Compare Cashback Credit Cards

Last updated October 2020

What is a cashback credit card?

A cashback credit card is a type of rewards card that gives you back a percentage of what you spend. Cashback cards can be a great way to earn something back from your purchases.

The rate of cashback you will receive will vary depending on your card and where you spend your money.

How do cashback credit cards work?

Cashback credit cards work more or less in the same way as any other credit card. You will spend it the same way and repay it in the same way. Where they differ is that they offer a percentage of your purchase back in credit for using the card.

The amount that you get as cashback is typically deducted from your bill or added as credit to your account once a year. Some cashback credit cards will let you convert cashback into vouchers which enables you spend the money elsewhere. Others will let you move your cashback into your current account.

Different cashback credit cards will pay out at different times. There are annual cashback cards and monthly cashback cards as well.

Advantages of a cashback credit card

The main advantage of a cashback credit card is that it can make your money go further. Here are some other advantages of a cashback credit card.

• Reduce your bills - With cashback on your credit card, you will get the satisfaction of knowing you don’t have to pay the full amount for a purchase.
• Convert into shopping vouchers - For some accounts, you can convert your cashback into shopping vouchers which becomes a nice little bonus when you’re out shopping.
• 0% interest - Some cashback credit cards will offer 0% interest on purchases provided you pay the minimum each month. This will usually be an introductory offer for the first year or two.
• Bonus cashback - Some cashback credit cards will offer an introductory period which gives you the chance to earn bonus cashback. For example, you can get 5% cashback if you spend over £2,000 in the first three months. This makes them the ideal card to use if you are planning a large purchase anyway.

Disadvantages of a cashback credit card

Like with any new type of credit card, it’s important to be fully aware of the downsides as well as the benefits.

• Annual fees - There is often an annual fee to pay for a cashback credit card. This amount will eat into whatever savings you make. So to make the card worth it, you will need to use it regularly. Not all of them have fees though, so it’s worth researching for ones that don’t.
• High-interest rates - Cashback credit cards often have higher interest rates than regular credit cards. If the card also has an annual fee, a cashback credit card could save you less money than you might think. Whether it’s worth the costs will depend on your usage and how much cashback you can earn per year.
• Introductory offers - You may be able to get a credit card with an introductory offer, for example, no interest, but this will eventually run out. That’s when the high-interest rates kick in, and it’s easy to forget about this.

Cashback credit card FAQs

We have listed out some frequently asked cashback credit card questions.

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