Compare Cashback Credit Cards

Get rewarded for your purchases with a cashback credit card. Cashback credit cards offer a way for your money to go further.

Compare cash back credit cards

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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.

No, cashback is not taxed, unlike your bank interest.

While many have either an annual or monthly fee, plenty of cashback cards come with no fee attached.

This will depend on the lender’s terms and conditions. Some cashback credit cards will have a cap on how much you can earn on your purchases. However, others have no caps and unlimited rewards. This is another thing to check while you are considering different cashback cards.

This will depend on what credit card you have. Some will add credit to your account and allow you to pay off purchases faster. Others will let you withdraw the cash, convert into shopping vouchers or earn air miles to save money on travel. It’s worth thinking about what you want the card for and then researching cashback cards that offer that particular reward.

These will vary by lender and will also be based on things like your credit history and credit limit. Cashback credit cards tend to have higher interest rates attached. Where a regular credit card may charge around 18% APR, a cashback credit card will charge something like 22% APR instead, so it can be a significant jump.

However, if you can get a cashback credit card with a 0% interest period, this is the smartest move. Just make sure you are paying your balance on time and in full where possible to avoid interest rates.

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