

You can earn 1%, 2% or 3% on a range of household bills and Santander financial products if they're paid by direct debit from your Santander account, with cashback capped at £5 for each tier. You'll also need to pay in at least £500 a month. The account currently costs £5 a month, but will be reduced to £4 on 12 April 2021.

There's also the Barclays Blue Rewards account, which allows you to earn £7 a month just for having two direct debits set up. However, the account costs £4 a month and you also need to pay in at least £800 a month.

However, it is possible to earn a lot more if you have additional Barclays products; you can get £5 per month if you have a Barclays mortgage, up to £5 if you have Barclays life insurance with critical illness cover, £3 for Barclays building and contents cover, and £1 if you take out a Barclays personal loan.

Other ways to earn cashback on everyday spending

If you're an organised online shopper, cashback sites offer a way to make money back on your spending without the need to pay for a current account or spend on a credit card.

Instead, you just need to sign up to a cashback site, such as TopCashback or Quidco.

Whenever you want to buy something, or even take out insurance or open a new bank account, simply search for the retailer or financial services firm you want to use and - most importantly - click on the affiliated link.

Then you can continue with the purchase/taking out the financial product as usual. The brand you've used will send commission back to your cashback site, which will then pass on a certain percentage back to you. You may have to reach a certain amount of cashback before you can withdraw the funds.

Should you get a Virgin Money or Virgin Atlantic credit card?

The Virgin Money Back cashback scheme is a perk of being a customer, but it shouldn't be the main reason you take out a Virgin Money or Virgin Atlantic card.

If you're on the hunt for a new credit card you should do your research and find the best deal and provider for you, weighing up the price of borrowing as well as perks such as cashback with customer service.

Virgin Atlantic came joint-seventh while Virgin Money came joint ninth out of 30 credit card providers in our latest annual survey. However, Virgin Money recently hit the headlines for withdrawing its online service for credit card users. Since 1 February, all two million existing customers need to manage their accounts via the mobile app.

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.